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Regional Policy

Volume 84: debated on Wednesday 23 October 1985

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asked the Secretary of State for Trade and Industry if he will make a statement on the results to date of his regional policy.

It is too early to measure the effectiveness of the revised regional policy. The transitional period is not over and we expect to continue making payments under the old schemes for some time. We shall make an assessment as soon as possible after the new incentive package has had time to work through into additional job opportunities.

Further to that very disappointing reply, is the Secretary of State aware of the vast and ever widening gulf between some regions of this country and others in terms of economic activity and recovery, in relation to which his present budget for regional policy is quite inadequate? Will he, therefore, announce that he is now aiming at greater financial support for his regional policy?

I do not need to be told by the hon. Gentleman about the gulf between different parts of the country. It is a subject on which I touched very extensively in my speech to the Conservative party conference only a couple of weeks ago. However, the hon. Gentleman is making a great error if he thinks that the efficacy of regional policy can be judged simply by the amount of money spent on it. To provide huge sums of money for capital investment which would have taken place in any event, or which would lead to no substantial number of new jobs, is simply a waste of money and has nothing to do with regional policy.

Does my right hon. and learned Friend recognise that regional policy is not simply a matter for his Department, but affects decisions of all Departments of State, as the Secretary of State for Defence has now acknowledged? Is it part of his responsibility within the Government to ensure that regional policy is considered in all aspects of other Department's decisions?

I am not sure whether it is my responsibility, but I certainly indicated in that same speech that I thought it ought to happen.

In the light of that Blackpool speech, when the Secretary of State indicated strong support for regional policies, and in the light of what he has already said, is he hinting that there will be a reduction in public expenditure in inducements for investment?

I was not hinting at anything. I said what I had to say. The evidence of the new policy and what it is doing is apparent in some respects, because since parts of the west midlands became intermediate areas last November, 538 firm applications for regional selective assistance have been received, 156 offers of grant have been made so far, which represent over £17 million of grant and over £150 million of total investment, and nearly 12,000 jobs are to be created or safeguarded. That is our new regional policy.

Is my right hon. and learned Friend aware that, irrespective of the answer that he has just given, the designation of the Ross and Cinderford travel-to-work area as an intermediate area is regarded as a sick joke? Since the designation a year ago, only 18 of the 285 applications made have gone to the first stage of appraisal, and, as far as I am aware, not a single one has come to fruition. Given the intervening increase in unemployment in the area, which has now reached about 17 per cent., will my right hon. and learned Friend reaffirm yet again his determination to make the intermediate area status successful? Will he also let us know how that travel-to-work area compares with others that were designated at the same time?

I assure my hon. Friend that the existence of intermediate areas and the regional selective assistance available to them are important parts of regional policy. If my hon. Friend has any reason to believe that a project put forward from his constituency has not received the consideration that it should be given under the criteria, I hope that he will let us know.

Is the Secretary of State aware that the House is not terribly interested in what he tells the Conservative party at Blackpool, but is much more interested in what he does as the Minister in charge of regional policy? Will he confirm that it is the stated aim of his policy massively to reduce regional aid for the regions, and confirm that that is already being acheived? When the impact of that policy becomes clear in the regions, will the Secretary of State make a statement to the House and, in the light of reductions in regional aid and the ever-increasing unemployment in the regions, will he revise his policy and reinstate the policy which his predecessor hacked to pieces?

I do not undertake to do any of the things for which the hon. Gentleman asks. He sounded like an old gramophone record that needs replacing. As I said in answer to a previous question, I do not believe that the success or value for money of regional policy can be judged simply by the amount of money being poured into it. The evidence given repeatedly over the years of money spent in the name of regional policy not leading to more jobs in the regions is legion. There is evidence to support the better targeting of regional policy, which we are pursuing. I have given an example from the west midlands, and I am happy to give an example from Bishop Auckland, a different part of the country, where, in a comparatively short time and in a small area, nearly £3 million of grants have been offered which have led to the creation or safeguarding of more that 1,200 jobs. The overall effect is, of course, impossible to assess only a matter of months after the policy came into existence, but I shall certainly be happy to report to the House from time to time on the effects.

I agree that one cannot judge the effectiveness of regional policy solely in terms of the money spent, but does my right hon. and learned Friend agree that arguments that regional policy is ineffective because it does not create additional net jobs in the economy as a whole also miss the point? Obviously, all new jobs are welcome, but is not the key feature of regional policy the fact that it is intended to transfer jobs into areas where assistance is available? Measured against that test, is not the policy quite successful?

My hon. Friend is right. The figure of about 500,000 jobs in the region has been mentioned and I do not think that we need be embarrassed or ashamed about the fact that we are spending money—effectively now, I hope—to redress the balance to which reference has been made from both sides of the House.