Regional Development Programme United Kingdom 1978-1980
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COMMISSION OF THE EUROPEAN COMMUNITIES REGIONAL POLICY SERIES — 1978 10 COMMISSION OF THE EUROPEAN COMMUNITIES Regional development programme United Kingdom 1978-1980 COLLECTION PROGRAMMES Regional Policy Series No 10 Brussels, April 1978 This publication is also available in DE ISBN 92-825-0490-5 FR ISBN 92-825-0492-1 A bibliographical slip can be found at the end of this volume. © Copyright ECSC-EEC-EAEC, Brussels-Luxembourg, 1978 Printed in Belgium The articles and texts appearing in this publication may be freely reproduced either wholly or in part provided reference is made to their origin. ISBN 92-825-0491-3 Catalogue number : CB-NS-78-OlO-EN-C Contents 1. Introduction 5 2. Economic and social analysis 7 3. Development objectives 9 4. Measures for development 11 5. Financial resources 17 6. Implementing the programme 19 7. The situation in the individual Assisted Areas 21 (a) England - North 21 (b) England " Yorkshire and Humberside 26 (c) England - East Midlands 29 '(d) England - South-West 31 (e) England - West Midlands . 34 (f) England - North-West 35 (g) Scotland 39 (h) Wales 45 (i) Northern Ireland 52 ANNEXES Annex 1 — The Assisted Areas (with maps) 59 Annex 2 — Assistance for industry and tourism 63 Annex 3 — Infrastructure authorities and programmes 69 Annex 4 — Employment forecasts 75 Annex 5 — Statistics 77 Annex 6 — Additional information provided in September/October 1978 at the request of the Commission, amplifying the infor• mation contained in the regional development programme . 107 Note The term Great Britain denotes the United Kingdom without Northern Ireland which is treated separately for certain purposes. For ease of expression the term 'Assisted Areas' is used, unless the contrary is apparent from the context, to refer to Northern Ireland as well as the relevant parts of Great Britain to which, strictly, the term belongs. 1. Introduction 1.1. The United Kingdom offers a wide ation. The inner areas of some of the major range of incentives for the economic devel• cities exhibit some of the worst symptoms of opment of the Assisted Areas ; these include social and economic decline. The Assisted financial assistance to new or expanding in• Areas also include extensive rural areas, dustry and services, the provision of infra• often with small urban communities (for in• structure to a standard which makes these stance parts of Scotland, Wales and Northern Areas attractive to industrialists and their England) which have economic and em• employees and help with training costs.These ployment problems which are comparatively are complemented by a control on new in• small in overall scale, but relatively severe in dustrial building in the Intermediate and their effects and often difficult to mitigate. non-Assisted Areas. Regional development in the UK is therefore concerned primarily with the attraction of 1.2. The Assisted Areas (shown in the map new, modern industry into the traditional in Annex 1 — page 60) include large urban industrial areas, but the industrialization of areas which expanded in conjunction with the some rural areas is also important. The development of industry during the nine• building of ' New Towns ' has provided focal teenth century and both the urban areas and points for new development at a number of industry now need renewal and moderniz• places within the Assisted Areas. 2. Economie and social analysis The regional problem industries from investing there. Moreover, industries which originally set up business 2.1. The United Kingdom's regional pro• outside the Assisted Areas have usually pre• blem stems primarily from the decline of ferred to expand at, or near, their existing employment in the traditional industries — sites rather than to divide their operations coal, steel, shipbuilding, textiles and agricul• and set up new units in a different area. ture, the reasons for this decline varying from one industry to another. These industries 2.4. As a result of this long-term decline in tend to be concentrated in certain areas and traditional industries and the shortage of new when they contract the effect on surrounding employment-creating investment, there has areas is disproportionately serious. The been a large excess of labour in relation to decline has also had its effect on local sup• demand in the Assisted Areas. This has plying industries and to a lesser extent on been reflected in persistently higher rates of services. The growth of the services sector unemployment in the Assisted Areas than in in the country as a whole has absorbed much the country as a whole, levels of GDP per of the decline in employment in manufactur• capita below the national average and a ten• ing industry, but this growth has not been on dency for net migration to take place from the same scale in the Assisted Areas as else• the Assisted to non-Assisted Areas. Aver• where. age unemployment rates in the Development