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Orders of the Day — Regional Policy

Part of the debate – in the House of Commons at 6:19 pm on 8th July 1981.

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Photo of Mr Anthony Beaumont-Dark Mr Anthony Beaumont-Dark , Birmingham, Selly Oak 6:19 pm, 8th July 1981

Debates on regional policy are usually pegged on a particular feature. Today that feature appears to be Warrington. In case the Opposition have not heard, may I say that there are other places in Britain.

Some believe that regional grants create prosperity and new jobs. The West Midlands does not believe that they do anything of the sort. IDCs did tremendous harm with good intent. Regional grants stop businesses which, having gone to an area and prospered, wish to expand in the same place because it is sensible not to have a 200-mile production belt from doing so. Regional grants mean that they must move to Liverpool, Wales or Scotland. That may be a laudable objective, but the companies which moved have bitterly regretted it. They have the worst of all worlds. The production facilities are in the wrong place. That is happening with British Leyland. It is not wicked because it wishes to rationalise. It wishes to bring some sense of rationality back into its business so that it can make cars under one roof—as do the Japanese, the Germans and the Italians.

Let us consider the steel industry. Once again, with good intent, the House has written off £3,000 million of taxpayers' money. There was a lack of rationality about where the steel industry was forced to locate. It was forced to have a mill here and a mill there. I understand that regional policies are of good intent. Since 1975, £685 million from the Common Market has gone north. During the past 10 or 12 years £5,000 million of taxpayers' money has gone north. Nothing has come to the West Midlands, especially Birmingham.

Unless regional policies expand industry and encourage it to do what it can do best, they do not work. My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) favours sectoral grants. So do I. That is the only way to encourage industry. The idea that shipping huge sums of money to the North, Wales or Scotland creates something is not correct. It is not honest to suggest that it is. All that that does is to break down the genuine, proper commercial rhythm of a business as it wishes to grow. We must create the right conditions for industry, as was done in the past. That was why Birmingham became a great industrial centre. It was right for people to be there. Birmingham did not grow because of the grants system. The grants system has helped to destroy it and its industry. The good intent of successive Governments has created nothing but an organised chaos. It has prevented businesses from doing what they wanted to do where they could best do it. When they have gone elsewhere because of pots of gold, free rates, free tax periods and this, that and the other, they have not prospered. It was not industrial logic to move.

I come from the area that has suffered most from rationalisation. We should have an open attitude so that businesses are encouraged on a sectoral basis to do what they wish to do. Giving money away is not the right idea. We should reduce the tax paid by industry overall. That is much more likely to make industry prosperous and encourage people to risk their money. Do not think that by spending industries' money for them, by having pious good intent and by the nonsense of referring to unemployment as an evil—which we all know it is—it will go away and that if we talk nicely the right things will be achieved. All we shall succeed in doing is to destroy prosperity in one area without any guarantee that it wilt go elsewhere.

I hope that the House will get away from the nonsense of suggesting that regional policies introduced by this Government, or by any other Government, will create prosperity. They cannot do that. It is the interference of Government in industry that has created the troubles of Britain today.