§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Kaberry.]
§ 4.8 p.m.
§ Mr. Malcolm MacPherson (Stirling and Falkirk Burghs)
The subject I wish to raise is the situation in the light castings 2596 industry, particularly in relation to the area which I represent, Falkirk and Bonnybridge and thereabouts. The background of the industry in other parts of the country I cannot touch upon because there is a limit to what one can do in a short debate on the Adjournment.
I am grateful to the Parliamentary Secretary that the Minister of Labour is here today, because I know the question involves not merely his Ministry but several other Ministries, and that he will have to reply on behalf of Ministries which are not his own. I will treat the subject entirely as an industrial difficulty, but there are, as the hon. Gentleman will realise, political cross-currents running in it. In the confines of this short debate it is not possible to go into them.
There are, roughly speaking, a couple of dozen foundries in the district, employing, I am told, about 12,000 workers directly, while a large number of other workers are indirectly dependent upon them. The work of the foundries depends to a very large extent on skilled labour, and an extraordinarily wide variety of goods is produced. They are nearly all consumer goods. My area has not very much to do with heavy castings. Even those destined for engineering are of a light nature.
Perhaps "consumer goods" is a phrase which is not quite applicable to manhole covers and things of that kind, but in general the goods produced are not of a capital nature. They tend to be 2597 cookers, baths and parts required for house building—though some of those, of course, are of a capital nature—and in the main they are things which one buys for domestic use rather than for capital investment.
The situation in the industry is peculiar to itself. Its case is not like that of industry in the rest of Scotland. The Parliamentary Secretary to the Ministry of Labour, replying to a recent debate on Scottish unemployment, was able to say that the figures had improved in March, and that the figures for April would show a further improvement. As the hon. Gentleman knows, the trend in the light castings industry is exactly the reverse. I asked a Question of the Minister of Labour on 21st April. I shall not quote the figures in detail, but the figures of totally unemployed on the register on dates towards the middle of each of the last six months approximately show the situation. The numbers on the Falkirk register alone were—October. 850; November, 850; December, 1,000; January, 1,200; February, 1,300 and March, 1,600.
These figures do not give anything like a full picture of what is happening. They do not include short-time workers and they conceal a certain amount of under-working. There is unemployment, that is people actually made redundant, there is short-time working—four days instead of five a week—and, beyond that, there is the matter of not doing a full day's work. One worker who was affected told me quite bluntly that the men were doing three days' work in four days. There is no possibility of a piece-worker going all out to earn as much as he can. The industry is running very much at a low ebb.
It is no exaggeration to say that there are slump conditions in Falkirk and that if it were not for the strong human argument in favour of spreading redundancy and, instead of dismissing men altogether, reducing the number of working days a week or the number of working hours a day, there would be a very large number of unemployed. There is more than one cause for this situation. It is said by many in the area that it all began with the import restrictions imposed on our goods by various countries to which we were exporting. I would not quarrel with that statement. Certainly the pro- 2598 ducts of this industry have gone in the past to a very large number of foreign countries.
The industry was particularly hit by Canadian and Australian import restrictions. Despite the recent modification of those restrictions there has not been an improvement, because as well as Australia and Canada there are a number of other countries, both inside and outside the Commonwealth, involved in the industry's export trade. The industry was accustomed to export a wide range of products, varying from the old-fashioned stoves which are now used only in very old houses to the most modern of highly luxurious baths, which went to countries where wealthy people still live the lives of potentates.
There is a considerable decline in home demand. I will not attempt to go into the economics of that matter, but it affects domestic articles like fireplaces. There has been a sudden and considerable drop in demand for the slow combustion type of fire. The problem, however, also affects light engineering products. Besides these changes in demand, we have long-term factors which look as if they will exist for some considerable time.
Machine moulding, which was introduced in recent years, is beginning to have a long-term effect. There has been a change in the numbers of fireplaces that local authorities introduce into new houses. A change from a fireplace in each of three bedrooms—that is 21 castings —to a fireplace in one bedroom—that is seven castings—makes a great difference to the amount of work that is going into the Falkirk foundries.
