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Orders of the Day — Regional Policy

Part of the debate – in the House of Commons at 6:50 pm on 8th July 1981.

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Photo of Mr John MacGregor Mr John MacGregor Parliamentary Under-Secretary (Department of Industry) 6:50 pm, 8th July 1981

The right hon. Member for Salford, West shakes his head. There is no answer to the point made by my right hon. Friend the Secretary of State for Employment in the last employment debate that one of the major reasons for the difficulties that our economy has suffered in the last two years of world recession is that from 1975 to 1980—four years of Labour Government and the first year of this Government—unit labour costs in the United Kingdom rose by 88 per cent., whereas in France they rose by 45 per cent., in the United States of America by 36 per cent., in Germany by 17 per cent., and in Japan by nil. That fact, more than anything else, has been responsible for the difficulties of manufacturing industry in the last two years. I suggest to the hon. Member for Wrexham (Mr. Ellis) that that has had a great impact on many manufacturing industries in the regions, as elsewhere.

It is widely recognised on both sides of the House, and has been recognised in the recent regional debates, that the regions have had over the years a major industrial restructuring problem. Vast sums of money have been spent in the regions. In most cases the infrastructure is now substantially better, so that to a large extent that problem has been overcome. There is heavy dependence on the industries concerned, and restructuring is essential. They have depended heavily in the post-war years on help from elsewhere.

The right hon. Member for Chesterfield had a great deal to say about the unemployment figures. My right hon. Friend the Secretary of State was right to point out that during his period in office, from the lowest level to the peak, the increase in unemployment was 165 per cent., compared with 102 per cent. now. But during the earlier period the Labour Government were not tackling many of the underlying problems of uncompetitive industries and were not getting the productive potential which is now coming through in many of the manufacturing industries.

My hon. Friend the Member for Anglesey (Mr. Best) made an extremely important point about inward investment. In looking at the direct impact of regional development grants, we can see that the one area where it has been very beneficial is in regard to inward investment in the regions. Even in times of recession, that inward investment has often enabled a region to weather the storm. Indeed, many of the companies in the regions which are subsidiaries of overseas companies are making plans for expansion. [HON. MEMBERS: "Where?"] If I had more time I would list them.

When the hon. Member for Liverpool, Kirkdale (Mr. Dunn) said that the companies concerned were coming here only in order to get into the Common Market, he was hopelessly wide of the mark. [Interruption] They are, of course, of great benefit to us, but the hon. Member was wide of the mark in being critical of them. They are of great benefit because they are helping our exports to the Community. Many of the companies, particularly those from America and Japan, are investing here much more than anywhere else in the Community. That is something to shout about. They are producing good results with the better management that they often bring and with their high technology.

My hon. Friend the Member for Anglesey, therefore, was right in regarding inward investment as being of fundamental importance and significance to the regions. If we shouted a little more about those successes and that kind of inward investment, companies not only from overseas but from other parts of the United Kingdom might think more about investing in the regions.

The hon. Member for Newton (Mr. Evans) and the right hon. Member for Widnes said that we did not have a regional policy. Indeed, the hon. Member for Newton had the effrontery to suggest that no money was being spent on the regions. The hon. Member for Wrexham said that it was merely cosmetic. They are very expensive cosmetics, because in the last year alone we have spent £730 million on regional policy. That is not peanuts, and it is on top of a lot of expenditure from other Departments. That sum has been spent specifically on regional policy.

Opposition Members mentioned urban development. The Department of the Environment has spent £200 million on inner urban areas in the last year.