HC Deb 19 July 1963 vol 681 cc1009-22

Motion made, and Question proposed, That this House do now adjourn.—[Mr. G. Campbell]

3.50 p.m.

Mr. Norman Dodds (Erith and Crayford)

The purpose of this debate is not to complain about the present unemployment figures for Erith and Crayford but to alert the powers that be to the substantial evidence of the very worrying situation which is rapidly developing in a part of south-eastern England which hitherto has been looked upon as a land flowing with milk and honey.

Because of its reputation, more and more people are leaving their homes in other parts of Britain to seek their fortunes in the South-East. I believe that this image of prosperity is now rapidly coming to an end and the fear of widespread unemployment is rearing its ugly head in a most menacing fashion.

I begin with a letter which I received from the district secretary of the A.E.U., Erith branch, on 26th March this year. It is headed "Redundancy", and states: The District Committee has for some time been concerned with the growing number of redundancies occurring in the district. Most of the large firms are compulsorily retiring members at the age of 65. A disquieting feature seems to be the lack of development work now taking place in the district. In this last year or two development work at I.C.T. was transferred to Croydon. Two development departments in Vickers-Armstrongs, Crayford, have been closed, and the United Power Company, which set up large research laboratories adjacent to the G.E.C., are now closing and being concentrated at Hendon. A letter dated 29th April from the same committee states: The most serious problem as far as engineering is concerned is that there will be a shortage of vacancies in general engineering for apprentices this autumn. Woolwich Arsenal, G.E.C., I.C.T. and Vickers-Armstrong, Crayford, have probably the best training facilities in the district with well equipped apprentice training schools, which will not be used to anything like their normal capacity. I am indebted to the Erith Observer for the way in which it has publicised and kept its eyes on the way in which jobs are drying up in the area. In its issue of 14th June it stated: Factory closing down. One hundred and twenty workers at a Crayford factory were handed a bombshell in their wage packets last week—the management gave notice that the whole factory was 'going out of business' and there would be a complete shut-down by October. It seems to me that the months of September and October will see a great enlargement in the unemployment figure in the Erith and Crayford district. The Erith Observer of 28th June had the headline: Firm lose £50 million contract: 250 jobs in danger. The report then stated: It has been revealed that the firm, United Power Company, have lost the first half of a £100 million atomic power station contract at Wyfa, Anglesey. Last week, in another place, Lord Coleraine made very strong comments about the way in which this contract was lost. We in Erith are deeply concerned and, after what has transpired, we support his request for an inquiry into the nuclear energy industry.

There is little doubt that redundancy will take place during the next few months affecting a large number of craftsmen and staff, although it is likely to be less than the 250 mentioned in the Erith Observer. The policy being followed by the firm is that of not recruiting to make up for wastage, retirement, etc. This will, of course, reduce the number of jobs available this coming winter and this is particularly serious to the younger members of the population.

The United Power Company is one of a consortium in the General Electric Company empire. We in the Erith district noted with some interest a report in the Evening News on 15th July headed: G.E.C. profits have jumped £1,500,000". The report said: Mr. Arnold Lindley chief of the mighty General Electric Company that makes everything from nuclear power plants down to T.V. sets and lamp bulbs, reports a big upsurge in profits. They are nearly £1,500,000 higher at £7,500,000. We should like to bring it to the notice of the powers-that-be that if there is any redundancy locally—I believe that it will in particular be of men who have worked for years for G.E.C. through the firm of Frasers and Chalmers, looked upon as one of the finest firms in the country—the workers should be generously compensated or, more important, an effort made to find them other jobs, for it is work rather than compensation that troubles most people.

The decision that I should change this Adjournment debate from education in Kent to the question of unemployment largely arose because yesterday the Erith Observer gave the alarming news that the factory of Frederick Braby and Company, Limited, at Crayford is to close. The report said: Crayford is reeling this week with the news that the £1,250,000 engineering firm of Frederick Braby and Co., Limited, is to be closed by September.' The number of those—including craftsmen, staff and executives—who have been served their notices was 725 a fortnight ago. The report went on: The shutdown came as a bombshell to the employees when they opened their wage-packets on Friday to find a note which gave them three months notice. This is the sort of firm where people start when they leave school and expect to stay all their working lives. It is very disconcerting to local people to know that in May there was a denial that the firm would shut down or be sold. Up to last Friday, they had been working three nights a week overtime and Saturday mornings as well. Although there has been a loss, the unions feel that it has been as a result of bad management and might have been avoided if there had been consultations with the workers. This is much more serious when one realises that the factory has been built for only 10 years.

