Northern Development Company: Grant (Hansard, 7 June 1994)

§ Lord Strathclyde
My Lords, since 1990-91 the Northern Development Company's grant for inward investment activities has been increased by 24 per cent. In the current year its grant has been reduced by 2.1 per cent. That may have come as a disappointment, but it will still allow the Northern Development Company to carry out a full programme of inward investment activities.

§ Lord Dormand of Easington
My Lords, the Minister's reply was not only a disappointment to the NDC but a disappointment to me. Is he aware that the northern region has the highest rate of unemployment in the United Kingdom outside Northern Ireland and recovery in the region is very slow indeed? The NDC normally secures some 5,000 jobs annually. This year it says that it will be lucky to get 4,000 jobs. May I remind the Minister, who is dealing with the Coal Industry Bill, that every pit in the northern region is now closed? There are five northern counties without a pit. Will the Minister accept that the NDC is made up of the northern CBI, the northern TUC and the northern local authorities? Does he agree that it is therefore a self-help organisation and deserves every encouragement? Is he aware that a reduction in grant, as he has just informed us, could not have come at a worse time?

§ Lord Strathclyde
My Lords, I certainly join the noble Lord in saluting the work of the NDC. It does an extremely good job and has brought many valuable jobs to the North East, not least companies such as Nissan, Fujitsu and many other Japanese companies. I find it extraordinary that someone from the party that supports 1081 the Social Charter, which will damage job prospects in the United Kingdom, should complain about a cut of 2 per cent.

§ Lord Taylor of Gryfe
My Lords, does the Minister agree that the reduction in grant to the NDC is a reflection of the total lack of regional policy on the part of the Government and that there are other areas similar to the area mentioned by my noble friend? Will he accept that it would be wise to look at spending more money on the development of regional policy in north-eastern Scotland, for example, instead of pouring vast sums into improving the infrastructure in a congested city such as London? Is he aware that more and more employment is drifting down to the South East?

§ Lord Strathclyde
My Lords, I am very surprised by what the noble Lord said. The Government carry out an extremely effective regional policy. Most recently we set up government regional offices, bringing together all the departments responsible for funding in the regions into a single unified body, so that they can deal effectively with the public sector and private sector partnerships mentioned by the noble Lord, Lord Dormand.

§ Lord Dean of Beswick
My Lords, can the Minister say whether the reduction of grant to the Northern Development Company has been matched by reductions to other development companies in other parts of the region? Does the same apply to development corporations, which are government appointed bodies? The Minister gave figures for the North East, but is he aware that 90 per cent. of government aid has been spent in Greater London and not in other regions of this country where, in some cases, it is needed more?

§ Lord Strathclyde
My Lords, I am glad that the noble Lord recognises that there has been substantial funding in London. As for the overall budget for regional development organisations, some £5.6 million grant-in-aid is available for funding all the RDOs' inward investment activities for this year. In total that was an increase of £50,000 on last year.

§ Lord Peston
My Lords, I really do not understand the noble Lord's idée fixe with the social chapter, especially as he has not even been provoked by my noble friend Lord Bruce of Donington. Perhaps he will at some point tell me what is really troubling him on that. Am I right that the figures he quoted are in current prices and that the increase in real terms is a good deal less? Indeed, the cut is a much larger real terms cut. Am I right that these are current price figures?

§ Lord Strathclyde
My Lords, the social chapter does not trouble me; it troubles British industry, as the OECD report which was published today notes. I hope that the noble Lord's party will therefore change its policies. The figures I mentioned were indeed in cash terms and therefore they will be affected slightly by inflation. However, I am glad to say that since the 1082 Government's record on inflation is far superior to anything produced by Labour governments, that too will show an improvement.

§ Lord Peston
My Lords, as the noble Lord raised the other matter, is he aware that the OECD report was written "by a group of distinguished economists"? Does he not think, therefore, that it would be sensible to take it with a pinch of salt?

§ Lord Strathclyde
My Lords, that indicates precisely why the noble Lord and his party do not want to have a discussion about the social chapter.

Lord Bruce of Donington
My Lords, has the noble Lord yet read the OECD report; and if he has, will he explain why copies are not available in the Printed Paper Office?

§ Lord Strathclyde
No, my Lords, I have not read it, and I can understand why the noble Lord himself may not wish to read it.

§ Lord Dormand of Easington
My Lords, will the Minister clarify the answer that he gave to me? Is he saying that because the Northern Development Company receives a certain percentage of grant it was, in fact, too much and therefore warrants a decrease of 2.1 per cent., however small that might be? If that is the case, how does he reconcile that with the fact that the northern region still has, and has had since statistics were first available, the highest rate of unemployment in the country?

§ Lord Strathclyde
My Lords, perhaps I may put this into perspective. There has been a 2.1 per cent. cut in funding for the current year but the NDC will not be making any cutbacks in its programme of inward investment and will be sticking to its original programme. The cutbacks will come from staff and bureaucracy.