Assisted Areas (Incentives)

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 7th February 1972.

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Photo of Mr Jack Dormand Mr Jack Dormand , Easington 12:00 am, 7th February 1972

asked the Secretary of State for Trade and Industry whether, in view of the latest unemployment figures, he will now give consideration to changing the incentives available to firms in assisted areas.

Photo of Mr John Davies Mr John Davies , Knutsford

I would refer the hon. Member to the answer given to my hon. Friend the Member for St. Maryle-bone (Mr. Kenneth Baker) on 17th January.— [Vol. 829, c. 3.]

Photo of Mr Jack Dormand Mr Jack Dormand , Easington

Would not the Secretary of State agree, as over 1 million are unemployed, and in spite of what he has said to my hon. Friends this afternoon, that now is a most opportune time to abolish the differentiation relating to incentives between firms already established in assisted areas and those which wish to establish there? Surely the only criterion should be whether additional jobs will be created. The firms which are already there have proved their loyalty and are the better bet. Would the right hon. Gentleman also examine the present inflexibility of the loans procedure so that firms in assisted areas can obtain maximum benefit from it?

Photo of Mr John Davies Mr John Davies , Knutsford

There is a great tendency, in spite of the points made this afternoon, to ignore the very considerable advantages which are already available to the indigenous concerns within special development areas and development areas. The issues raised repeatedly this afternoon revolve around the operational grant, the rent-free characteristics and the higher building grants characteristics payable to incoming industry. I am sure that the House recognises that the movement of new industry into the development areas is a fundamental necessity, which must be encouraged. There must certainly be contrasts in the advantages which are given to new industry to persuade it to move. There will be few hon. Members who do not believe that something of this kind is necessary. If on every occasion there is pressure to raise the level for existing firms, discrimination will not be maintained.

Photo of Mr John Wilkinson Mr John Wilkinson , Bradford West

May I remind my right hon. Friend of the representations made today by my hon. Friends from Bolton—I also add mine—that areas such as the textile districts of Lancashire and Yorkshire, which suffer from being adjacent to intermediate development areas, should be looked at again, as my right hon. Friend himself indicated in an earlier reply on the subject of industrial development certificates?

Photo of Mr John Davies Mr John Davies , Knutsford

Yes. I shall certainly take note of all those points, which are clearly very much in one's mind in looking anew at regional policy, as has been referred to by my right hon. Friend the Prime Minister and myself.

Photo of Mr Thomas Urwin Mr Thomas Urwin , Houghton-le-Spring

Would the right hon. Gentleman agree that he has received many representations from different bodies about the necessity of equalising in the way suggested by my hon. Friend the Member for Easington (Mr. Dormand) and other hon. Members during Question Time today? Whilst I entirely accept that the major requirement is to encourage more and more new firms into the development areas, the right hon. Gentleman will agree that with this hiatus the efforts being made are by no means reaching the fruition required to improve the employment situation. In the present situation would it not be better for development areas if the right hon. Gentleman paid more serious and earnest attention, on only a short-term basis, to raising grants available for indigenous industry to the level of those given to incoming firms?

Photo of Mr John Davies Mr John Davies , Knutsford

This is exactly the same point. The question I have constantly in mind is whether the raising of these levels to the equivalent of those for incoming industry would have an effective result in terms of new investment and employment. To date the evidence for this is very thin despite the very numerous representations made to me.

Photo of Mr Kenneth Baker Mr Kenneth Baker , St Marylebone

May I press my right hon. Friend to go a little further and say whether the review of regional policy, which the Government have in hand and which will no doubt be published fairly soon, will be more specific?

Photo of Mr John Davies Mr John Davies , Knutsford

I prefer not to anticipate publication, which will be within a reasonable time.

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

Is the right hon. Gentleman aware that the reason for these Questions and the interest in the subject is the uncertainty created by the Government themselves? In a rather cosy interview with the Sunday Telegraph a week ago, the Secretary of State said that we were not likely to have the report for six months. If that is so, will not uncertainty continue in the development areas and the other weaker areas of Britain, so that mobile industry will continue to sit back and wait until the review is complete? Why does not the right hon. Gentleman put some urgency into the matter?

Photo of Mr John Davies Mr John Davies , Knutsford

The hon. Gentleman is mistaken. It was said in that article that it would be within six months.