It being Four o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed. That this House do now adjourn.—[Mr. G. Campbell.]

Mr. Dodds

This situation is all the more disconcerting when it is remembered that this fine firm was responsible for building 100 houses in Cray-ford for its employees. The local council has been asked to take over these houses, but there are many serious complications in a matter of that sort.

There is also some concern about the compensation rates being suggested, for it is said that they are hedged about with conditions and that they are miserly. The unions are saying that the Ministry of Labour should be interested in holding an inquiry into the activities of the firm responsible for the closing down of the Crayford factory. A statement issued by Frederick Braby and Co. says: The overhead costs at Crayford are increasing all the time. Local rates, for example, have gone up by approximately £13,000 from 1st April this year; and with the factory operating below capacity despite intensified sales efforts, it made a loss in the year 30th September, 1962, of nearly £100,000, and approximately the same figure in the first half of the current year. We have therefore decided that the factory must be closed and the premises put on the market for disposal. This was a decision taken with reluctance, bearing in mind the 700 employees and staff, many of whom have spent the whole of their working lives with us. There are more than 600 male employees many of whom have worked for the firm 20 or 30 or even 35 years. There is concern about where they are now to work, especially at a time when work is drying up for miles past Crayford down to the Isle of Sheppey and Rochester and Chatham. The statement goes on: The Board are satisfied that the closing of Crayford is in the best long-term interest of shareholders and of the employees in our five other factories. The people of Crayford are wondering whether it has been decided to get better trading returns by telescoping the work of six factories into five, those at Liverpool, Glasgow, Bristol, Uxbridge and Slough. If it is, terrible problems and hardship and misery for the people of Crayford are being left behind.

The Parliamentary Secretary to the Ministry of Labour sent me a very helpful letter, but I ask him whether something more cannot be done than simply stepping in later and trying to find jobs for these people. Can he say that there is to be no delay in considering this problem, bearing in mind the troubles developing in other firms? Can he make representations to the Board of Trade? We all know that for some time new firms wanting to come to the south-east of England have found it difficult to get industrial development certificates, but these circumstances are such that that policy must be reconsidered. Last week the Erith Observersaid that 400 youngsters about to leave school would soon begin to hunt for jobs. I think that the hon. Gentleman's Ministry will agree that the outlook for these youngsters is very bleak indeed, and I couple this with what I said earlier about apprentices.

hen Government Departments are placing orders, I ask them to pay regard to the amount of work being carried out in this part of England. I give as an example the fact that in 1962 the War Department placed an order for the purchase of 67 fork lift trucks from America. These cost £250,000, yet we know that they could have been produced in England, where it was necessary to create work. I pay tribute to the new Secretary of State for War who is prepared to test a British fork lift truck with an American to consider whether our claims to be able to produce goods in this country are in fact true.

I make that point because the steel casting for those trucks could have been made by the Erith Foundry, which is famous for making steel castings. It makes castings for the firm which we believe should have made these trucks, but it was not given the opportunity to carry out this order.

People in the locality have been surprised by the plan to build a new town on Erith Marshes. With few exceptions, the people there recognise that this is a great social experiment to accommodate 25,000 Londoners who desperately need houses. According to the plans, these houses are to be built within 10 years of the completion of discussions on the project.

Everybody agrees that with the transport system as it is, with people packed to suffocation on the trains, new industries should be provided in the area to which it is proposed to move people. I see recorded in the minutes of the London County Council meeting of Tuesday, 11th December, 1962, the statement that: Although the site lies so close to the County of London, communications by rail with the centre of London are already very heavily used and their improvement or expansion on the scale necessary to serve a new community of 25,000 cannot be envisaged in the foreseeable future. Unless provision is made for local employment, all the employment groups, including operative and office workers would contribute to congestion on the transport system inwards to the London area. It has been suggested that about 2,000 operatives could be absorbed by existing industry in North Kent … I submit that this might have been possible when the scheme was first discussed, but it is now fantastic to suggest that a further 2,000 people could find jobs in existing industries in that area. It is said that new industries will be brought into the area to provide jobs for these people. We suggest that industry is needed not only for those who are to come in, but for those who are already there.

