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12.9 am

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes): I congratulate my hon. Friend the Member for Bassetlaw (Mr. Ashton) on securing the time for this important debate. He has set out clearly and with great feeling--as I would expect of him--the issues

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that affect and have an impact on people in his constituency and, more generally, in north Nottinghamshire and the wider region.

I agree with him that it has been disappointing to see the level of job losses and factory closures in Bassetlaw and the neighbouring area, especially over the past few months. Certainly, the Government recognise that the north Nottinghamshire area is going through some fundamental changes. As my hon. Friend said, some recent changes have had a considerable impact on the local people.

The role of the Government in addressing such issues is threefold. First, the success or failure of an area and the activities in it are dependent on conditions in the economy as a whole. I hope that my hon. Friends will agree that we have worked hard to try to ensure that the economy is stable, and that, in turn, has enabled investment to be made in all our regions.

Secondly, we need to address the imbalances that exist in people's lives and opportunities--not only between regions, but within them. It is because we recognise those imbalances and because we want to bring those who are most disadvantaged up to the level of the best that we have introduced a strong regional economic development policy through the work of the regional development agencies. I know that is very important for the development of the east midlands.

Thirdly, in some instances, the Government can take specific action locally, as well as regionally and nationally, to respond to particular and sometimes critical circumstances, such as those described by my hon. Friend. Regeneration, unemployment and so on have to be addressed nationally, regionally and locally. I shall touch on those aspects, while also trying to address some of the points raised by my hon. Friend.

The message given by my right hon. Friend the Secretary of State for Trade and Industry to the Birmingham chamber of commerce in August this year emphasised that the Government have an industrial policy based on three clear principles. First, we are trying to put in place the building blocks for the future--to enable industries to obtain the skills they need in their work force and to access the new knowledge bases that they need; and to ensure that they have the necessary communications infrastructure so as to create a strong enterprise culture in Britain.

Secondly, we are creating a modern regulatory framework that helps innovation and encourages growth and increased productivity. Modern economies are complex. Governments take a huge range of decisions that have an impact on industrial success. Our role is to ensure that sustainable wealth creation and business growth are at the heart of those decisions in Britain.

Thirdly, we are trying to provide world-class, forward-looking business support for businesses to expand at home and overseas--helping manufacturing and services. We are promoting innovation and providing opportunities for emerging industries and markets.

The core of that strategy is that we are trying to help industry and businesses to look to the future as the only way of ensuring sustained growth and employment. However, as a Government, we also have to consider the present. My hon. Friend is quite right to direct our focus on events currently occurring in his area. As industries restructure and the economy changes, some industries are facing traumatic change.

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It is important to point out that we are not in the business of stopping change in industries that need to modernise. Propping up old ways of working and inefficient processes is not the way forward. However, we also need to help established industries in the regions to modernise and compete in new markets. We are trying to support people and communities through what are sometimes difficult periods of change.

We are investing in training and skills to ensure that those affected by such changes can find new, quality jobs. We are trying to encourage enterprise--to support new firms that have the potential to grow. We are stepping up our work on attracting new investment in growth industries, as well as helping companies in the supply chain to innovate and to adapt.

Cash injection can only ever be a partial solution, although it has a limited application. There have been some cash injections locally, to which I shall refer. However, we also need new instruments focused on giving companies the knowledge and capabilities that they need to succeed.

My hon. Friend laid great stress on what he felt was the impact of the potential for companies to move businesses--and therefore take jobs away--from this country to other parts of Europe and indeed the world, and he is right to identify the fact that there are global challenges to many of the businesses that are in this country. We have a very limited remit in respect of some of those challenges, as Government can have only a limited impact on the potential for companies to respond to opportunities elsewhere in the world. We are not unmindful of the issue, but the potential that we have, either alone or through Europe, to create what my hon. Friend called a level playing field is quite limited. However, I do recognise that those are real issues that companies in his area and elsewhere are facing.

Mr. Alan Meale (Mansfield): I understand what my hon. Friend is saying, but obviously there are instances in which the Government can act--for instance, as my hon. Friend the Member for Bassetlaw (Mr. Ashton) intimated, regarding Czechoslovakia. That country is making an application to join the European Union and is basically giving away large sites, pre-built, for companies to move from western Europe before it enters the European Union, at costs with which, clearly, we cannot compete.

Secondly, we have policy in relation to the Department of Trade and Industry, which is paying, and has paid, huge sums of money to multinational companies to come to coal mining areas such as north Nottinghamshire. In the instance of Johnson Control, £1.7 million was given to that company, and at the same time was refused to local companies that wanted to expand. Companies come in, make a fast buck and then sell out on to the open market and move overseas and make money there. Obviously that is not a sensible policy in terms of countries that want to join the European Union, over which we have control in terms of the directives that we can oppose. We could also say that we will not be any part of the Treasury policy in future.

Mr. Hughes: I take the points that my hon. Friend makes. I would simply put it to him that we cannot make

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such changes in European regulations and directives unilaterally. Such changes have to be made through processes at European level, and there are wider issues. This is a difficult thing for my hon. Friends to hear, and I understand that, but there are wider issues pertaining to the reasons why we want, and are encouraging, certain countries to join the European Union. I understand what my hon. Friend is saying about the way that he feels--that some of those countries are using their pre-entry position to entice businesses, but that is something that, in terms of our own internal national policy, is very difficult for us to regulate.

Mr. Meale: I understand where my hon. Friend is coming from, but there is a difficulty. We can influence directives. We can oppose them at the Council of Ministers. Clearly Britain is being affected prior to these countries' application. The textile industry in Britain is being riven by companies moving from this country abroad. The car industry and the glass industry are similarly losing out to Czechoslovakia. We can say through the Council of Ministers that we are sorry but we object to these directive concessions.

Mr. Hughes: Well, we can, and we could in theory, but that raises some fundamental issues that must be dealt with across government. It is not simply a DETR question; it is not simply a DTI question. My hon. Friend is raising--I understand why, and he is right to do so--very fundamental questions, which would have to be decided at the heart of government and at the highest level. I am afraid that, as he knows, I am not in a position to give him a response on that here tonight, but I will ensure that the views that he has expressed on these issues will be heard and will go to the relevant Departments.

I wanted to touch on what the Government are trying to do to assist at the regional level and to tackle imbalances between regions. All my hon. Friends will be aware of the work being done by the East Midlands development agency, with which they have all had contact. It is trying to deal with some of the problems that they have raised tonight.

As a result of this year's comprehensive spending review, Government support for the regional development agencies will increase from £1.2 billion a year now to £1.7 billion in 2004. Clearly, some of those resources will go to the east midlands to try to tackle some of the issues that have been raised.

Mr. Barnes: The problem is that many areas face immediate difficulties that will not be dealt with by developments that will make changes in the future. Emergency action needs to be taken in certain areas. At the Labour party conference, my right hon. Friend the Secretary of State for Trade and Industry said that

In the case of a viable firm, such as Biwater in Clay Cross, reference should surely be made to the Competition Commission, because it has the right to say that certain

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moves are hitting exports, creating unemployment and distorting industry in various areas. Therefore, action can be taken to stop such moves. Such action is required.

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