HC Deb 13 February 1967 vol 741 cc54-65

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

12.34 p.m.

Mr. Stanley Henig (Lancaster)

Lancaster is regarded as a natural growth point in the north of the County of Lancastershire but it is not about this excellent long-term prospect that I wish to speak this morning. Instead I want to draw attention to a rather serious, immediate problem which is now facing Lancaster as a result of the decision made 10 days ago by the firm of Nairn-Williamson to lay off 1,550 men.

Williamson's were always the Lancaster half of this firm but some years ago it amalgamated with Nairn a traditionally Scottish-based firm. For Lancaster this is not just another company. For many years Lancaster revolved around Williamson's. At the moment, 8 per cent. of all people employed in Lancaster work at Williamson's. Of those in manufacturing industries in the area, the figure is higher than 20 per cent. If we exclude textiles the figure is as high as 35 per cent.

It may be asked why I bring this matter up in the House, since firms are always doing this kind of thing. On this occasion it must be brought up in the House because a Government Department is involved and that is the Board of Trade. The firm of Nairn-Williamson has decided to rationalise its production and to concentrate the bulk of it at Kirkcaldy, a development area. It is enabled and helped to do this by the wise policy pursued by the Government of giving development grants.

Let me say straight away that no one in Lancaster would want anything other than full employment for the people of Kirkcaldy. The only major worry for us is if that full employment comes about at our expense. There is a grievance in Lancaster and it is one of lack of consultation. Nairn-Williamson and the Board of Trade knew about this decision some months ago. No one in Lancaster was told, although I believe that people in Kirkcaldy were informed. The first I knew was when the local Press—and all praise to them, they get a lot of criticism—told me about this on the telephone. They told me that they had been informed that they ought to keep it a secret for over 12 hours.

Nairn-Williamson has landed itself in its present mess through bad management, out-dated methods and failure to diversify. I would ask my right hon. Friend, since public money is involved in the future of Nairn-Williamson, because it has development grants, what safeguards he has sought to see that, not only in Lancaster but also in Kirkcaldy, the firm does not repeat its present disastrous record, and to ensure that in a few years' time there will not be the same difficulties for employment in both areas.

If 1,500 people became unemployed in Lancaster our rate of unemployment would go up to 7 per cent. It has been said that unemployment in Lancaster could not be 7 per cent. and this is probably right; no doubt things will happen. But, because we think that things will happen, it is no good saying that there will not be 7 per cent. unemployed, and sitting back and forgetting about it. The only reason why there will not be 7 per cent. unemployment will be if someone does something to stop it happening.

I have also heard it suggested that something like 700 new jobs will appear in the city in the next year or two. One rather exaggerated estimate put the figure at 1,000 jobs—I do not know where this came from. The estimates seem to be based on a somewhat hypothetical expansion of existing firms. I want to draw attention to five points which must be considered against this projected expansion. First, the existing unemployment of 1,500 men must have a multiplier effect in causing secondary unemployment in the area. The concept of the multiplier is pretty sophisticated, but I was interested, talking to local tradespeople in Lancaster, to find that, whether or not they had an economics degree, they all knew of the danger to their businesses which this unemployment might cause.

Secondly, there is certain, in the next year or two, to be expansion of the population in Lancaster—that is to say, there will be more school leavers looking for jobs than people retiring. In other words, there will be extra people and not fewer on the labour market.

Thirdly, in a town such as Lancaster, with old, traditional industries, many having been taken over by bigger concerns, there is always the danger, some would say the promise, of further rationalisation. There are rumours about some of the firms remaining in the city. I hope that if any of these come to anything, at least this time there will be consultations in advance.

Fourthly, while the management of the next biggest firm in Lancaster, Storey Bros., is quite excellent—it is diversified and is a superb firm—the prosperity of the area cannot be safely linked to the sale of one product—Contact.

Fifthly, many of the people who will be unemployed as a result of this decision will be clerical workers. We have recently had the problem in the area of the close-down of the Morecambe branch of the Post Office Savings Department, which also affects the unemployment position in Lancaster. This has to be taken into account. There is very little opportunity in the area for this kind of work. It is believed by people in the area that if no positive action is taken, unemployment will certainly rise over the next two or three years to 5 per cent.

Lancaster could be called a grey area. It is not an area which has enough natural features of its own to attract industry without specific help from the Government. On the other hand, it is not, fortunately, an area which has suffered much from unemployment in the past. Consequently, the Board of Trade did not designate it a development area. We have a brand new industrial estate at Whiteland, yet this estate is virtually empty. One of the reasons why it seems to be empty is that Lancaster is in competition with developing areas to gain industry; and that industry, reasonably enough, if it must go to the further points of the country, would rather go to a development area where it can get a 40 per cent. grant than come to Lancaster and get only a 20 per cent. grant.

I am asking this morning for a number of assurances from the Board of Trade. First, I should like the Department seriously to look at the problem of the grey areas. I recognise that the development area policy is new; I also accept that it is essentially a good policy. I further recognise that practically every non-development area would like to be a development area.