The minutes go on to say: Accordingly we propose that the Minister of Housing and Local Government, who has already indicated his intention to see that more land is made available for housing, shall be asked to agree that the cost of securing the transfer of industry shall be eligible for Government assistance … I ask the hon. Gentleman to see that this is pressed forward, and that the present state of affairs is brought to the attention of the London County Council, the Ministry of Housing and Local Government, and other Government Departments concerned.

Finally, I am seeking immediate action by Government Departments—and a number of Departments may be concerned—as a matter of great urgency to avert as far as possible that soul-destroying menace of unemployment. I ask that this worst form of creeping paralysis to any community should be tackled with a will, before it is too late.

4.10 p.m.

Mr. Sydney Irving (Dartford)

I am grateful to my hon. Friend and to the Minister for allowing me to make this brief intervention in this Adjournment debate. I have just been given the most disturbing news that a Member could receive about his constituency. This afternoon I was told of a decision that is being communicated at this minute to the 1,200 employees at the works of International Computers and Tabulators Ltd. in Dartford, that the works is to close down. This means that in the next 15 to 18 months, at the outside—and in many cases very much earlier—1,200 employees will be out of work. Threats of redundancy have been hanging over the heads of many of these men for a long time, with all the anxiety and distress that that entails.

However, in a letter which I have had from the Parliamentary Secretary to the Board of Trade, dated 6th May, he tells me that in this area the rate of unemployment was below the national average, and he says that these men should have little difficulty in obtaining alternative employment within the area". I wonder how much in touch he is with the situation there, and whether he is aware of the build-up that has come about in unemployment quite suddenly over the last few months. The information which my hon. Friend and I have given the House shows a most serious, disturbing, and deteriorating situation, in which the long-standing industrial prosperity of this area has been shattered. Not only the firms that we have mentioned are in difficulties; many others are affected, including some quite large ones.

We want to know today what the Minister of Labour, the President of the Board of Trade and the Government propose to do to stop the rot and help to bring new industry to this area, in order to restore stability of employment and prosperity. In particular, I should like an assurance from the Minister that no difficulty will be experienced in respect of the issue of industrial development certificates to this area, and that everything will be done to help it.

4.12 p.m.

The Parliamentary Secretary to the Ministry of Labour (Mr. William Whitelaw)

I am grateful to the hon. Member for Erith and Crayford (Mr. Dodds) for his courtesy in warning me in advance of some of the matters which he wished to raise this afternoon. I appreciate the reasons which prompted him to raise this subject on the Adjournment today, and I recognise his proper concern, and that of his hon. Friend the Member for Dartford (Mr. Sydney Irving), about future employment prospects for their constituents. Redundancies always create unwelcome upheaval for those affected, even when alternative work is available.

Before I deal with the problems that the hon. Member has raised it would be right for me to give some details of the present employment position in the area. It is important to set this out clearly, so that the problems now facing the district may be seen in perspective. The figures for June, which are the latest available, show that there were 320 unemployed at the Erith Employment Exchange, of whom 295 ware males and 25 were females. The number of unemployed showed a slight rise since May, when the figure was 259. This rise was due almost entirely to short-time working at one firm, which short-time working has since come to an end.

Mr. Dodds

Is not this twice as many as last year, when the figure was 150?

Mr. Whitelaw

I do not think that it is twice as many. It is more—which is in line with the trend throughout the country—but it is not much more.

As the hon. Member knows, I cannot express the figures as a percentage rate of unemployment because Erith is part of the Greater London area, where, because of the considerable amount of travel-to-work between the constituent exchanges, a rate can be given only for the whole area. In fact, the rate of unemployment for the Greater London Area was 1.2 per cent. in June compared with 1.3 per cent. in May and 1 per cent. a year ago.

