Government+regional+Policies


 * Regional Policy **

**Definition**: Policies to specifically aid a particular region(s) of a country due to that region under-performing in terms of income and unemployment The need for regional development arises because of wide differences in the levels of economic activity that exist across the country.These differences in economic activity lead to different levels of unemployment, economic growth and incomes. The government believes it has a role in levelling out these differences. In the Uk there is a wide divide between the North and South of the country. Not only does this mean that the South is richer, but the South of the country also suffers as the greater concentration of people attracted by higher incomes and more jobs, leads to higher costs of living and congestion in regions such as London.


 * Main tools of regional policy. **

 Funded by both Europe and central government the regional development agencies (RDAs) have a role in encouraging new business to their region and in developing existing businesses. In the past the priority has been given to attracting big name multinationals, that bring with them 1,000's of jobs. And there is no doubt that the UK has been extremely successful in gaining a large share of the inward investment that has come into Europe. Regional Development agencies, have been able to offer grant packages worth £10m's, to the largest inward investors. These packages have included:
 * Regional Development Agencies.
 * tax incentives
 * training
 * ready built factories
 * discounted land.
 * Improving infrastructure in regions.

[|EU Regional Policy video]

__**Improving Infrastructure: **__ Governments can spend money on road and rail networks that will then attract businesses into the area. [|HS2 is a good example of this in the UK] <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Schools hospitals and other government expenditure projects can also be used to attract industries to socially deprived areas.

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">This creates jobs and due to lower cost of living may actually save the government money. [|Here is an example where large parts of the BBC were moved out of London]although it is not without criticism.
 * __<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px; line-height: 1.5;">Moving Nationalised industries and other government services out of the capital and into areas of high unemployment. __**

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Governments can also restrict development in areas where there is congestion and where there is low unemployment. This can be done by not giving permission for new factories to be built. This further encourages firms to relocate to areas of high unemployment.

__**<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">problems with regional policies: **__
 * <span style="font-family: Trebuchet MS,Helvetica,sans-serif;"> They are expensive and the money could have been used elsewhere- taxes may have to be increased to pay for them.
 * <span style="font-family: Trebuchet MS,Helvetica,sans-serif;"> The firms that benefit from loans and grants may leave the areas in the long term if grants are stopped or reduced. their is no long term commitment to the area.
 * <span style="font-family: Trebuchet MS,Helvetica,sans-serif;"> Regional policies take time to take effect. they will not solve problem of high unemployment in the short term.
 * <span style="font-family: Trebuchet MS,Helvetica,sans-serif;"> They may not make a big enough difference.