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Aid To Industry

Volume 990: debated on Monday 4 August 1980

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asked the Secretary of State for Industry if he will review the Government's policy on aid to industry in the various regions.


asked the Secretary of State for Industry what plans he has to review the assisted area status of different parts of the country in the light of worsening unemployment and industrial prospects since he last made announcements on this matter.

The Government thoroughly reviewed regional industrial policy, including assisted area gradings, before making last year's announcement of changes. We are continuing to watch closely the position in different parts of the country, but we must maintain reasonable relative stability in the grading of assisted areas if investment incentives are to remain effective.

Is the Secretary of State aware that his policies are consigning an increasing number of Leeds schoolchildren straight to the dole queue, where they will remain for the foreseeable future? Is that not a disgraceful policy? For God's sake, when will he alter it?

I do not accept the connection between changes in regional policy and unemployment among school leavers, in Leeds or elsewhere. If the original regional policy which I changed was so magic in its effect, why did unemployment among school leavers rocket every year under the Labour Government?

Is the Secretary of State aware that while the national unemployment figures have increased by 44 per cent. under the present Government, in West Yorkshire the increase is 59 per cent., and in Batley a massive 97 per cent.? Will the Secretary of State examine again the position of the textile and engineering towns in the West Riding and ensure that he restores the regional assistance which they so desperately need in their current economic plight?

The hon. Gentleman is exaggerating the effect of the regional assistance that was available. The Government remain willing to reconsider the relative position of any constituency if an application is made to them to do so.

Is my right hon. Friend aware that the greatest aid to industry in the regions is the conquest of inflation, because business will not invest to expand until the rate of inflation comes down? I welcome his measures to help the regions, but will he ensure that such measures are not taken at the expense of the need to control inflation?

My hon. Friend has identified the key problem. Until we reduce public spending as a proportion of national spending, interest rates and inflation will not be brought down and industry will not have the chance to recover.

Is the Secretary of State aware that the fact that when aid to North-East Lancashire industries has been withdrawn unemployment has rocketed—in some cases doubling in 15 months—is proof positive that he and his Government do not care tuppence how many thousands are thrown on the dole? If the Government care about unemployment in the regions, will the Secretary of State give a commitment to reinstate the regional assistance that North-East Lancashire has lost?

No, Sir. The Government have carefully retained special development area status for the worst hit parts of the country, precisely because we need to focus the incentive to invest.

When stimulating new industry and industrial growth, will my right hon. Friend examine certain industries which he sponsors and which are involved in the recycling of waste, such as paper, metals, glass and plastics? Does he agree that without subsidy but with direction and leadership from the Government, such industries might move more quickly?

I hope that my hon. Friend will either tell me, or write to me about, what he has in mind.

Does the Secretary of State agree that the problem is not so much one of aid to areas as the damage to areas that has been done by the Government? Will he take on board the fact that energy prices for the glass, foundry and paperboard industries are having a disastrous effect on those industries in the regions? Will he and the Secretary of State for Energy ensure that energy prices here are brought into line with European prices?

There is an argument about the charges being made. However, energy prices have rocketed, and our industries have to live with increased energy prices.

Does my right hon. Friend realise that aid to the regions must penalise other areas of the United Kingdom, including the West Midlands, which is the manufacturing centre of England?

Certainly the extra money that the Opposition are so free in spending comes out of the pockets or the handbags of their and our constituents.

Will the Secretary of State confirm that in every area that he has deprived of intermediate area status unemployment has skyrocketed in the 12 months since he made his announcement? Does he accept that such areas will be damaged further by the proposed enterprise zones? Does he agree that another review of regional policy is required?

The hon. Gentleman has answered his questions out of his own mouth, because unemployment has risen all over the country in the last year, whereas assisted area status was changed only in the last month.