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Regional Aid

Volume 130: debated on Tuesday 29 March 1988

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To ask the Secretary of State for Employment if the advice of his Department is sought before a regional development grant is arranged for a company contemplating moving itself and its work force to another area.

The regional development grant scheme is essentially automatic. If a project meets the published criteria, the project will normally be approved and grant paid by the operating department without reference to the Department of Employment.

I thank my hon. Friend for his reply, but will he bear in mind that these very substantial grants can lead to a considerable distortion of trade? Will he make sure that in future his Department is kept aware when grants of considerable size—say, up to £1 million—are made available to firms to move to a neighbouring town, because they can completely distort the local employment picture?

I take my hon. Friend's point, but I think he is referring to the regional development grant, which has been automatic. Applications for this grant cannot be made after Thursday of this week, but regional selective assistance will continue.

The Minister has just said that the last date to apply for this grant is Thursday of this week. In the light of that will he, first, monitor the nature of automatic grants that are made available in Europe to ensure that firms coming here for the first time to extend their plants or to set up on the green field sites are not put at a disadvantage? Secondly, will he publish the criteria for regional selective assistance so that firms fully know what they are entitled to now that the regional development grant is to be phased out?

Both the hon. Gentleman's questions are matters for my ministerial colleagues in the Department of Trade and Industry, not for me.

My hon. Friend will recall that a couple of years ago the Government quite arbitrarily changed the rules that enabled grants to be paid to employees moving from one area to another. As the Ministry of Defence has 600 vacancies for administrative and clerical assistants and is having to engage large numbers of agency staff, what liaison is there between my hon. Friend's Department and the Ministry of Defence to try to alleviate that shortage by helping people to move from parts of the country where there is high unemployment to the London area?

We are in contact with other Government Departments about such matters, and our employment service and the MSC keep a very close eye on opportunities for jobs and job creation.