There are a number of competing materials. Steel is beginning to compete in the manufacture of walls for cookers. Asbestos cement competes in the manufacture of rainwater goods, such as gutters and piping on houses. Instead of fireplaces surrounded by cast iron, which does not always look attractive, people prefer to have tiled surrounds, and there is also competition from extruded metals and so on.
The main cause of the slump—I think one can correctly use that word—is definitely not a seasonal depression. Certainly the seasonal element is there; presumably there will be an increase in demand towards the end of the summer, 2599 but that will not by any means meet the situation fully. The import restrictions in other countries will not change, and we have the long-term changes which are not affected by the seasons. There is increasing competition not merely in the export markets but even in our own domestic market.
What are we going to do about all this? The Government should, so far as possible, continue to press in the case of the export markets, but one cannot hope for too much in that direction because obviously the decisions are made not by our Government but by the Governments in other countries. I have been in communication with the Secretary for Overseas Trade on several occasions, and I have found him most helpful. I suggest that the Parliamentary Secretary to the Ministry of Labour should ask the Secretary for Overseas Trade to encourage the export of some of the luxuries which we still produce, such as the admirable baths which might be exported in larger numbers.
As for the competing materials, I ask the Parliamentary Secretary to request his colleagues to consider them individually. I doubt whether, in the long run, steel is better than cast iron in the manufacture of housing products. I doubt whether asbestos cement can stand up to the low maintenance costs of cast iron when used for gutters. I am told that pressed steel is not as good as cast iron for the sides of cookers; I do not know whether that is so, but one would like the people concerned with housing to consider these matters and give cast iron a fair deal. There are said to be 4 million or 5 million homes in the country without baths. Obviously, we should encourage the installation of baths in those houses.
A few months ago the Ridley Report stressed very strongly the advantages of an improved modern type of solid fuel burning appliance, but only a couple of weeks ago the Parliamentary Secretary to the Ministry of Fuel and Power was deploring the very low demand for these appliances. That is something which might also very well be encouraged, not merely from the point of view of this industry but the national economy, particularly in the use of fuel.
2600 The hon. Gentleman and his colleagues will have noticed the interest that has been taken in the Stockton experiment, and one or two others of a similar kind, of reconditioning houses which are old but still substantial and likely to last for, say, 30 years. There is one at Stockton, one at Croydon, one at Letchworth and a fourth in the Northern Division of the Coal Board. The legislation which makes them possible and allows for possible lines of action on the part of local authorities and individuals are the two Housing Acts of 1949—one for Scotland and the other for England and Wales.
I suggest that these experiments are well worth following up. The "Economist" contained an article on the subject a few days ago. It put the point very clearly. We can build new houses in large numbers, and we also have some very good slum clearance schemes, but what about the houses which are old but are still solid and nothing like slums? There are millions of them. It would be an immense boon if we had a really substantial programme to improve them by putting in baths and proper fuel appliances with hot water and that kind of thing.
I suggest that this is a suitable time to begin such a programme, because the new houses are now beginning to demand rents which are none too attractive to many people. One does not want people to be continually without a prospect of having ordinary and simple things such as hot water, baths, etc. By persuading his colleagues to follow a programme of this sort the hon. Gentleman would greatly help to arrest the decay of these extremely useful and valuable houses. The two Housing Acts do not require any amendment in order to enable a programme of this sort to be commenced.
I am not an expert on this matter, but I understand that the necessary encouragement can be given without changing the Acts themselves. If that were not so I could not put forward the argument in this debate. Local authorities, which have in many cases been a little inclined to lag in these matters, should be encouraged to go ahead and follow the lines of the Stockton and Croydon experiments.
There are also some things which the industry can do to improve the position. 2601 Although the industry has had black marks against it in recent years it has also had a number of good marks. In my own area there has been a very considerable provision of modern amenities, such as baths, in the foundries. We also have an extremely interesting and admirable training system. Moulding is not a job which attracts young recruits easily, but so far the scheme has been most successful. There is a good deal of readiness to meet modern requirements, but a lead from the Government would be a very great help.
