HC Deb 29 April 1974 vol 872 cc347-8W
Mr. Alec Jones

asked the Secretary of State for Industry if he will make a statement on regional incentives.

Mr. Heffer

One of the Government's first priorities is to achieve a high rate of new investment, particularly in manufacturing industry. No one can say that over the whole post-war period our performance has been satisfactory in this respect. Equally, we must make a sustained effort to eliminate the disparities in employment and development which have built up over the years between Scotland, Wales and the assisted areas of England and other parts of the country. Our broad intention is to continue and develop the financial and other incentives now available for the location of new industry and the expansion of existing industry in the assisted areas.

Against this background, we have been considering the system of incentives we have inherited from our predecessors in the Industry Act 1972. This Act gives us wide powers, which we intend to use to the full in promoting investment, the modernisation of industry and regional regeneration. But, as stated in our manifesto, we intend also to bring forward a new Industry Bill to give us the wider powers, for example through planning agreements, that we shall require in order to achieve our purposes. We shall, of course, discuss the proposals fully with those concerned. In the meantime, however, I think it is desirable to make plain our intentions in respect of existing incentives to invest so that industry will have the confidence to go forward with existing and new projects.

Thus, industry can be assured that the existing system of regional development grants will be maintained, although within this framework adjustments may, of course, have to be made from time to time. We certainly do not intend to cause the same hiatus in investment as was created by the previous Government from 1970–72, when they abolished the system of investment grants.

As my right hon. Friend the Chancellor of the Exchequer has announced, we shall maintain the existing arrangements for regional employment premium while considering further possibilities for the future. We shall, therefore, continue the existing rates of payment of regional employment premium beyond September 1974.

As for selective assistance in the assisted areas, we intend to build on the system set out in the Industry Act 1972 so that companies in these areas can continue to receive assistance. In appropriate cases we shall be ready to provide assistance in the form of share capital.

We shall continue with the system of regional devolution, so that the bulk of cases will be decided in the areas where the projects are to be located.