Regional Stimulation

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 1st November 1989.

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Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire 12:00 am, 1st November 1989

To ask the Secretary of State for Trade and Industry if he has any new plans for stimulating industry in British regions.

Photo of Douglas Hogg Douglas Hogg Minister of State (Department of Trade and Industry)

Changes in the focus of our regional policies were made early last year. There are no plans for further changes.

Photo of Mr Harry Barnes Mr Harry Barnes , North East Derbyshire

In the Derbyshire, North-East constituency in recent years, there has been a decline in coalmining, which will be exacerbated by the ports Bills that hon. Members are due to discuss and a reduction in employment caused by declining railways. The decline in employment is due also to the steel industry in the travel-to-work area and the rationalisation that is taking place in the chemical industry. What has the Department of Trade and Industry done to help my constituents and similar constituents? The Government have cut regional funding by 72 per cent. since 1979. Will they alter their policy in the run-up to 1992, or are we to expect the same policy from the free enterprise fanatics on the Government Front Bench?

Photo of Douglas Hogg Douglas Hogg Minister of State (Department of Trade and Industry)

Once again we have a case of an hon. Gentleman who has not reflected on his question before asking it. I was disappointed that he did not pay tribute to my right hon. Friend the Chancellor of the Duchy, who managed to get the Chesterfield travel-to-work area made eligible for European structural grants. It would have been at least charitable to reflect on that. The Government's substantial instruments of policy are selective and effective. The principal Department of Trade and Industry instruments are regional selective assistance, regional enterprise grants, the consultancy initiative and the ability of English Estates to build in deprived areas. That is a powerful and carefully targeted arsenal of policies.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

Does not the Opposition's pose as the friend of manufacturing industry in the regions wear a little thin when hon. Members bear in mind that the Opposition have opposed every one of the Government's supply side reforms aimed at increasing the competitiveness of manufacturing? Manufacturing output fell under the last Labour Government, whereas, under this Government, it has risen, particularly in Derbyshire, where manufacturing output and employment have risen faster than in most other regions.

Photo of Douglas Hogg Douglas Hogg Minister of State (Department of Trade and Industry)

My hon. Friend is wholly right. It is because we have adhered to our policies that we have seen dramatic downturns in unemployment, which would have gone up had we accepted the policies of the Labour party. Between March 1986 and September 1989 in the northern region unemployment fell by 18·1 per cent. to 10·4 per cent. In the north-west region it fell from 16·6 per cent. to 9·2 per cent. In Yorkshire and Humberside it fell from 15 per cent. to 8·3 per cent. That is a tribute to the Government's regional policy.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarfon

In view of the potential importance of projects in companies such as Nissan and Toyota, does the Minister accept that one way of trying to stimulate employment in manufacturing in areas of high unemployment is to encourage joint ventures between those companies and component manufacturers within the United Kingdom? Does the Minister accept also that it would be particularly helpful if there were positive incentives to locate such developments in areas of high unemployment?

Photo of Douglas Hogg Douglas Hogg Minister of State (Department of Trade and Industry)

Such joint ventures are indeed, extremely valuable and they may well be eligible for, for example, regional selective assistance.

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley

Does my hon. Friend agree that one of the most destructive policies for industry in the regions would be if the Government were to impose economic sanctions on South Africa, a policy advocated by the Labour party? Does he realise that such a policy would throw hundreds if not thousands of engineering workers in Yorkshire on to the dole queue? Will he assure the House that the Government will never adopt such a destructive and counter-productive policy?

Photo of Douglas Hogg Douglas Hogg Minister of State (Department of Trade and Industry)

This afternoon we have identified two policies of the Labour party which would be extremely damaging in that respect. The first is its policy on defence cuts and the second its policy of economic sanctions against South Africa. The mainstream policies of the Labour party would result in a substantial increase in unemployment.

Photo of Richard Caborn Richard Caborn , Sheffield Central

In the absence of any co-ordinated regional policy, is the Minister aware that all the reports from Europe clearly show that the industrial regions of the north will feel the winds of 1992 quite adversely? Is he also aware of the Audit Commission report "Urban Regeneration and Economic Development" which in its conclusion says: Government support programmes are seen as a patchwork quilt of complexity and idiosyncrasies. They baffle local authorities and business alike. There are now 14 instruments in the urban and regional and regeneration programme which nobody can understand and their funding has gone down by 72 per cent. on the 1979 figure.

Photo of Douglas Hogg Douglas Hogg Minister of State (Department of Trade and Industry)

The hon. Gentleman's longwindedness does not improve his argument. He and his hon. Friend's were clearly not paying attention when I identified the carefully chosen selective instruments of policy which we have put in place. The consultancy initiative in particular is directed to the problems that will arise in 1992 and thereafter.