I want to stress one point in relation to the future of the industry. I do not think it is the kind of industry about which one need feel gloomy in the long run. It is going through a severe crisis just now, but it produces essentially utilitarian goods—useful and sensible products—and the potential market is extremely wide. It includes not merely our own four million or five million houses without baths but the whole range of housing and similar equipment in other countries. In the long run this industry, which has in the past been flexible enough to overcome crises, should be able to overcome the present one. That is a matter of time, however, and I believe that the situation is so serious just now that Government action is needed. I would finally like to put it to the hon. Gentleman that he might perhaps consider what I have said and indicate what the Government have in mind for this industry.
§ 4.25 p.m.
§ The Parliamentary Secretary to the Ministry of Labour (Mr. Harold Watkinson)
I think I should start by thanking the hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) for putting his case so factually, so carefully and so well, and for avoiding any party political controversy on a matter which, as he rightly says, is not a party political one. It is a very serious problem, and his constituency will certainly feel that he is doing his duty on their behalf in raising it in this House in such an able and fair manner.
The hon. Gentleman said that I would be replying not only on behalf of the Ministry of Labour but for other Ministries, and that is true. On the whole it is appropriate that the Ministry of Labour should deal with this matter, because the end product in this business is unem- 2602 ployment, which is where all the human problems arise. It is, therefore, proper that I should reply, and, of course, I have consulted my colleagues on this matter.
It would be for the information of the House and of the hon. Member if I could briefly give the up to date position, because that is the responsibility of my Ministry. In the Falkirk area—and by area I go as far as Grangemouth and Bonnybridge—there are 50,000 insured employees. First of all I want to point out that a very high proportion of the employees depend upon the iron foundry industry. That takes in a little more than light casting. No less than 22 per cent. of the insured population is employed in the iron foundry industry, compared with a national proportion of under 1 per cent. That shows how much this area depends on one industry. All modern economic planning regards that as a dangerous position for any area to be in.
The unemployment position is that 1,128 are out of work, of which 242 are wholly unemployed and 886 are temporarily stopped. In all, there are roughly about 1,400 people on short time including the 886 who are temporarily stopped. I do not deny for a moment the hon. Gentleman's point that the situation is serious, but in examining how the position has arisen we must look at it carefully, and here once again we find ourselves up against the problem of the area being dependent on one type of industry.
I do not quarrel with the hon. Gentleman's general assessment of the position, and let us hope that some of the temporary measures now affecting the industry may improve. It is possible, for example, that Australia may further relax her import cuts, and that will give direct benefit. She has still got an enormous housing programme in front of her, and if she relaxed rather more her reduction on imports that might be an immediate help; in fact, the only immediate help that one can foresee for this sort of industry. Anything that my hon. Friend the Secretary for Overseas Trade can do to get restrictions taken off in the export markets fairly soon would greatly help.
As far as the home market is concerned, I am afraid the main reason— and we have been into this very carefully—is that there was a wave of panic 2603 buying about 12 months ago. Merchants stocked up with these light casting goods and that back lag is still to be worked off. When it has been worked off it may be that orders will flow back more readily to the foundries, but it is our belief at the moment that there is still a good deal of stock to be worked off so that there is no immediate prospect of any help from the home market.
The hon. Member put the long-term reason for a drop in demand, and I think I should consider that, because it is right that the industry should not assume that there is going to be some sort of automatic recovery to the position of about 12 months ago. Let me give an example. I was only recently in a factory that makes large numbers of baths. They are made out of three steel pressings welded together. It may not be such a good bath as the type produced in the hon. Member's constituency, but they are, after all, baths, and are exported all over the world. They are, I am afraid, a direct inroad on the market once supplied by the Carron Iron Foundry and other foundries in the Falkirk area.
Therefore, in dealing with what we may be able to do about it, we must face the fact that the total market for these products will be somewhat decreased. That would leave out of account any ingenuity or efficiency on the part of the firms concerned. After all, if I remember my history correctly, the Carron Iron Foundry once made most of the cannon and shot for the whole of our artillery. Obviously, they managed to modify their product to changing times, and I hope that they and associated industries will manage to do so again, with the cooperation of the trade unions and of employers. I hope they will find new products for new markets, but they must face the fact that some of their existing markets are certainly not what they were.
The Government think, on their present information, that there may be some hope of a pick-up but that it is unlikely that the industry as a whole will go back, at any rate within the immediate future, to the peak production of 12 months ago; but that the present level of orders might be hoped to improve, particularly if we can get some further relaxation in export markets.
