Government targets South in revised 'assisted areas' map: Anger as leaks reveal that Scotland, Wales and the North will lose out in policy switch

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THE GOVERNMENT wants to give financial aid to parts of the South-east and the south coast of England, at the expense of the North, Scotland and South Wales.

Wayne David, MEP for South Wales, claimed yesterday that leaks from EC officials showed that when it is published shortly, the Government's revised 'assisted areas' map will reveal a major shift in regional aid policy, towards the South.

He accused the Government of making a cynical gesture to boost flagging political fortunes. 'I don't think the trend is unrelated to government concern about losing its grip in the South,' he said.

Mr David claimed that EC officials who have to approve the changes had indicated that among the areas receiving Government cash for the first time will be the south coast towns of Hastings, Dover, Folkestone and Torbay. The Isle of Wight and Clacton in Essex will also benefit.

Southend, which was included in the Government's original proposal, has been dropped - which will not please the resort's MP, the Tory Euro- rebel Sir Teddy Taylor.

Other major changes are expected to reflect cuts in the defence and coal industries, with towns like Mansfield, Pontefract and Fishguard among the winners. Whitehaven, which has been hit by job losses at nearby Sellafield, may also gain.

Under the assisted area scheme, the Government will provide grants for companies opening new factories and job-creation initiatives. The scheme usually only applies to recognised 'travel to work' areas with London counting as one area. However, officials at the Department of Trade and Industry are thought to have persuaded Karel Van Miert, the EC Competition Commissioner, to allow them to 'break up areas' for the first time. After protracted discussions, EC officials are thought to have agreed the revisions on Thursday. The new-look map is likely to be announced by Tim Sainsbury, Minister for Industry, next week.

If Mr David's leaked information is correct - and DTI officials had no comment to make - the changes will cause outrage in the North, Scotland and Wales. Deulwyn Morgan, chief executive of Ceredigion District Council, which embraces two losers in the list, Cardigan and Lampeter and Aberaeron, said he was appalled. 'It means we will lose assistance for companies wishing to set up in our travel-to-work area. If a company director is looking to open a new factory, where will he go? To south-east England, which is close to the Common Market, or to west Wales, 200 miles away?'

Mr Morgan said the area had deep- seated economic problems caused by a long-term decline in agriculture and a migration of labour, which 'cannot be compared with those of south-east England'.

Alan Milburn, Labour MP for Darlington, another loser, said it had received pounds 4m in regional aid since 1984. It was madness for the Government to cease helping the town while 'the North-east is reeling from the effects of deep recession'.

If unemployment was the sole criterion for inclusion, Mr David said, then Hastings, which has seen its jobless total fall from 13 to 8.4 per cent this year, and the Isle of Wight, down from 12 to 8.9 per cent, should not appear. He claimed: 'Regional unemployment statistics show clearly that the South and South-east, particularly some coastal towns now targeted for assistance, are pulling out of recession quicker than the rest of the country.'