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Mrs. Virginia Bottomley : I welcome the hon. Gentleman's support for the rationalisation of the economic development power in the Bill. As he said, local government has been involved in economic development over the years but has had to use a wide range of measures to justify it. Even section 75 of the Weights and Measures Act 1986, I understand, can be used as a basis for setting up an advice system for consumers, and it is important to give the powers some coherence.

The hon. Gentleman said that much of the Bill is concerned with restrictions and limitations. We believe that that is appropriate. Because of these measures, the hon. Gentleman's constituency and those of many Opposition Front Benchers are likely to benefit more than

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my constituency or that of my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer). Consultations are taking place with local authorities on the precise form of the regulations. The hon. Gentleman believes that they should not prevent local authorities giving assistance in grants, loans and guarantees where those authorities do not have assisted area status or otherwise discriminate between authorities. We want to find a way of having regard to the criteria that face different local authority areas and ensuring that they can use the economic development power, especially through loans, grants and guarantees. This would be inappropriate in some of the more privileged areas.

The amendments taken with amendment No. 248 relate to concern about the unnecessary and unhelpful restrictions on the scope of the regulations as they apply to other Government Departments and the European Community. I assure hon. Members that my Department keeps in close touch with all other Government Departments that have an interest in the use of the new power. In that way, we can ensure that the power that we are giving local authorities does not have an adverse effect on those activities in which they are involved at the request or on behalf of other Government Departments.

The amendments mention training. It is important to emphasise that the Government have a strong view about the crucial importance of training in establishing businesses. It is certainly not our intention that the regulations should inhibit that in any way. Amendment No. 254 provides that, if the regulations cause any difficulty, there will be a requirement to review them within two years. That is unnecessary. We shall continue to examine the effect of the regulations.

I hope that the hon. Member for Leeds, West (Mr. Battle) accepts that there are certain economic development measures that it is appropriate and right to target towards areas of greatest need. We wish to finalise those matters in collaboration and on the basis of discussion with local authority associations. It is important to ensure that those powers operate in conjunction with the provisions of other Government Departments and assistance from the European Community. We shall, of course, continue to examine the operation of these measures and review them accordingly. I hope, therefore, that the hon. Gentleman will not feel it necessary to press his amendment.

Mr. Battle : The Minister referred to other Government Departments-- that was an interesting analogy. In providing nationwide support under the enterprise initiative or the enterprise allowance scheme, the Government recognise that if they give an enabling power, they need not impose restrictions. Can I instead suggest that local authorities should determine whether to exercise that power? When talking about the economy, Ministers have referred to level playing fields. I see no reason why we cannot have a level playing field in determining the use of a local authority's economic power. We are still left with unspecified restrictions. The Government seem to be uncertain about clause 26. They are prepared to introduce it, but it is as though they are feeling their way with a piecemeal introduction because they are not willing to go the whole way in letting local authorities use the power.

This is not a special pleading for my own constituency. Leeds has lost its assisted area status ; it has gone to

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Bradford. The irony is that I am pleading on behalf of many unemployment black spots in the south, such as Thanet and Clacton, and areas such as Selby. These areas could well use the new start up and small business provision. It should be a nationwide power. It ought not to be restricted.

We ought to divide the House and press the Government not to restrict the power. We should prefer it to be available to all local authorities. We cannot live in the hope that unspecified restrictions will be provided in the future, according to circumstances. Every local authority would then have to appeal directly to the Department, according to its own particular circumstances. Either it is a general power or it is not.

Mrs. Virginia Bottomley : The economic development power is an important power. Any question of restriction applies only to grants, loans and guarantees of borrowing to businesses run for profit. All other forms of assistance will be permissible everywhere. All inner urban areas, rural development areas and derelict land clearance areas will be included.

The Government are happy to consider other areas, but it is important to stress that consultations are still taking place to ensure that there are no arbitrary cut-offs. I repeat that it is the provision of financial assistance that will be restricted. Other forms of assistance--training, advice and guidance--will be available throughout the country.

Mr. Battle : Again the Minister has missed the point. I am not talking simply about ITEC training. The key point relates to loans and grants to small businesses. Of course the question is whether a business is being run at a profit. I hope that the Government are concerned that businesses should be run at a profit. It is not a charitable operation ; it has to do with economic development. I should have thought that the Government would be surprised that we are pressing the issue, because we agree with them on that point. However, the Government say that they intend to restrict the power in the case of of some authorities but not in the case of others. The question has nothing to do with the amount of money. It is simply whether any local authority in Britain can exercise that power. I am still not happy with the Minister's reply. Therefore, I shall press the amendment to a Division.

Question put, That the amendment be made :--

The House divided : Ayes 49, Noes 154.

Division No. 238] [11.42 pm

AYES

Abbott, Ms Diane

Banks, Tony (Newham NW)

Barnes, Harry (Derbyshire NE)

Battle, John

Beith, A. J.

