West Midlands Economic Appraisal (Hansard, 20 June 1972)

§ Mr. Peter Walker

Yes. I wrote to the Chairman of the Economic Planning Council on 19th June, setting out the Government's response to the "Economic Appraisal".

The text of my letter was as follows:

Now that the White Paper "Regional and Industrial Development" (Cmnd. 4942) has 82W been published I am sure you would not expect us to comment at length on each of the Appraisal's recommendations. The initiative as regards many of these rests primarily with individual firms and authorities throughout the region. They and their employees have the local knowledge and technical skills needed to give effect to the Working Party's aims and recommendations, particularly those contained in the chapters on individual industries. The review of the length of apprenticeships is such a matter, as is the expansion of shift working or the awareness and introduction of new technological developments. Your Council will not doubt pursue these aspects accordingly both through the sub-committees which have been set up to review and maintain progress and in their discussions with individual local authorities. I do not think that we can improve on your existing channels of communication for these purposes.

I am therefore confining the remarks in this letter to the main themes of the Appraisal. In this context I hope we have already shown on various occasions, not least the Prime Minister's visit last September, our agreement with the view that there should be a positive policy of economic growth in the region based on the maintenance of its competitive ability, the development of its economic potential, and its capacity for innovation. We also agree that the region occupies a good position in the national industrial context and that its economic wellbeing is an essential factor in strengthening the national economy including that of less favoured regions.

The importance the Government attaches to the achievement of a sustained and high rate of national economic growth was stressed in the White Paper. The measures adopted will be well known to the Council but perhaps I might mention particularly the provision of free depreciation countrywide for all investment in plant and machinery and the initial allowance of 40 per cent. now available in respect of all industrial buildings and structures. This will materially assist both the manufacturing and service industries in the West Midlands.

With the comparative proximity of our entry into the European Economic Community we regard it as important that West Midlands industry should now be taking robust and positive steps to penetrate this vast market. We have no doubt that the Council will concern itself closely with this challenging new dimension. With the experience of management in the West Midlands and the exceptional skills of its labour force there can be little doubt of the future improvement in the economic position of the region and its capability to remain competitive in this new sphere. The region is also ideally placed to make the best use of the developments I recently announced in both motorway and trunk roads.

You have already welcomed the relaxations in industrial development certificate control announced in the White Paper. The increase in the exemption limit to 15,000 sq. ft. in itself will be of great benefit to industry in the West Midlands without prejudicing the interests of the assisted areas which must remain our first priority. Additionally the raising of the limit 83W to a higher level than will obtain in the South-East, recognises the difference between conditions in the West Midlands and conditions in the South-East. The statement in the White Paper that industrial development certificates will be more readily granted than hitherto for schemes of factory modernisation which may involve some increase in the number of employees, complements the other measures announced in the Budget speech to encourage modernisation and re-equipment. The Council will no doubt be contemplating how industry can now be encouraged to take advantage of the situation.

The Government have already acted to meet the Working Party's recommendations that more information should be given about the operation of industrial development certificate control by publishing a detailed explanatory note in Trade and Industry for 8th July, 1971. In addition Ministers of the Department of Trade and Industry frequently explain the working of the control. For example the Secretary of State in his speech at the Birmingham Chamber of Commerce dinner in January made the workings of the control one of his main themes and he explained what was meant by operating the policy flexibly and how in general no modernisation scheme would be refused which did "not involve a definable new project or a new dimension of an existing one". Regional Office officials are always ready to explain and discuss at length the way the control is operated not only to individual industrialists but also at meetings, for example of businessmen, local authority members and officials and educational bodies, and they often have the opportunity to do so. The Government would, however, welcome more detailed suggestions about how such local links might be developed in ways which would bring practical benefits to industry.

The Working Party made a recommendation that office development should be encouraged in overspill areas. Whilst some limited office employment might be expected as part of the growth of services in line with population increase in the overspill areas, we think it is more likely that any substantial office development will arise in the more established areas. Studies are in progress for the movement of Government offices to areas outside London and the South East. The West Midlands has some distinct attractions as a receiving area in this context. We think that your Council might well pursue this point further perhaps by making a detailed study.

The co-ordination of water and sewerage services referred to by the Working Party will be achieved when the Government's proposals for all-purpose Regional Water Authorities described in Circular 92/71 take effect in April, 1974. I am glad to note from your subsequent letter of 18th May that your Council are in broad agreement with our proposal for a Midlands Water Authority covering the areas of the Trent and Severn River Authorities and part of the area of the Lincolnshire River Authority. I am considering the detailed points you made about the constitution of this Authority and I shall be writing to you separately about that. The basis for a regional strategy for water resources is contained in the report 84W of the Water Resources Board on "Water Resources in Wales and the Midlands" published in October 1971. The Authorities involved are urgently considering the best ways of implementing the report's recommendations and action has already been initiated in a number of quarters. The results of the Trent Research Programme, expected later this year, should provide valuable information on which to base decisions for the future systematic development of the water resources of the Trent area. The Government have substantially increased the amount of expenditure which they are prepared to authorise on sewerage and sewage treatment. There is a sizeable programme already in hand—for example the Upper Tame Main Drainage Authority expect to spend £22 million in the five years 1971–72 to 1975–76—and no properly conceived and costed scheme is likely to be refused loan sanction. These measures illustrate the importance which the Government attach to these problems.

You are already aware that the Government is looking forward to the evolution of an acceptable strategy for development within the region. We understand that steps have already been taken to arrange discussions, initially at official level between Government Departmnts and technical officers of the planning authorities, and subsequently between the Economic Planning Council and the Planning Authorities Conference on the next steps following the West Midlands Regional Strategy Report sponsored by the Conference.

The Government have also invited all the local authorities in the region to prepare structure plans. This work which is, in the first instance, being undertaken by existing authorities should provide a sound basis for planning after Local Government reform when the new more powerful authorities will be more effective instruments for the planning of the region.

The Working Party recognised that it would be premature to consider whether any formal constitutional machinery should be introduced at regional level in advance of the report of the Commission on the Constitution. However, the Government are already considering how the administrative processes can best be decentralised by arranging for work at present undertaken centrally to be transferred to the regions whenever this is feasible and economic. The first move covering land use planning and development control case work will take place this summer. The Government are also urgently examining all forms of central government control over local government responsibilities with a view to reducing these wherever possible.

Overall we believe there are few of the Government measures so far announced which will not be of benefit to the West Midlands. We are equally sure from the resilience and capacity for innovation which it has shown in its past that your region will be the first to avail itself of these measures and change the present rather negative situation to a more positive one. The Government believe that the budget measures taken as a whole will provide a major stimulus to industry and the economy. We believe that there are now 85W major opportunities awaiting those willing and able to plan forward in a realistic and determined way. The Economic Appraisal represents a vigorous forward look of this kind. We are sure that your Council will now study and recommend means of transforming this economic analysis into practical achievement.

Peter Walker.

E. Quinton-Hazell, Esq., M.B.E., Chairman.

West Midlands Economic Planning Council,

Five Ways House,

Islington Row,

Birmingham, B15 1SR.