Geography Reference
In-Depth Information
called Development Areas rather than the old Special Areas. The
programmes became more complex over time, with one addition being a subsidy
to employment, the Regional Employment Premium (1967), and another being
the definition of Special Development Areas (1967): those with acute
employment problems, which were given extra financial aid. Intermediate Areas
(1970) were also designated, based on their having characteristics such as poor
physical infrastructure and high out-migration as well as moderately high
unemployment.
The above account is an outline of what is usually discussed as regional policy
in Britain. This account misses a large, probably more significant segment of
policy affecting the regions where much larger amounts of capital were invested
over the years than in direct regional policy. This was through state ownership of
some of the heavy industries dating to the first two Kondratiev cycles. In the
period from 1945 to 1950, several of these industries were taken over by the state
through the Labour government of the time. They included iron and steel
(nationalized briefly from 1949, then again from 1967), coalmining from 1947,
gas from 1949, electricity from 1948 (in Scotland from 1943), and the major
transport systems, including railways, from 1947, as well as a variety of other
industries.
It is important to note how these nationalizations, and the subsequent support
given to the respective industries, formed a regional policy. It is precisely
because they were industries located in the north and west, in association with
coalfields, and industries from the first two Kondratiev waves, that a regional
pattern of support emerges. Thus nationalization of coalmining, for example,
became very much a support system for the coalfield regions of South Wales,
Yorkshire and Lancashire, the Scottish lowlands, and the Northumberland and
Durham region. Government policy was to maintain the coal pits open for as
long as possible, through subsidy, and to find markets for the coal in the power-
stations which were also government owned. Iron, steel and heavy engineering,
the “commanding heights of the economy”, which prevailing socialist thought
regarded as necessary to come under government tutelage, were also the subject
of massive subsidy and support through the provision of a protected market, in
maintenance of the nationalized railway stock and track, or in the building of
ships for the Royal Navy. These industries began to be denationalized or
privatized in the 1980s, in a process that continued up to 1996.
A case may be made that the huge efforts made to retain these industries were
in fact a waste of national government budgets. Coal was found to be
uneconomic to mine in Britain, compared with imported products and alternative
power sources. Heavy engineering could not meet the competition of many
foreign countries, including some that supported their own industries in the Far
East and in Latin America, while enjoying lower labour and material costs. All
these industries were apparently ones that Britain would have needed to leave in
the face of international competition. There is a comparison that can be made
here with some LDCS, such as those in most of Latin America, which have
