Regional Development Grants

Part of Orders of the Day — Industry Bill – in the House of Commons at 4:30 pm on 7 February 1980.

Alert me about debates like this

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , Knutsford 4:30, 7 February 1980

Perhaps that intervention has saved the hon. Member for Vauxhall a speech. I must proceed with my own. Amendment No. 24, which stands in my name, lays down that, where it is estimated that a regional development grant will attach to assets from which employment will be created on a scale of £10,000 or more per job to be created, the grant should be subject to the affirmative resolution procedure.

I am seeking to apply some restraint to the super capital-intensive treatment which attracts vast sums in grant and generates no employment. I seek also to extend the scope of parliamentary accountability. I hope that on the latter ground my amendment will command general assent on both sides of the House, and on the former ground I hope that I can demonstrate that there is a good case for support from my right hon. and hon. Friends.

It is common knowledge that we face a major problem in bringing public expenditure—left on a runaway express by the last Government—under control. I do not suggest that the Department of Industry is the only Department which should be looking closely at its books, but in some respects it has a duty in that respect. That is a particular concern of my amendment.

I cite three examples of what I mean. In 1978 the previous Government paid out £27·6 million in regional development grant to the Hoffman La Roche company at Dalry in Ayrshire. It was estimated that that particular investment would ultimately produce 450 permanent jobs. If my arithmetic is correct, that works out at about £60,000 per job to be created.

Last year my right hon. and hon. Friends in their wisdom decided to provide £15·75 million in regional development grants to the Dow Corning Corporation to enable it to extend its factory in South Wales. That grant was for the creation of 125 jobs at a rate of £126,000 per permanent job created. Another project is the giant petrochemical complex looming over the horizon at Moss Morran in Fife. According to the latest accounts, this is likely to create 300 permanent jobs. The cost of this in automatic regional development grant is likely to be in the region of £75 million. That works out at about £250,000 per permanent job created.

Beyond that, there is the prospect of yet another petrochemical complex, this time on the Cromarty Firth. The details of that are not sufficiently advanced for us to know the scale of the employment to be created. However, the amount of regional development grant involved looks as though it might easily be in the region of £60 million or more and—surprise, surprise—the Dow chemical company is the beneficiary once again. That company must sometimes believe that there is at least one country in the world where money grows on trees.