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Assisted Areas (Regional Aid)

Volume 12: debated on Monday 9 November 1981

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asked the Secretary of State for Industry whether he will include within his general review of regional aids those assisted areas due to lose such status in August 1982.

The Government stand by their assurance that they will review those areas that are due to lose assisted area status on 1 August 1982 after having been downgraded by more than one step. In addition, we have always made it clear that we are ready to consider new evidence of significant long-term change in an individual area's circumstances relative to the general position. Beyond this, the Government's policy continues to be to concentrate regional aid on the areas of greatest need.

Is the Minister aware that that is a most unsatisfactory reply, as the Government continue to refuse to undertake a general review of assisted areas that are losing their status in August this year? Will he admit what is as plain as a pikestaff—that unemployment throughout the country is now far worse than any Minister envisaged when the policy of withdrawing assisted area status was adopted more than two and a half years ago? Does he accept that it would be an outrage if towns such as Blackburn, Accrington and Nelson and Colne, where unemployment has increased between two and a half and three times, lost their assisted area status while Conservative seaside resorts such as Blackpool retained it?

I am not clear why the hon. Gentleman finds my answer so unsatisfactory, as I made it absolutely clear—as did my hon. Friend the Under-Secretary of State when he saw the hon. Gentleman not long ago at a meeting to discuss the subject—that we shall of course consider new evidence of long-term change in the circumstances of an individual area. That has always been the position. I acknowledge that unemployment has risen sharply in the hon. Gentleman's constituency and there are clearly considerable problems.

With regard to the rise in unemployment generally, that is a problem for the whole country. It does not follow, however, that the solution is to increase the number of assisted areas. It is far from clear that that would assist the overall unemployment problem or create any net new jobs. Indeed, the evidence is that more jobs were created in the assisted areas when regional policy was tighter and more sharply and narrowly aimed than it was when we came to office.

In considering new evidence, will my hon. Friend examine the report of the Public Accounts Committee on this subject, in which the evidence from independent research sources, backed up by his own Department, reaffirms that the beneficial effect of regional aid is at best minimal and that the money could be better spent identifying particular areas of need in industry?

I note my hon. Friend's remarks. I shall, of course, look at the evidence to which he refers. It is also important to bear in mind the effect of these incentives on inward investment.

Will the Minister bear in mind that in the past year unemployment in Halifax has risen by 136 per cent.—one of the steepest rates of decline in the country—yet Halifax is to lose assisted area status next year? What help can the Minister offer to all the firms that are throwing people out of work as a result of Government policies? Is he aware that these include manufacturing firms across the whole range of industry, not just textiles, many with national and international reputations for high quality and high exports?

Clearly, I shall consider the hon. Lady's constituency and the points that she has made today. Like other hon. Members, however, she must also consider to what extent the rise in unemployment is a national phenomenon and to what extent it is peculiar to the area. I shall certainly consider what the hon. Lady has said, although her constituency, like others, will clearly benefit from a general upturn in the economy.