Regional Policy (Hansard, 4 July 1990)

§ Viscount Ullswater
My Lords, there are no plans at present to make changes to regional policy. The Government remain committed to an effective regional policy and will continue to make the necessary resources available.

§ Lord Dormand of Easington
My Lords, that is a disappointing Answer. Is the Minister aware that when there is a rise in unemployment, as is happening now, the regions are hit first and they are hit the hardest? Is the Minister further aware that the unemployment figures for the regions can and do hide pockets of high unemployment? In my own area, for example, yet another pit closure was announced last week with the loss of another 1,000 jobs. As the change in regional development grants has resulted in a huge loss to the regions, will the Government now consider an increase in regional assistance grants and at the same time make the administration of those grants much more flexible?

§ Viscount Ullswater
My Lords, the noble Lord talked about unemployment. However, our regional measures have had a significant impact on unemployment in the assisted areas. Unemployment has fallen faster in the regions during the three years to May 1990. It fell by 7 percentage points in Wales, 6.4 in the North and 6.3 in the North West, compared with 5.3 for Great Britain as a whole and 4.1 in the South East. The noble Lord also asked about regional policy and regional grants. The public expenditure survey for 1991–93 constitutes some £630 million. By any stretch of the imagination that is a large sum of money.

§ Lord Mason of Barnsley
My Lords, how much money will be available within RESIDER in terms of European regional development funds? RESIDER is the new form of European economic aid to the regions. Will that money from RESIDER be in addition to the present level of Government aid to the regions?

§ Viscount Ullswater
My Lords, I cannot help the noble Lord regarding the RESIDER programme, but I can tell him that funds from the European Regional Development Fund in respect of the integrated development operation programmes have been agreed under the Community support framework. The sums involved are £50 million for Cleveland-Durham area and £58 million for Tyne-and-Wear-South East Northumberland area.

§ Lord Williams of Elvel
My Lords, perhaps I may help the noble Viscount in respect of the RESIDER question. Is it not the case that the Treasury does not apply the doctrine of additionality; that is to say, it deducts from Treasury money whatever is received from Europe? Is that not a scandal? Furthermore, may I press the noble Viscount to be more forthcoming about the regional selective assistance programme in the light of 1992? He quoted unemployment figures when they were falling generally but they are now rising generally. Is not my noble friend Lord Dormand right in saying that the regions will suffer most as unemployment increases?

§ Viscount Ullswater
My Lords, the noble Lord asked me about additionality. European Community receipts are taken into account in determining public expenditure levels. That enables programmes to be maintained at a higher level than would otherwise be possible. On the point about whether unemployment will rise faster in the regions than in the South East, my information is that because jobs in the South East are mainly in the service industries unemployment may rise faster in the South East than in the regions.

§ Lord Gisborough
My Lords, with particular reference to the area which the noble Lord, Lord Dormand, and I both come from, can my noble friend give some idea of the progress of urban schemes and to what extent they differ from the position which existed before the Government came intooffice?

§ Viscount Ullswater
My Lords, more than 1,000 projects in nine inner area districts in the North East—in Tyne-and-Wear and Cleveland—are being supported through the Department of the Environment's urban programme. The region's urban programme allocation for 1991 is £42 million, an increase of 4 per cent. on 1989–90.

§ Lord Taylor of Gryfe
My Lords, has the Minister seen the Fraser of Allander analysis of the consequences of regional policy in which it is stated that the new policy is wrong in principle and damaging in practice? Can the Government's commitment to regional policy be reconciled with the fact that the London Docklands Development Corporation's state funding for this year is substantially more than the entire regional development assistance to the Scottish Development Agency?

§ Viscount Ullswater
My Lords, we remain committed to an effective regional policy. The Scottish Development Agency combines all the effective departmental resources and supervises regional policy in that way. I return to my original contention that the figure of £630 million for the regions is a considerable sum of money.

§ The Earl of Onslow
My Lords, will my noble friend bear in mind that large sums of English taxpayers' money have been spent on regional aid for projects such as Ravenscraig and the Linwood truck plant at various times in the past, all of which have ended in failure and gone against the market and all of which have been wasted? Does he agree that an awful lot of the regional aid goes to Japanese machine tool manufacturers, has no effect whatsoever on jobs and is a distortion of subsidy?

§ Viscount Ullswater
My Lords, I cannot agree with my noble friend. Regional policies have done a great deal to support jobs, especially in the North East and the North. For historical reasons those areas have suffered a rundown of their traditional industries and it is very important that they should be provided with others.

§ Lord Tordoff
My Lords, will the Minister explain to his noble friend that Scotland is not a region?

§ Viscount Ullswater
My Lords, I dare say he has heard the noble Lord's words.

§ Lord Cledwyn of Penrhos
My Lords, may I turn the noble Viscount's attention to Wales for a moment? Is he aware that during the last 10 years industrial employment has fallen by 20 per cent. in Wales but the regional aid programme has been cut by 50 per cent. in the same period? How does he reconcile those two figures?

§ Viscount Ullswater
My Lords, regional policy for Wales comes under the Welsh Development Agency. One of its projects is the Welsh valleys initiative on which there is a Question to morrow. I shall be very happy to go into the matter in more detail to morrow.

§ Lord Blease
My Lords, is there not an urgent need to co-ordinate national policies for energy and transportation to link the whole of the United Kingdom under one regional development policy? In my view, the regions have been sacrificed because of the lack of a national policy for transport and energy.

§ Viscount Ullswater
My Lords, the European Regional Development Fund is devoted to infrastructure. It will provide finance for the transport network that the noble Lord requires.

§ Lord Dormand of Easington
My Lords, is the noble Viscount aware that the CBI, the Forum of Private Business and the London Business School, among many other objective observers, are saying that there will be a substantial increase in unemployment, which is the basis of my Question? As he referred to the regions, will the Minister comment on the fact that the Northern region, to which he referred, after 11 years has an unemployment rate of 13.4 per cent., which is only six points from what it was in 1979?

§ Viscount Ullswater
My Lords, my figure for unemployment for the North is 9.6 per cent. and for the North West 8.4 per cent. The figures have almost halved since May 1987.