Regional Aid and Job Creation (Hansard, 14 November 1991)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Reay)
My Lords, we shall publish information on the employment created or safeguarded in projects supported by regional selective assistance in the next annual report on the Industrial Development Act 1982. The information will cover the period from 1st April 1982 to 31st March 1990.

§ Lord McCarthy
My Lords, I thank the noble Lord for that Answer. But will he assure the House that when the Government publish the information they will take into account the report of the National Audit Office which calculates that there have been serious gross mistakes in the way that the figures have been collected in the past? I refer to a 50 per cent. slippage, and to figures relating to 31 per cent. more jobs than planned and 69 per cent. less jobs than planned. It is therefore impossible at present to decide whether projects that have been initiated are good or bad for job creation purposes.

§ Lord Reay
My Lords, I can give the noble Lord the assurance that he seeks. The Government are studying the report of the Comptroller and Auditor General. We shall seek to ensure that everything necessary is done to ensure that all forms of public expenditure continue to give good value for money. Significant progress has already been made in ensuring that the database used for recording the number of jobs created and safeguarded is accurate.

§ Lord Taylor of Gryfe
My Lords, is the Minister aware that large sums allocated by the European Community for regional development in Scotland and elsewhere are being held up by the Treasury because of the additionality rule and are not being paid to the regions concerned? Will he comment on that factor; or will he expedite the procedures?

§ Lord Reay
My Lords, I am happy to look into what the noble Lord says. The Question relates to criticisms by the Auditor General. To my knowledge that was not one of the criticisms he made.

§ Lard Elliott of Morpeth
My Lords, does my noble friend agree that while data can be produced on regional development which will obviously show some factors being more effective than others, regional 648 development has contributed greatly to the essential regeneration of industry in the North-East of England?

§ Lord Reay
My Lords, I am grateful to my noble friend for that comment. We are committed to an effective regional policy with a substantial and continuing budget. There is provision for £567 million to be spent over 1991–92 to 1993–94 for England alone.

§ Lord Mason of Barnsley
My Lords, with regard to an effective regional policy, will the Minister explain to the House why Her Majesty's Government are refusing to receive £100 million from the European regional aid commissioner under the RECHAR programme destined for the coal and steel communities? What is the squabble about? Why do not the Government solve the matter and obtain the money that is urgently required in those communities?

§ Lord Reay
My Lords, if the noble Lord puts down a Question on that subject I shall be happy to answer it. But it is wide of the Question on the Order Paper.

§ Baroness Turner of Camden
My Lords, is it not true that regional aid has generally been beneficial? However, would it not also be a good idea to ensure that there is proper monitoring of the aid to make absolutely certain that real jobs are created and that a lasting improvement results?

§ Lord Reay
My Lords, we believe that there is adequate monitoring and that value for money is achieved by our policy of targeting assistance on selective schemes with the results that I have given.

Lord Bruce of Donington
My Lords, will the noble Lord explain Her Majesty's Government's position, which becomes all the more inexplicable in this regard since they already pay into the Community regional fund far more than they ever take out? Will he also explain why their regional policy within the Community has proved to be the failure that is revealed by the annual report of the Commission?

§ Lord Reay
My Lords, as an example, our regional assisted area map has to be drawn up with the agreement of the Commission. However, we pursue our own regional policy. The measures are designed to help redress regional imbalances and they are succeeding in so doing.

§ Lord McCarthy
My Lords, does the noble Lord agree that the purport of the statement by the National Audit Office is that there has not been, as there should be, adequate monitoring? It is no good the noble Lord stating that there has been adequate monitoring. The report states that that is not so.

§ Lord Reay
My Lords, one of the criticisms which the Comptroller and Auditor General made was that the inadequacy of the database made it difficult to establish reliable, acceptable figures. However, as I said, significant progress has already been made in improving the situation. The data on jobs achieved have already been completed and corrected up until April 1982, ambiguities in the definitions of jobs 649 created or safeguarded have been removed and various other improvements have been made to meet the criticisms of the Auditor General.

§ Lord Williams of Elvel
My Lords, I was interested in the noble Lord's response to his noble friend Lord Elliott of Morpeth. He stated that the Government conducted an active regional policy. Does he accept that under the administration of my noble friend Lord Callaghan of Cardiff, in constant prices regional aid stood at £1.8 billion a year? That was halved when the present Government took office to £989 million per year and slashed even further to reach an annual £242 million in the late 1980s. Is that an active regional policy?

§ Lord Reay
My Lords, I have stated that we are pursuing an effective regional policy aimed at redressing regional imbalances. There has been a change in our policy. For example, we abandoned the regional development grant scheme, which gave grants automatically, in preference for a policy which was more selective and is therefore proving more successful.

§ Lord Kennet
My Lords, when the noble Lord responded on the difficulty of achieving accurate results from the monitoring he said that it was difficult to establish accurate and acceptable figures. Will he tell the House where the greatest difficulty lies? Is it in obtaining accurate figures or acceptable figures?

§ Lord Reay
My Lords, I do not recollect using the word "acceptable". However, we shall have to verify that in Hansard.
The important point that I should like to emphasise is that the database to which the Auditor General refers on which the department records the jobs is not the database used for deciding whether individual claims for payment should be met. It is used for recording statistical information and for evaluation and forecasting purposes. Steps have been taken to improve it in that regard.