2604 We must, therefore, look at the problem from the long-term view to see what can be done. On the national picture as a whole, as I have said before, we must consider local remedies inside the general framework of our national plan. If we do not continue to overcome satisfactorily our balance of payments crisis, nothing that we want to do inside the country is possible.
For example, in the hon. Member's constituency, the application of National Insurance benefit for a man who has a large family, and thus draws a good deal of children's allowance and, perhaps, some National Assistance, can result under the present levels of benefit in his being almost as well off without work as he is when in work. I know that that is no consolation, and I do not suggest that the man would not far rather be doing a job. What I do say is that the State has taken upon itself the responsibility of very greatly mitigating the hardship of being, we hope, temporarily out of work; and it can only continue to support that responsibility if the country as a whole does not go bankrupt. To do that we must not have another balance of payments crisis. Any suggestion that I may make must, therefore, be considered in relation to this problem of keeping the national economy and costs as a whole in balance.
Turning to the local position, the first necessity is more diversity of industry. My colleagues in the Board of Trade are doing their very best to try to persuade new industries to come into the area.
§ Mr. MacPherson
The history of the area has not been very happy in that respect. Over the years we have had quite a number of attempts to persuade industries to come to the area, and I hope that this time the hon. Gentleman will be more successful.
§ Mr. Watkinson
I am sure that the hon. Member would not want us to stop trying. It would be unfair for me to quote names of firms which we have in tow—that might be the one thing to persuade them not to come; but we have one or two projects which we think might come off, although they are by no means certain. We think that we might have some success. That would introduce rather more diversity, which we think is what is required.
2605 In helping the industry quickly, all we can do is to continue the effort to try to re-open closed markets and to persuade Commonwealth countries, like Australia, to relax restrictions, which, again, originally were imposed for balance of payment reasons, but which we think should be lifted as soon as the balance of payments position improves; and that we will do.
I listened very carefully to the hon. Member's suggestions about our future housing plans and particularly about the rescue operation for houses which need repair but not demolition. I think he will find, as time goes on, that the Government are considering that problem very carefully and very seriously, and I promise to draw the attention of my colleagues in the Ministry of Works and the Ministry of Housing and Local Government to the points which he has made, which are very valid and would be of immense benefit to the light castings industry.
As for the immediate problem of people out of work, as far as they can our local employment exchanges will place them in work. Circumstances have provided some alternative employment. There are the great oil refineries at Grangemouth. They do not employ a lot of people in total but at least they have provided some alternative employment in the area. We will do what we can to find jobs for those who want to leave the light castings industry for other work.
§ Mr. MacPherson
Will the hon. Gentleman bear in mind that while this decline has been taking place in the light castings industry the opportunities for employment in other industries have also been closing.
§ Mr. Watkinson
I do not disagree with that, but it is fair to say, as I said in the general debate on unemployment in Scotland, that we are in the normal period—I do not claim that it is anything other than normal—of seasonal decline in unemployment. Unfortunately, the 2606 normal season of decline did not take place last year. I am happy to say that it is taking place this year and will last for a month or so, which means that placing prospects are a little brighter. We will do the best we can to place those men who want to leave the industry.
Of course, a lot of them do not want to leave but prefer to hang on. We must remember that two-thirds of the unemployed are only temporarily stopped and it may be that the pick-up in trade will give them a chance to go back to the industry in which they want to work. If any want to leave, we will do our best to find them other work.
If I may sum up, we must not be pushed off our national plan for preserving our country's economy from financial balance of payments crises, because unless we do that we cannot rebuild the slums or do many other things we should like to do. As to our trading policy, I will press my colleagues to try to do more to assist light castings as a product in the export market. On the home front, if we can stay solvent I think gradually we can spend a great deal more money, and should spend it, on reconditioning houses and slum clearance, which will need light castings more than the present housing drive and which will be of great benefit to the industry.
To meet the immediate problem, all we can do is to try to place these men who wish to leave the industry. For those who do not, and who think it worth while to accept a period of unemployment, under the present social benefits, for which all parties are responsible, I am glad to say that they are at least reasonably well looked after financially and—
§ The Question having been proposed after Four o'Clock, and the debate having continued for half-an-hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at Twenty-one Minutes to Five o'Clock.