Essentially, however, in talking about development areas, what we have to do is to move industry from the West Midlands, from the South, from the over-employed and developed areas to the under-developed areas. There is, however, a suspicion that the policy which is pursued may have the untoward effect of shifting industry, not from Birmingham, Coventry or London, but rather from the Lancasters in the country. I should like the Board of Trade at least to say that it will look at this problem.

Secondly, despite the fact that the Board of Trade must have been inundated with requests for areas to be made development areas, I hope nevertheless that it will bear in mind the possibility of revising speedily the existing frontiers. In Lancaster we have the absurdity that 30 or 40 miles to the north little villages like Arnside, for example, have been made development areas. Lancaster has not.

Moreover, bearing in mind what has just happened, a special factor is that Lancaster and Morecambe together—I think that the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis), whom I see in his place on the benches opposite, will associate himself with me in these remarks—are quite certain, unless action is taken, to have an unemployment level sufficient to justify making the whole area a development area. When the times comes for revising existing frontiers, I hope that the Board of Trade will consider this.

Thirdly, I should like the Department to be quite certain that adequate retraining centre accommodation is available for the workers who are being laid off by Nairn-Williamson who may wish to be retrained for other jobs. Virtually every proposal for bringing industry to the area and every suggestion of natural expansion means that some workers must change their jobs. Unless this is made easy for them, there will still be great social problems.

Fourthly, in Lancaster we should very much like regional officials to help push Lancaster's case for new industry with potentially interested entrepreneurs. I know that there are difficulties and that the Board of Trade does not have power to tell a firm to go to Lancaster or even to guarantee that it will be in its best interests to do so. There are, however, such things as winks and nods. Perhaps my right hon. Friend the Minister of State cannot talk about them this morning, but I hope that when firms plan with the Board of Trade where they shall expand their activities and the areas to which they should move, the Department will be aware that a community which previously had a high level of employment is about to get relatively high unemployment, that we have an industrial estate available and that we have a reasonably trained and good labour force. I hope that the Board of Trade will be able to help in this direction.

Finally, I hope above all that the Board of Trade will feel free to follow a liberal and speedy policy with the granting of industrial development certificates—not only liberal to the extent of being fairly free in granting them for such firms as are attracted to the area, but speedy so that there will not be difficulties and the possibility that en route Lancaster will lose firms that were scheduled to it.

I have put forward a strong case because Lancaster must have a strong case put for it. The firm in question is not simply any firm. It has been a firm which, not always for the good, has dominated the past history of Lancaster. The threat of 1,500 men losing their jobs has caused widespread dismay and concern in the city. We are not out to win debating points; the debate we willingly concede. What Lancaster wants is the promise that its problems will be looked at and that it will be helped. Nobody in Lancaster is attacking or blaming in any way the Board of Trade because of its development policy, nor are we jealous of Kirkcaldy's good fortune. The only thing I say is that now that these things have happened and Lancaster's future prosperity is endangered, now that this has become a life-and-death issue for the city, I hope that the Board of Trade will do everything in its power to help redeem the situation.

12.46 p.m.

Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale)

I shall be brief in adding my support to the comments of the hon. Member for Lancaster (Mr. Henig) because I do not wish to limit the time available for the Minister of State, Board of Trade to make his reply. The hon. Member for Lancaster has referred to the effect on the unemployment level in his constituency of the withdrawal of 1,500 jobs. Many of these people employed by that firm live in my constituency, and in the Morecambe area the unemployment figure is already 5-3 per cent. It will, therefore, certainly go to 7 per cent. or more, as mentioned by the hon. Member, if alternative work is not drawn into the area.

What worries me and the point which 1 wish particularly to put to the Minister of State is that we may well have a situation in which, because of the lengthy notice which is quite rightly and reasonably given of redundancy, we must see the beginning of a drift away from the Lancaster area such as has happened in many other areas of Lancashire. That is particularly undesirable in this area because the Lancashire County Council and the North-West Regional Planning Board are looking to the Lancaster-Morecambe area as one of considerable and early expansion.

I draw the Minister's attention to Section 15(3) of the Industrial Development Act, 1966, which I debated with him in Committee for some time. Referring to development area designation, it states: and in exercising their powers under that subsection the Board shall have regard to all the circumstances actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies. In adding my support to what the hon. Member for Lancaster has said, I would say only that any drift away from this area and any falling off of employment opportunities would generally be accepted by all concerned as being directly opposed to regional policy for the North-West.

12.48 p.m.

Mr. Alan Williams (Swansea, West)

I will be extremely brief so that my right hon. Friend the Minister of State, Board of Trade, may give an adequate reply to the case put by my hon. Friend the Member for Lancaster (Mr. Henig). Another point of view should be expressed at this stage, and that is the viewpoint of the development areas. I know that the development area discussion in this case concerns Scotland, but the same principle applies in Wales.