I think it also fair to add—and this refers to what was said by the hon. Member for Dartford—that the Dartford Employment Exchange, which lies to the south of west Erith, has a very low unemployment rate of .8 per cent. Therefore, I think I must come to the defence of my hon. Friend the Parliamentary Secretary to the Board of Trade in that I think the hon. Gentleman would accept that .8 per cent. is indeed a very low figure of unemployment.

The hon. Member for Erith and Crayford mentioned in the course of his speech that it seemed to him that a number of firms in the constituency had not been replacing wastage for some time. It is, of course, very difficult to get much evidence on matters of this sort, but if what the hon. Gentleman says is true, then I think that this again is nothing more than a reflection of what has been happening throughout the country over recent months when industrialists everywhere have been taking a hard look at their labour forces.

I now turn for a moment to the position of young people. There is, as the hon. Gentleman knows, a complication in that while separate figures are available for Erith they are not available for Crayford, which is covered by the Dartford Youth Employment Office. The figures for these two youth bureaux show that in Erith there were in June 30 unemployed, of whom 18 were boys and 12 were girls, compared with 10 a year ago. In Dartford there were 28 unemployed, of whom 17 were boys and 11 were girls, compared with 32 a year ago. The position is more favourable in Dart-ford than in Erith. But it is worth pointing out that both areas have seen a considerable improvement in the course of this year, admittedly a necessary improvement.

In Erith the number of young people unemployed fell from 63 in February to 30 in June despite the fact that there were 129 Easter school leavers to be absorbed. Equally, in Dartford the number fell from 54 in February to 28 in June after 260 school leavers had been absorbed.

I do not want to appear in any way complacent about these figures. Everyone recognises the vital importance of getting young people off to a good start to their working lives. Nevertheless, I do not feel that these figures show that there is at present any evidence of a serious unemployment problem for either young people or, for that matter, for adults.

Mr. Dodds

No one is complaining about that. We are concerned about the future.

Mr. Whitelaw

If I may say so, I think the hon. Gentleman will have been the first to notice that when I made that comment I emphasised the words "at present" and looked at him very hard in the course of saying so.

I now turn to the future developments in the area about which I realise that both hon. Gentlemen are particularly concerned. The hon. Member for Erith and Crayford mentioned various redundancies. I understand that Messrs. Braby, a firm which undertakes a wide variety of metal work, intends to close, as the hon. Gentleman says, by the end of this year. The firm employs at present about 700—the figure which was more or less confirmed by the hon. Gentleman—all of whom will be declared redundant.

I think the hon. Gentleman will appreciate that I cannot give him any accurate forecast of the employment prospect for these people at present since the firm is not yet in a position to give us detailed figures about the phasing of the rundown or about the skill, ages and experience of its workers. A number of these workpeople are likely to have skills which are in demand locally, and I can tell the hon. Gentleman that we have already received local inquiries for certain types of people. Although, no doubt, the great majority of these people live in Erith, we know that a number live in Dartford or even further a field, and these, of course, will seek work nearer their homes. Those not re-employed locally will have to find work in the south London area with which, I think the hon. Gentleman will agree, Erith has good, even if, as he suggests, overloaded communications. For these reasons, I should not expect a general unemployment problem to arise from this redundancy. But I recognise that there could be some special difficulties.

For example, we must be concerned about the 26 apprentices who, I understand, are training with this firm. I understand that the firm has asked the Engineering Employers' Federation to help in placing these boys elsewhere, and a representative of the Federation and the local youth employment officer discussed this question yesterday with representatives of the firm. Regarding the adults, our local officers are in close touch with the management at Brabys. It has already been agreed that we should be allowed to register the firm's employees in advance of their discharge. I assure the hon. Gentlemen that our local officer will do all that is possible to find alternative employment for those who seek our assistance.

The hon. Gentleman commented on the way in which the firm was handling this redundancy. The firm took its decision to close for commercial reasons and that must be a matter within the discretion of the firm. The hon. Gentleman suggested that there had been some delay. From what I have said about the apprentices I think it will be apparent that the firm is only too ready to help our local officers and those concerned who are seeking to do their best for the people who, most unfortunately, have been declared redundant. It is also fair to point out that the firm is making some form of severance payment to the staff. I do not wish to discuss the size of the payment, but it is fair to say that payments are being made.

