Government Economic Policies

Part of Opposition Day – in the House of Commons at 6:51 pm on 20th January 1987.

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Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup 6:51 pm, 20th January 1987

I intervene to make, as briefly as I can, four practical points. The first is on the question of the north-south divide, with which I understood the debate to be largely concerned. My right hon. Friend the Chancellor of the Exchequer is right that for a long time there has been a north-south divide. What is characteristic of these past few years is that the dividing line has moved further and further south. My right hon. Friend is also right that that is largely due to historical and geographical reasons—the placing of our industry and our ports and the changes in trade patterns that have occurred since.

Since 1945, in cyclical variations, Scotland, the north and Wales suffered first and came out of the cyclical arrangement last. With the development policies that were pursued by successive Governments, that was gradually changed. The first change came about in Wales, then later on in Scotland and the north-east.

In this decade the line has come south of Birmingham, and the midlands, for the first time, has found itself affected by a post-war cyclical change from which it has never suffered before. The consequence of that is that, whereas the midlands has often complained about action which was being taken in development policies for the rest of the country, now the midlands is asking that it should be treated equally at least with the other parts of the country which are benefiting from regional policy.

The point that I would like to make to my right hon. Friend the Chancellor is that the Government are investing more in those areas outside the south, but they are not getting the benefit of what they are doing publicly because they are still emphasising—as he did in his speech, and as the Prime Minister has done—that there are rich areas in the north. That implies, "Why are you making a fuss?" They then say, "Everything must be left to competition." Neither of those things is helpful with regard to the regions.

Some spots in Scotland, Wales and the north are richer than others, but they are limited compared with the south. The people who live in those areas know that perfectly well, and they know the appalling problems with which they are confronted from the point of view of jobs and certain other accessories of life. Therefore, as long as that attitude is adopted we cannot make the appeal to them that we ought to be making.

Then we have the claim that everything must be left to competition. It is quite plain that competition does not have an answer to these problems. There has been criticism of development policies—it used to come particularly from the midlands—that they had achieved nothing. That is a completely fallacious argument. The development policies achieved the changes that I have mentioned. When my right hon. Friend the Prime Minister says that it is wrong to treat those areas as if they were down and out, she is in part correct. The north-east has the finest infrastructure of any part of the country. Parts of Scotland have a magnificent infrastructure. When my right hon. Friend the Prime Minister says that there are high-tech areas in Scotland that are successful and profitable, she is right—but why? It is because we put the money into building Livingston and gave industry the inducements to go to Livingston. Therefore, Livingston has concentrated on high tech and it is successful. None of that would have happened had it been left to competition and the market.