Areas and Special Development Areas have 2.2. In 1965,42.4% of all employment was typically been IV2-2 times the national in the main Assisted Areas (Northern Ire• average in recent years. In the case of land, Scotland, Wales and the Northern, Northern Ireland unemployment was 4 times North-West and Yorkshire and Humberside the national average in the 1960s and 2V2 regions of England) ; between 1965 and 1975 times the average in the early 1970s. GDP employment in the United Kingdom fell by per capita has tended to be at least 10% (in 373 000, of which a disproportionate share the case of Northern Ireland over 20%) be• (300 000 jobs) was in those Areas. The low the national average. industries showing the greatest contraction in the main Assisted Areas were coalmining 2.5. In addition to this general regional (207 000 jobs lost), textiles and clothing problem many of the inner areas of the major (221 000) and metal manufacture (91 000). cities, both within the Assisted Areas and elsewhere, suffer in a marked way from eco• 2.3. The Government would like to see nomic decline, physical decay and adverse these job losses made good by new employ• social conditions. Similar problems are also ment-creating industries, but dereliction and found in many of the older towns. The old• poor amenities in the Assisted Areas have er urban areas have long had more than the deterred potential investors. Inadequate national proportions of unskilled and semi• communications and in some cases remo• skilled workers, the groups among whom un• teness from the main centres of population employment is highest. These areas have have also discouraged newer consumer goods suffered particularly from the lack of suffi- cient investment in new manufacturing in• ting jobs in the Assisted Areas. Since 1945 dustry to provide suitable jobs to replace the provision of most infrastructure has be• those lost through the decline of the tradi• come a public responsibility, but has been tional industries. organized, according to the type of infra• structure, on a national or regional basis. Past corrective actions 2.9. It is estimated that the operation of 2.6. Recognition of the existence of a re• regional policy throughout the 1960s was gional problem and the first measures to deal responsible for raising employment in the with it go back more than 40 years. In the Development Areas in 1970 by about post-war period, the main direct contribution 300 000 above what it would otherwise have to industrial development has been through been. the provision of financial incentives for the establishment of manufacturing industry in Development needs and prospects the Assisted Areas. For a long time the 2.10. In the immediate future there is likely principal incentive has been a capital grant to be only a slow decline from the prevailing which is available as a percentage of specified high levels of unemployment and a relatively types of investment expenditure. The sec• ond most important incentive, in terms of slow increase in manufacturing investment. total expenditure, was the Regional Em• Even when the recession has passed, unem• ployment Premium, paid in the period 1966- ployment rates may remain significantly 77 to employers in manufacturing industry, higher than has been usual in recent years. who could claim the Premium in respect of Unemployment levels in each of the regions each employee at an establishment in the of the United Kingdom will obviously de• Development or Special Development pend on the fortunes óf the industries esta• Areas. Its value was eroded by inflation blished there: some areas may be badly af• and doubt arose whether it was effective in fected by shipbuilding redundancies, others achieving its original purpose of generating by a decrease of manpower in the steel, tex• and maintaining employment in the qualify• tile and clothing industries. Some localities ing areas. It was accordingly withdrawn depend almost entirely on one or other of (except in Northern Ireland) in January 1977 these and may face severe unemployment as part of a progressive move towards a more problems. selective attitude towards assistance for in• 2.11. Economic growth, at a significantly dustry. Other measures have included Re• faster rate than seems likely at present, will gional Selective Financial Assistance, now be needed to create new jobs to replace those the second most important incentive, and the lost. Employment in service industries is provision of factory space at current market likely to continue to increase, although not as value rents, with important rent concessions quickly as in the past. The recent decline in in the initial years. employment in manufacturing industry and the present under-utilization of existing ca• 2.7. These measures have been comple• pacity suggests that this sector is not likely to mented by the Industrial Development Cer• be a significant source of additional employ• tificate System, which enables the Govern• ment in the Assisted Areas in the near future.