Bermingham, Gerald

Blunkett, David

Brown, Nicholas (Newcastle E)

Clay, Bob

Cohen, Harry

Corbett, Robin

Crowther, Stan

Cryer, Bob

Cunliffe, Lawrence

Davis, Terry (B'ham Hodge H'l)

Dixon, Don

Foster, Derek

Golding, Mrs Llin

Howarth, George (Knowsley N)

Howells, Dr. Kim (Pontypridd)

Illsley, Eric

Ingram, Adam

Kennedy, Charles

Lewis, Terry

Livsey, Richard

Lofthouse, Geoffrey

Loyden, Eddie

McAllion, John

Maxton, John

Meale, Alan

Michael, Alun

Morgan, Rhodri

Murphy, Paul

Nellist, Dave

O'Brien, William

Patchett, Terry

Pike, Peter L.

Prescott, John

Robertson, George

Skinner, Dennis

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Column 834

Smith, C. (Isl'ton & F'bury)

Smith, J. P. (Vale of Glam)

Soley, Clive

Spearing, Nigel

Taylor, Matthew (Truro)

Wallace, James

Welsh, Andrew (Angus E)

Welsh, Michael (Doncaster N)

Wise, Mrs Audrey

Tellers for the Ayes :

Mr. Frank Haynes and

Mr. Allen McKay

NOES

Aitken, Jonathan

Alison, Rt Hon Michael

Amess, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Ashby, David

Atkinson, David

Baker, Nicholas (Dorset N)

Baldry, Tony

Bendall, Vivian

Bennett, Nicholas (Pembroke)

Bevan, David Gilroy

Boscawen, Hon Robert

Boswell, Tim

Bottomley, Peter

Bottomley, Mrs Virginia

Bowden, Gerald (Dulwich)

Brown, Michael (Brigg & Cl't's)

Burns, Simon

Carlisle, John, (Luton N)

Carrington, Matthew

Carttiss, Michael

Chapman, Sydney

Chope, Christopher

Clark, Dr Michael (Rochford)

Clarke, Rt Hon K. (Rushcliffe)

Conway, Derek

Coombs, Anthony (Wyre F'rest)

Coombs, Simon (Swindon)

Cope, Rt Hon John

Couchman, James

Currie, Mrs Edwina

Davies, Q. (Stamf'd & Spald'g)

Davis, David (Boothferry)

Day, Stephen

Douglas-Hamilton, Lord James

Durant, Tony

Emery, Sir Peter

Fallon, Michael

Favell, Tony

Fishburn, John Dudley

Forman, Nigel

Forsyth, Michael (Stirling)

Forth, Eric

Franks, Cecil

Freeman, Roger

French, Douglas

Gale, Roger

Garel-Jones, Tristan

Gill, Christopher

Goodhart, Sir Philip

Greenway, John (Ryedale)

Gregory, Conal

Griffiths, Sir Eldon (Bury St E')

Griffiths, Peter (Portsmouth N)

Grist, Ian

Gummer, Rt Hon John Selwyn

Hague, William

Hamilton, Neil (Tatton)

Hargreaves, A. (B'ham H'll Gr')

Harris, David

Hayes, Jerry

Heathcoat-Amory, David

Heddle, John

Hicks, Mrs Maureen (Wolv' NE)

Hind, Kenneth

Hogg, Hon Douglas (Gr'th'm)

Howarth, Alan (Strat'd-on-A)

Hughes, Robert G. (Harrow W)

Hunt, David (Wirral W)

Irvine, Michael

Jack, Michael

Jackson, Robert

Janman, Tim

Jessel, Toby

Jones, Gwilym (Cardiff N)

Jones, Robert B (Herts W)

Knight, Greg (Derby North)

Lightbown, David

Lilley, Peter

Lord, Michael

MacGregor, Rt Hon John

Maclean, David

McLoughlin, Patrick

Maples, John

Miller, Sir Hal

Mitchell, Andrew (Gedling)

Mitchell, Sir David

Moss, Malcolm

Moynihan, Hon Colin

Needham, Richard

Nicholls, Patrick

Nicholson, David (Taunton)

Nicholson, Emma (Devon West)

Norris, Steve

Paice, James

Patnick, Irvine

Patten, Chris (Bath)

Pawsey, James

Peacock, Mrs Elizabeth

Porter, Barry (Wirral S)

Porter, David (Waveney)

Powell, William (Corby)

Raffan, Keith

Redwood, John

Renton, Tim

Rhodes James, Robert

Riddick, Graham

Ridley, Rt Hon Nicholas

Ridsdale, Sir Julian

Roberts, Wyn (Conwy)

Rowe, Andrew

Sackville, Hon Tom

Shaw, David (Dover)

Shaw, Sir Giles (Pudsey)

Shephard, Mrs G. (Norfolk SW)

Shepherd, Colin (Hereford)

Shepherd, Richard (Aldridge)

Skeet, Sir Trevor

Smith, Sir Dudley (Warwick)

Smith, Tim (Beaconsfield)

Soames, Hon Nicholas

Stanbrook, Ivor

Stanley, Rt Hon Sir John

Stern, Michael

Stevens, Lewis

Stewart, Andy (Sherwood)

Stradling Thomas, Sir John

Summerson, Hugo

Taylor, Ian (Esher)

Taylor, Teddy (S'end E)

Temple-Morris, Peter

Thompson, D. (Calder Valley)

Thompson, Patrick (Norwich N)

Thurnham, Peter

Townend, John (Bridlington)

Tracey, Richard

Trippier, David

Twinn, Dr Ian

Viggers, Peter

Waddington, Rt Hon David

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