Government Regional Policy

Part of Opposition Day – in the House of Commons at 5:25 pm on 27th October 1986.

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Photo of Mr Alexander Pollock Mr Alexander Pollock , Moray 5:25 pm, 27th October 1986

I regret giving way, as the hon. Gentleman has failed to understand the rationale behind the new welcome community charge, which we trust will be introduced in the Gracious Speech.

Another suggestion which is of relevance, not just to the farming community but to the wider business community, and which hon. Members should consider is the merit of a two-tier interest rate system. That system is operated by many of our partners in the European Community. My constituents Lind it hard to understand why, when there is a financial crisis, no distinction is drawn between those local business men who must borrow as part of sound business practice and those international speculators whose motives are utterly different.

There is no especial difficulty in offering subsidised credit to one part of the community. That is what happens with French farmers. The Government merely need to subsidise the lending institution which can then borrow at the going rate on the financial market and lend more cheaply to farmers, or whoever the beneficiaries might be.

Another beneficiary could be the textile industry, which is of great importance to rural economies, including Elgin and Keith, both of which are in my constituency, but unfortunately outwith the Highlands and Islands Development Board's extension. Those communities would benefit enormously from being able to plan with confidence in a stable atmosphere rather than in the current uncertainty. I hope that when my hon. Friend the Under-Secretary replies he will say whether his Department and the Scottish Office are willing to explore this matter further with the Treasury.

The relationship of company headquarters to their manufacturing bases was touched on by the right hon. Member for Glasgow, Hillhead (Mr. Jenkins). Too often in recent years too many of the decision makers in board rooms have moved further and further from the social and economic fabric on which their profits rest. Clearly, as recent events in the whisky industry have shown, moral persuasion and principle are insufficient weapons to bring them closer. I wonder, therefore, whether a different appeal could be made, an overt appeal to the pockets of board members by way of tax incentives for making a worthwhile contribution to the arts or to other worthy causes in their work forces' locality. That would be better than money being spent on grander settings elsewhere for reasons of national or international prestige. Such incentives might provide a worthwhile route back to the re-creation in those companies of local loyalties, local commitments and investment by those whose money is made largely from the remoter regions.

In short, for a successful regional policy, new ways must continually be sought to develop an ever stronger partnership between central Government and those businesses on which the regional economy must continue to rely.