The hon. Gentleman referred to redundancy at the G.E.C. factory at Erith and I understand that a number of workers employed by the United Power Company at the G.E.C. factory are likely to lose their employment in the coming months. Our local officers are already in close touch with the firm, but until we know the details of the precise numbers to be made redundant and their composition, we shall not be in a position to make an accurate forecast of their prospects.

The hon. Gentleman expressed concern about redundancies at the Vickers-Arm-strong Thames ammunition factory. I understand that Vickers intend to close the factory by October of this year. But the firm hopes to be able to absorb most of the workers affected—about 120—at its factories at Crayford and Dartford. We shall do all we can to help any of the workpeople who seek our assistance.

Referring to what was said by the hon. Member for Dartford, may I say that the hon. Gentleman will appreciate that the announcement, which I understand was made at 2.30 p.m. today, came as much as a surprise to our Department as it did to him. At this stage, therefore, I cannot make any detailed comment, but we have since been in touch with the firm and I can tell the hon. Gentleman that the reason for the redundancy is the general change from mechanical to electronic business equipment. It has caused the firm to reorganise its business at a number of factories. We have not yet had an opportunity to assess the employment prospects of the people affected, but I can say that the firm sees no need to discharge any workpeople during the remainder of this year. I assure the hon. Gentleman that we shall keep in close touch with the firm and I undertake to write to him about employment prospects as soon as we know more.

In general, I would say that while one appreciates the concern of hon. Members representing this area about the effects of the redundancies I do not honestly think that they give cause for despondency about the employment pros- pects in the area. While it is true that one factory is closing at Erith there is no reason why some industry should not replace it. I understand that Messrs. Braby has announced that they intend to sell their factory. There is, of course, nothing to stop another employer purchasing the factory for his own use. This is true of any other factories which may be available in the area.

We must accept that Erith is part of the Greater London area and has good communications with many parts of south London. One would have to be excessively pessimistic to think that the Greater London area was unlikely to be able to continue to provide a very large amount of employment over the years to come. Therefore, while I agree that both hon. Members are perfectly right to draw attention to the difficulties of this area, I do not think either of them should be unduly alarmed about the long-term prospects for the area.

The hon. Member for Erith and Crayford suggested that the Government's present restrictive policy towards issuing industrial development certificates for the area threatened the future employment prospects of his constituents. This, of course, is primarily a matter for the Board of Trade, but the hon. Member is perfectly right in thinking that we are operating a tight policy towards the issue of industrial development certificates in the Greater London area as in all other areas of high labour demand.

I am sure we all agree that it is vitally important to continue to do so in order that industry which can move should go to areas of greatest need of new employment. The fact is, however, that all applications for industrial development certificates are examined on their merits. I think the hon. Member would be wrong to under-estimate the amount of employment which is bound to be tied to the Greater London area. I think he knows very well that many of his hon. Friends and many other hon, Members in the House as a whole, from Scotland, the North and other areas of high unemployment, wish it were much less.

The hon. Member also referred to the development which London County Council hopes to carry out on Erith Marshes and expressed doubts about whether there would be sufficient local employment available for people who might be housed under the scheme. I understand that the L.C.C. plans are only preliminary proposals at this stage. I think I should be right to say to the hon. Member that I shall certainly see that what he said will be noted by those responsible for these arrangements.

I have been talking about employment in general, but I wish to end by saying a few words about employment prospects for young people. The hon. Member for Erith and Crayford was very right to draw attention to their needs. I fully share his concern about their future, but I do not see any reason to think that the prospects for young people in the Erith area are anything but good. We must face the fact that last year the summer school leavers were absorbed without difficulty. We foresee no serious difficulty for this year's summer school leavers, who will be about the same in number as last year in Dartford and slightly smaller in number in Erith.

Of course I appreciate, and I think both hon. Members do, that a number of these young people, as in the past, will have to find work outside Erith elsewhere in the Greater London area. In the course of my reply I have tried to show both hon. Members that there are reasonable employment prospects for their constituents in this area at present. I know that neither of them disputes that fact. I hope that I have also managed to convince them that we in the Ministry of Labour appreciate the problems of the future for them and that we shall do our very best to meet them.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Four o'clock.