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Regional Policies

Volume 933: debated on Monday 13 June 1977

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8.

asked the Secretary of State for Industry if he is satisfied with the workings and effectiveness of the Government's regional policies, particularly as they affect the South-West assisted areas.

A recession tends to reduce the effectiveness of regional policies, but this should improve with an improvement in the economy.

But is not the Minister aware that over the past 12 months the South-West Development Area—Cornwall in particular—has had the highest level of unemployment of any United Kingdom development area? Is it not time that a more flexible approach was introduced to take account of the needs of companies in rural development areas?

The Government are concerned about unemployment wherever it occurs. We have faced extreme economic difficulties, but the Government have taken positive steps to try to redress the position in the South-West. For example, we have built 25 advance factories and another four nursery units for small companies are due to be completed in the near future. We have given regional selective financial assistance of nearly £7·5 million to create about 7,000 jobs. I am sure that the hon. Member and his hon. Friend the Member for Folkestone and Hythe (Mr. Costain) will bear in mind the restrictions on public expenditure. It is strange that Conservative hon. Members advocate cuts in public expenditure but when they speak on behalf of their own constituencies they always seem to want more.

Is my hon. Friend aware that there is a great deal of dissatisfaction, particularly at present, about the operation of the regional policies on Merseyside? For example, there is dissatisfaction that an additional 1,400 workers are likely to be out of work as a result of the redundancies at Plessey's. Can my hon. Friend say why Lord Ryder's report on this matter was not properly discussed and action was not taken before the redundancies were announced by the Government? What action will the Government now take to stop those redundancies and create more work on Merseyside?

Order. I must draw attention to the fact that this Question is about the South-West.

The Ryder Report is due to be published in the near future. The Government are concerned about the effects of regional expenditure and levels of unemployment, particularly in Merseyside and elsewhere, but I am sure my hon. Friend will accept that regional expenditure can remedy only one of the structural defects of industry. The largely private enterprise economy that we have in this country is going through a crisis. Although regional expenditure can help to obviate some of the difficulties, it cannot alter the basic system and the difficulties associated with it.

Will the Minister turn his mind to the European element of the Government's regional policies? Is it not the case that the Commission's proposals greatly to increase the Regional Fund are likely to be stillborn because of the British Government's comparative lack of interest in such proposals? Is the Government's main difficulty their reluctance to relinquish their political control over any element of regional policy?

As with other Common Market matters, we are engaging in discussions about the general regional position in this country with regard to the Common Market, so the hon. Gentleman is wide of the mark. The Government are concerned and are engaged in discussions on the matter.

Is it not the case that the Government's present regional policies are based on the 1972 Industry Act passed by the previous Government? Is it not clear from the representations made to my hon. Friend's Department from the North-East of Scotland that that Act is far too inflexible and does not allow the Government to deal with circumstances as they arise instead of having to deal with them in a purely automatic and mechanistic way?

My hon. Friend has made an interesting point. The 1972 Industry Act, passed by the previous Conservative Government, is the basis for current regional policies. We have tried to adopt a more selective approach to produce the sort of flexibility for which my hon. Friend asks. But the notion that the central Government have enormous powers of intervention in industry is not correct. Our powers of intervention are quite limited.

To what level must unemployment rise in any of the regions before the Minister revises the policy on the regions or resigns and returns to his erstwhile friends below the Gangway?

Regional policy is designed to deal with basic structural unemployment, as the hon. Gentleman well knows. What alarms me is the double standards displayed by the hon. Gentleman and other Conservative Members, who constantly talk about cuts in public expenditure which would greatly increase the level of unemployment and yet, when they speak for their own constituencies, always seem to want more and more public expenditure.