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Businesses (North-west)
9. Mr. Colin Pickthall (West Lancashire): What assessment he has made of the impact of industries set up in the north-west with the help of his Department on similar enterprises in the same area. [111538]
The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): A key element in determining regional selective assistance is an assessment of the impact of the investment on national and regional economies and on relevant industrial and commercial sectors.
Mr. Pickthall: Is my right hon. Friend aware of the case of Europanel in Skelmersdale? It was a thriving
manufacturing concern until a foreign firm opened up in a neighbouring town with the help of the DTI and of DTI grants. Does she agree that we must be much more thorough in assessing the impact on neighbouring firms when we put public money into supporting much needed inward investment in the north-west? Does she further agree that it is unacceptable that the taxpayers of Skelmersdale should, ironically, contribute to the removal of jobs from the town?
Mrs. Liddell: I agree with my hon. Friend that it is important to ensure that no displacement occurs as a consequence of regional selective assistance. I am aware of the case to which he refers. I understand that my right hon. Friend the Minister for Trade met the company in October last year. Should the company want to consult the Government office of the north-west about the possibility of further assistance, officials are ready to hold discussions and will do everything that they can to help the company.
Mr. Graham Brady (Altrincham and Sale, West): Does the Minister agree that the Government too can take important decisions? Does she agree that the Synchrotron project in Daresbury has given a massive boost both to business and to the academic community in the area? Does she understand the importance of allocating the Diamond project to Daresbury and that it should not go to Oxfordshire? People throughout the north-west--of all parties--want to see that. When shall we have a decision?
Mrs. Liddell: When I visited Runcorn a few weeks ago, the point about Daresbury was powerfully made to me. I realise the strength of local opinion--not least on the part of my hon. Friends who have fought well for the Synchrotron project. A decision has not yet been made, but it should be made shortly.
Grant Aid
10. Mr. David Kidney (Stafford): If he will make a statement on his Department's policy for giving grant aid to areas of England outside those with assisted area status. [111540]
The Parliamentary Under-Secretary of State for Trade and Industry (Dr. Kim Howells): Under European Commission law, regional state aid can be paid only in assisted areas approved under article 87. It is also possible to grant aid under other provisions. For example, the new enterprise grant areas have been proposed under the small firms guidelines, and SMART--the small firms merit award for research and technology--operates under the research and development guidelines.
Mr. Kidney: I thank my hon. Friend for that answer. The Department closed the partnership investment programme at the end of the year. I was told that the reason was that the EC had decided that gap funding to private sector developers, outside assisted areas and above aid intensity limits, was in breach of state aid rules. That raises the alarming spectre that no state aid, however much it is justified, can be paid outside assisted areas.
Can my hon. Friend assure me that schemes such as those he described can be funded throughout the country when the circumstances are justified?
Dr. Howells: I can certainly confirm that the Government have a comprehensive package of measures to tackle need in the regions effectively. The proposals for new assisted areas are part of that package. The single regeneration budget, in particular, supports a wide range of regeneration schemes run by local partnerships in England to target pockets of deprivation in urban and other areas. I note that Partnership in Staffordshire was awarded substantial funding to promote the regeneration of rural communities. In addition, third tier is a flexible measure to aid regional development and to respond to local economic crises. That will be reviewed after an initial period of 12 months in conjunction with regional partners.
Mr. Richard Page (South-West Hertfordshire): I understand that the Secretary of State for Trade and Industry recently met the Commissioner in charge of assisted area status. Can the Minister possibly give us some idea of the representations that the Secretary of State made and what steps the Department of Trade and Industry will take to make sure that any distribution that comes from the European Union or the Government will be made fairly and equitably and--I look the Minister straight in the eye--on the basis solely of need?
Dr. Howells: I welcome the hon. Gentleman to his new post; it is always good to see him. My right hon. Friend the Secretary of State for Trade and Industry will meet Commissioner Monti this afternoon and will, no doubt, discuss these very matters.
