28 AUGUST 1971, Page 5


In the debate on Britain's entry into the EEC one aspect, which was hardly mentioned a month or so ago, has become a key issue — regional policies have emerged as a serious bone of contention. Cynics may say that the many MPs from Scotland, Wales and the North wanted a peg with which to get off the EEC hook and now they have found one. What better base upon which to fight a rearguard action against entry than the defence of one's constituency interests? However, the issue of the Regions goes far deeper than that. I expressed very serious concern about this problem, especially to George Thomson, when I was still supporting Britain's entry and was a heavily involved member of the UK's delegation to the Council of Europe and Western European Union.

At present regional policy does not exist in a community form in the EEC. The Commission is only at the earliest stages of formulating such a policy. On July 21 Harold Wilson asked a series of very detailed questions about the future of our regional policies after entry. They were highly pertinent questions, asking, for example, whether Mers,eyside and the NorthEast would be excluded from future regional preference schemes as a consequence of the discussions in Brussels. He is still waiting for the answers. The Secretary of State for Industry and Trade told the House the following day that a "critical issue . . . would clearly be the definition of what were regarded as the central areas in Great Britain. This is entirely to play for and discuss." Whether Merseyside, the North-East and the SouthWest are to be excluded from the bulk of regional aid in future seems to some of us to be vitally important — especially so since it will be decided primarily by the Commission in Brussels, not by the British government. Roy Jenkins, who has had a lot to say on regional policies these last few weeks, having rightly attacked the Government's flimsy references to regional policies in the White Paper, then went on to assert that the "tools of regional policy" were much less important than the " results they produce."

Let us look then at the results. In 1969 the Commission of the European Communities issued a major report on regional Policy covering the period 1958-1968. The report was, in effect, a confession of failure, and some quotations from it are well worth recording, especially since many proMarketeers are now making over-optimistic counter claims about regional success stories based on misleading statistics. The Commission states (on Page 143) that "in the Community as a Whole, the lowest rate of population increase was found especially in the regions experiencing industrial decline." They state that "Italy, Belgium and France . . . suggest that regional concentration is still increasing. The densely populated regions (NW Italy, Brussels region, Paris region) are still growing faster than the national average (page 154). As far as Italy is concerned, the Commission states (on pages 175 and 176) that "the area with the strongest economy, namely the North West, recorded the highest economic growth. The South, on the other hand, lagged somewhat behind the national average." At least I give Roy Jenkins credit for a more basic grasp of the problem than many EEC supporters when he admitted in the House on July 22 that as far as regional disparities were concerned the "indications are not overwhelmingly clear and we must try to look at these matters objectively."

I spent a major part of the years 19671970 moving around the ' periphery ' of the EEC and made detailed observations of regional policies there. Holland is the only Community member with a regional spread of income less than that of Britain. The others all show grave regional disparities, especially France and Italy. The declining areas of eastern Belgium seem to have a relatively poor future and many local politicians tend to see large-scale emigration as the most likely solution. Even though restrictions have been imposed on industrial and commercial building in the Paris area, the fact remains that the centripetal pull of Paris has been a stronger influence than regional disincentive solutions. Many French politicians and industrialists will also admit that it has been necessary to relax the policy of devolution and restraint simply because Paris is seen as a natural growth area for the EEC economy and French national interests demand the opportunist exploitation of this fact. In Italy most industry setting up in the South receives important tax exemptions, but when all are added together, these aids still do not compare favourably with the vastly greater assistance given to the British development areas in recent years. Yet our regional disparities were much less than those in Italy and our aid programme was developed in a period of very sluggish national economic growth.

There is a general tendency for manpower to be pulled in towards the centre — along the industrial backbone of the Rhine and the Rhone. It is no use apologists for the EEC turning a blind eye to the obvious fact that increasing competition arising from a freer flow of capital and labour within the Six and all the greater external economies nearer to the main consumer and other market centres, are crucial and decisive. Of course, this would have occurred even without the EEC (we in the UK know the gravitational pull of London), but the creation of the EEC has tended to accelerate the process. John Davies calls these points logistical arguments' and though 'powerful ' he thinks they are being over-stressed. Those of us who live and work in the northern periphery of the UK can hardly be expected to Write off these points very lightly. The opening up to massive expansion of the Channel ports and the pull of the Midlands and South-East of England seems to me to be the likeliest short-term effect of our EEC entry.

After 1969 the European Commission issued some further proposals to deal with growing regional problems. They were very modest ones and did not amount to much more than the establishment of a permanent committee and the receipt of annual reports. To date these policies have not been successful. Current discussions in the Commission now seem to centre far mofe on blocking regional incentive schemes than on encouraging them. They are very much concerned. With putting an end to ' out-bidding ' in respect of regional aid schemes and they object to the effect this is having on ' propei.' competition in trade.' The ethOs of .thd EEC tends to be the principle of the Competitive capitalistic society. Some of us think that regional policies require public' planning techniques, coupled with a fair sense of social justice. After spending three years around the EEC (involving fifty visits) I just do not get the sense of that type of society developing there. It is in this contekt that future regional policies have to be assessed. It is not surprising that the bulk of Labour MPs from Wales, Scotland and the North are now dropping off into the anti-Market side of the fence.

Even if the Conservative patty can do without the Regions (which I doubt), the Labour party certainly cannot. There is nothing parochial about these views now being expressed. Unlike the EEC nations, half of ours is in a development area (and a major part of Labour's supporters live in these areas). It is the geographically uneven nature of development after entry which is most worrying.

The time to negotiate regional terms of entry is now. After we go in, it could be far too late. Unless such reassurances are forthcoming before October, a lot of us who voted in 1967 for negotiations to commence will be in the opposite camp when the crucial divisions take place.