HL Deb 03 July 2000 vol 614 cc1282-4

3 p.m.

Lord Dormand of Easington asked Her Majesty's Government:

To what extent they feel that present regional policies are benefiting the northern region.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, the Government are committed to promoting the interests of all the regions, including the North. Establishment of the regional development agencies is already helping to deliver that commitment. In its first year, ONE NorthEast announced projects which will create and safeguard 11,000 jobs with a capital expenditure of some £340 million. Over the next three years, it will invest more than £100 million, levering in an additional £400 million of private, public and European funds.

Lord Dormand of Easington

My Lords, is my noble friend aware that, despite everything that has been done by the Government for the northern region, there is little sign of improvement in the area itself? I have to say to my noble friend that in this Labour heartland there is still considerable concern about the position. For example, is he aware that unemployment in the region remains as high as ever? Can he confirm reports that this month's spending review is to include millions of pounds for other regions? Will the North receive special consideration in view of the fact that all the indicators show that it is the worst hit of all the regions in the country?

Lord Whitty

My Lords, I am aware that in certain respects the northern region has not fully shared the prosperity of the rest of the country in terms of both employment and standard of living. That is one of the reasons that we are engaged in an active regional policy in support of the RDAs, the local authorities and local business in the northern region. My noble friend would not expect me to anticipate the spending review. It is a matter for the Chancellor, who I am sure is aware of the problems of the North East.

Lord Shore of Stepney

My Lords, is it not self-evident that the beneficial effects of regional policy in the North are being largely wiped out by the adverse effects of the exchange rate? Is it not also self-evident that a major adjustment is needed? The present misalignment may be temporary, but surely the Government recognise that the misalignment is gross and that it is having damaging effects on employment, particularly in manufacturing industry in the North. One has only to consider the latest report about Nissan and its future intentions. Does my noble friend agree that it is really time that the Chancellor addressed himself to this issue and took those actions which are available to him to nudge downwards the exchange rate of the pound?

Lord Whitty

My Lords, for one surreal moment I thought that my noble friend was advocating our joining the euro! It is true—there has been news this morning—that the high dependence of the northern region on manufacturing compared with certain other regions means that the exchange rate has a particularly acute effect. However, we believe that the measures we are taking, both nationally and in relation to the northern region, will attract and retain inward investment and ensure that we make best use of the skills, facilities and the attitude to work which are clearly there in the northern region and which should allow it to have a competitive advantage whatever the exchange rate. The rest of my noble friend's question is a matter for the Chancellor. I do not think that I can easily add to what he has already said on that subject.

Lord Brabazon of Tara

My Lords, following on from the question asked by the noble Lord, Lord Shore, is not industry in the North East asking about the Government's present policy on the euro? It is seeking clarification on the issue. Can the noble Lord say to which Ministers industrialists in the North, and indeed elsewhere, should listen regarding policy on the euro?

Lord Whitty

My Lords, I am sorry to have to repeat yet again from the Dispatch Box, as have many of my colleagues, that our policy on the euro remains as it was announced by the Chancellor in the autumn of 1997—we recognise that when the criteria are met there is a case in principle for joining the euro. Decisions on that will await a recommendation from the Chancellor at a later stage. I do not think that the problems of the North East, raised by my noble friend Lord Dormand are resolved by the Opposition, or anyone else, looking at the minutiae of euro policy. This is a structural policy—

Noble Lords


Lord Whitty

My Lords, the noble Lord, Lord Brabazon, claimed that there were textual differences between one Minister and another. The point I am making is that the policy is clear, always has been clear and remains clear. The issue addressed by my noble friend Lord Dormand was the need for structural measures to improve the relative competitiveness of the North East within this economy.