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Mr. Tim Smith: The hon. Gentleman mentioned the third world and especially African countries. Has he seen the three-dimensional chart on page 18 of the White Paper showing the clear relationship between the trade orientation of different countries and growth in living standards? Is it not important that those countries should be outward looking and not protectionist because that would enable them to benefit from growth in world trade?

Mr. Kirkwood: Of course I accept that, and I hope that I did not give the impression of suggesting anything different. Some of the International Monetary Fund and World bank constraints aimed at making such economies more efficient have had a harsh impact on their economies and their primary producing industries. Some evidence suggests that, financially, they are suffering severely. The Government have been taking the lead on some of those issues and I welcome that. Debt reduction for some African countries would help their economies through the transitional process of becoming more efficient and I am in favour of that.

There is real concern about the extent to which counterfeit labels are being put on such items as textile jerseys, although the problem is not limited to the textile industry. If they do their work properly, that problem can be dealt with in Singapore.

I should like to mention briefly the domestic trade situation and the need to assist local UK manufacturers to compete in the world marketplace. I get a bit nervous about the situation, because I wonder to what extent some of our small and medium-sized businesses are being

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squeezed out of that marketplace by the volume of inward investment. That is why I said that the DTI should examine carefully the effect of inward investment flows on our manufacturing sector. I hope that the DTI will give proper consideration to small and medium-sized businesses.

Coming from my part of south-east Scotland, I am particularly interested in the knitwear, textile and electronics industries, which are potentially not only European-level but world-class export players--but only if they receive increased support in marketing, training and modernising. The textile industry also requires more assistance in diversifying. I hope that the DTI will not spend all its time on big projects--which I have already acknowledged that I welcome--at the expense of smaller and medium-sized businesses.

The textile industry will have to slim down its labour force if it is to survive. Communities such as Hawick, which is in my constituency, are almost entirely dependent on the textile industry. In the travel-to-work area around Hawick, for example, it accounts for 80 per cent. of manufacturing employment. The industry requires help in modernising, additional capital input, more flexible work patterns and help with marketing initiatives. It needs some assistance to help it bridge the gap into the next century, so that it can compete effectively.

I shall understand if the Minister, in the time available to him, cannot deal with all the points that have been raised, but he might arrange to reply by correspondence. The Industrial Development Act 1992 allows for occasional reviews of regional assistance areas, and the decision on which areas are eligible for assistance and when reviews are undertaken is within ministerial gift. I know that the Department is considering the boundaries of individual travel-to-work areas, and that a new regional assistance map cannot be produced until the boundaries have been determined. Will the Minister tell us when that work will be completed, and when the Government--irrespective of who is in government--will be able to reconsider eligibility?

In south-east Scotland, travel-to-work areas are excluded from any regional assistance, basically because the headline unemployment levels are not sufficiently high. The current method of collecting unemployment statistics in sparsely populated areas is unsatisfactory, because of dodgy statistical methods in assessing employment levels. Other criteria should be examined when a review of regional selective assistance is conducted. I should like to persuade the Government that low GDP per head--in addition to population sparsity, size of the cohort over retirement age and lack of job opportunities--should be a significant factor in determining eligibility for assistance. Rural areas generally, and not only my own area, are concerned that regional development assistance is failing them and not providing any type of support.

Locate in Scotland has been very successful in bringing Chunghwa to north Lanarkshire. I certainly concede that that community faced substantial problems after the closure of Ravenscraig and other events, and that those problems had to be dealt with. However, they should not have been dealt with exclusively and at the expense of rural areas.

There is a suspicion--I put it no higher--that the provision of assistance through the big investment decisions that are necessary to bring in companies such as

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Chunghwa will mean that the limited resources available to local authorities and local enterprise companies north of the border, although it is not a problem only there, will be siphoned off and diverted, and that other areas must pay the price. However much the assistance is needed in north Lanarkshire, it is needed elsewhere, too. The Government should be very careful to ensure that others are not losing out from some of their big headline successes.

There should be better co-ordination of the help provided by the European Union in social and development fund programmes. My region has access to objective 5b funding, which is of some help. However, there is concern that there will be no more funds after the programme ends, in 1999. That is a real worry, because we have been able to make use of the European regional assistance. It will be difficult for areas such as mine to prosper if we lose that assistance and continue to have difficulty in obtaining access to regional development assistance.

Mr. Gill: Is not there something slightly inconsistent or contradictory about the hon. Gentleman's remarks? Initially in his speech, he said that he was an advocate of free trade, but he has spent five or 10 minutes with the begging bowl out, saying to Government, "Please, can we have more assistance on this, that and the other?" Does not he realise that it is much more effective in any economy to keep taxes low and to leave people with more of their own money to invest? He is advocating more public expenditure--meaning higher taxes, and successful companies having to pay higher corporation tax--which prejudices their investment plans. Does he realise that the Government want to go in the other direction, reducing taxes and leaving money in investor's pockets--so that they can do the investing, rather than allowing him and other politicians to make those decisions?

Mr. Kirkwood: I am merely arguing for--although I hate the phrase--a level playing field. The Government believe in a free, laissez-faire, devil-take-the-hindmost market. I do not support that. I am in favour of competition and free trade, but there must be some market regulation. In my area, the local authority and local enterprise companies are working hard to try to attract inward investment, but we find ourselves with one arm tied behind our back. Other areas have access to assistance. The assistance may be a small amount of overall public expenditure, but it is a vast amount of money compared with the size of the economy in south-east Scotland.

I do not mind which way it goes. It would be fine if we abolish, or if we keep, regional assistance--but it should be more evenly distributed. I am arguing, as best I can--and I hope coherently--that it should be distributed more fairly.

So far as I can see, there are three main needs. I am speaking of them in relation to my constituency because it is the area that I know best, but they have to be borne in mind in rural areas the length and breadth of the United Kingdom. First, we need regional selective assistance to enable small and medium-sized companies in rural parts of Great Britain and the United Kingdom to invest,

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acquire funding and benefit from technology transfer so that they can properly stimulate productivity and process development. Secondly, we need to invest more in people.

Thirdly, we need investment in integrated rural initiatives. If I could see evidence that the DTI or the Industry Department in Scotland were pursing that aim with as much fervour as they are pursuing bigger, headline projects such as gaining investment from Chunghwa and Taiwan and China, I would be much happier. If such evidence exists and I am missing it, I would be delighted to hear about it either this morning or later, in writing, when the DTI has had a chance to reflect on these issues.

I hope that the Invest in Britain Bureau and Locate in Scotland will consider carefully what can be done to support the electronics industry throughout the United Kingdom. I should like the DTI and their colleagues with responsibility for industry at the Scottish Office to examine the possibility of ensuring the spread of high bandwidth communications in rural areas. Of course, it is now possible to use radio and satellite links and land line cables, but we need some basic infrastructure investment. The Government should be stimulating and promoting such investment to develop an information society in industry in rural areas so that our businesses can compete properly on the global stage.

We need modest extra public expenditure to be made available through regional development assistance. We need to provide local authorities and local enterprise companies with better resources and more flexibility so that they can help their own local economies. We also need to integrate the grants that are available from the EU, which are, if anything, likely to become scarcer in the immediate future. That is a cause of some concern.

The textile and electronics industries in my constituency are potentially world-beating industries in the export market. They are often small and medium-sized businesses located in rural settings and are, as a result, currently being overlooked for the investment that they need to prosper. The Government need to consider such issues as a matter of urgency.

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