Mr. Richard Burden (Birmingham, Northfield): May I ask my hon. Friend to ask my right hon. Friend the Secretary of State to impress on Commissioner Monti the fact that the issue of state aid to Rover-BMW at Longbridge has been with the Commission for several months? That state aid is of vital importance to retaining strategic production inside the European Union and it is not unreasonable to expect the Commission to come up with a positive decision on that aid by the spring, as has been indicated before.
Dr. Howells: I am absolutely sure that my right hon. Friend the Secretary of State heard those words and that that will be a subject for discussion with Commissioner Monti this afternoon.
Mr. David Heath (Somerton and Frome): Does the Minister recognise that, between the over-hyped and overheated regional shopping centres and the assisted areas, which are quite rightly receiving support, there are small market towns throughout the country that are dying on their feet? Will he target support at that sector? In particular, will he talk to the Department of the Environment, Transport and the Regions about the iniquitous uniform business rate and its effect on small businesses in market towns?
Dr. Howells: I am sure that the hon. Gentleman will himself want to make those points to Ministers in the Department of the Environment, Transport and the
Regions. We recognise very much the difficulties of isolated pockets of deprivation and need throughout the country and we are addressing them in all the proposals that we have for regional regeneration.Steel Industry
12. Mr. Denis MacShane (Rotherham): What assessment he has made of the impact of the strength of sterling on the United Kingdom steel industry. [111543]
The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): The Government are well aware of the concerns of the steel industry in relation to the strength of sterling. However, the steel industry itself has worked hard to improve its competitiveness. Although exports fell in 1999, the prospects for increasing exports in 2000 are much improved, especially in the light of recovery of the south-east Asian market.
Mr. MacShane: I am grateful for that answer, but my right hon. Friend will know the very great fear in the steel communities of the United Kingdom about the loss of jobs as a result of the over-valued pound, which was inherited from the previous Government. Will she--and my right hon. Friend the Secretary of State if he is available--agree to meet a delegation from the steel communities to discuss this very great concern?
Mrs. Liddell: I am very happy to agree to meet representatives of the steel industry. I represent a steel constituency, so I am well aware of the issues. The Government's priority remains to put economic management on a stable, long-term footing by reform of both monetary and fiscal policy. The worst thing that could happen for the steel industry would be to return to the short-term fixes of the previous Government, bringing the boom and bust that so unsettled the industry over the past 20 years.
Mr. Dafydd Wigley (Caernarfon): Does the Minister not accept that in steel plants, such as Llanwern and Ebbw Vale, there is great concern that the high value of the pound will undermine their on-going viability? Will she give a categoric assurance that her Department will take up with the Chancellor of the Exchequer, in the context of the forthcoming Budget, the question of getting a fair parity for the pound that will give some chance for the plants that I mentioned? Their closure would be an absolute disaster for those areas.
Mrs. Liddell: Hon. Friends who represent those constituencies have made representations about the steel industry in that area. Approaches to Corus have revealed that speculation about Llanwern is based on press speculation. It would be unfortunate--and I am sure the right hon. Gentleman would not seek to do it--to spread fear in those communities about the possibility of further unemployment.
My right hon. Friend the Chancellor is well aware of the need to ensure a stable economy in the United Kingdom. We now have one of the strongest economies in the world. What we must seek to do is to ensure that all our industries benefit from the competitive advantage that can be brought about by increases in productivity and increases in output across the board for those industries.
My right hon. Friend's main priority will be to ensure a stable economy and a stable exchange rate in the medium and long term.
Mrs. Angela Browning (Tiverton and Honiton):
The pound is strong against the undervalued euro, but we do not see such discrepancies so much in terms of the pound's valuation against the American dollar. Given that the right hon. Lady and her friends are proponents of scrapping the pound and taking us into the euro, what in her view is the optimum exchange rate between the pound and the euro?
Mrs. Liddell:
I am sure the hon. Lady knows rather more about how exchange rates work than her question appears to suggest. The Government believe that the decision about the single currency and sterling should be based on the best economic performance of this country, not on some arbitrary date that seems to have been dreamt up by the hon. Lady and her friends to try to heal divisions within the Conservative party. The main priority on the Government Benches is to have a sound economy whereby competitive businesses can ensure further growth, not just in Europe, but in competing against other economies such as the United States and Japan.
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