The outlook for many of these parts of the country should be borne in mind. It was prophesied last week, for example, that in the Rhondda unemployment could conceivably rise to as much as 10 per cent. Therefore, when my hon. Friend the Member for Lancaster speaks of killing a town or city with an unemployment figure of 5 per cent., he should bear in mind that many areas have for a long time, not just for months, struggled with figures far higher. The outlook for these areas is not only of fewer jobs for adults, but of fewer apprenticeships for the young.

My hon. Friend made the point that the population might be encouraged to move. I know that some economists would argue that way, but it must be borne in mind that people who happen to be in one of those development areas, and in one of the most hard-hit parts of areas such as the Rhondda—I do not know about Kirkcaldy—are not able to sell their homes. A man is faced with the problem of having to move from an area in which he cannot get rid of his home, into another area where, because it is an alleged growth point, house prices will be high.

However, I would support my hon. Friend's idea of "grey" areas. I have argued on many occasions in the House that there should be a two-tier system, thereby singling out bad areas like the Rhondda and ensuring that they get extra aid.

12.50 p.m.

The Minister of State, Board of Trade (Mr. George Darling)

To begin with, I wish to say how much I sympathise with the very natural concern which has been expressed by my hon. Friend the Member for Lancaster (Mr. Henig) about the closure of what is admitted to be the biggest single firm in his constituency. However, it is not a complete closure. What Nairn-Williamson has decided to do is to rationalise its business. As my hon. Friend has said, the firm has other sections, and the decision which it has taken, after a great deal of consideration, is that all smooth floor covering and building products will be centred on Kirkcaldy, the tufted carpet production will go to Batley, and all pile fabric production will remain at Lancaster. It is not therefore a complete rundown.

The first thing that will happen is of advantage to us, in that the building of a new factory in Kirkcaldy will give employment there to an extra 700 people, where it is very greatly needed because of the circumstances in that part of Fife. I will not disguise the fact that we welcome that additional employment in the area.

My hon. Friend said that the firm should have given more information to its employees, and he also suggested that the Board of Trade should have done so. That raises a very difficult problem for the Board of Trade, because we are involved in discussions with firms all over the country about their development plans and projects. I can assure my hon. Friend that a large proportion of the discussions are with firms which want to expand in the Birmingham conurbation and in the South-East. They know very well that they will be refused out of hand or will have very great difficulty in getting industrial development certificates in those parts of the country. As a result, we go into further discussions about where the developments which they want should take place. All those discussions must be confidential. Quite objviously, the Board of Trade cannot have discussions with firms if the information given to the Board of Trade is then made public.

What we do is to urge them to have the fullest consultation possible with their employees in order to give them, either directly or through trade union representatives, as much notice as possible to make sure that workpeople are not taken by surprise and that arrangements can be worked out to look after the interests of those who will be affected. The vast majority of firms in the country accept that and carry it out.

The scheme of Nairn-Williamson is part of a process of rationalisation to increase efficiency, and therefore it is to be welcomed. But I recognise that, in its bringing about some reduction of employment in Lancaster, my hon. Friend's constituents cannot look at that kind of rationalisation with anything like enthusiasm. I can well understand their concern.

The hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) made the very pertinent point about giving long-term notice. However, that cuts both ways. We do not want long-term notice, which is in the interests of employees, to encourage emigration from Lancaster itself.

In the few minutes available to me, I want to deal first of all with the local situation and what we intend to do to try to help. Board of Trade experience has shown that, where an area is faced with this kind of problem, which is by no means unique, the area itself has quite a capacity for absorbing the people who are thrown out of work. Industrial development will be going on, because it is an area where people are available for work. We shall do our best to encourage that.

I hesitate to say very much about jobs in prospect. As hon. Members know, I am always chary about making promises for the future, because so many things can happen which upset them. However, there is some new industrial building going on, and there are jobs in prospect in a number of existing buildings which have been taken over by manufacturing firms in both Lancaster and Morecambe. In addition, the expansion of Lancaster University will lead to further employment opportunities for some skilled and semi-skilled men. If the proposed nuclear power station at Heysham goes ahead, that will require construction workers. When it starts production, it will provide employment for about 500 people, three-quarters of whom are to be recruited locally, I understand.

My hon. Friend raised the question of industrial development certificates. I think that he and the hon. Member for Morecambe and Lonsdale should know that the Board of Trade has never refused a certificate for Lancaster or Morecambe When I looked up the figures, I found that in the three years 1964, 1965 and 1966, 24 industrial development certificates were issued in those areas to employ approximately 800 people, over 500 of whom were men.

As to the future, I can assure my hon. Friend that any applications for industrial certificates in the area will be carefully considered, whether they be from existing industry or from a newcomer to the area. Subject always to the overriding needs of the development areas, our attitude will be very sympathetic to any application that is suited to the resources of the area. We try to operate a flexible policy, and we can help.

My hon. Friend said that he would like the area to be scheduled as a development area. This completes the circuit. We started off at Bridlington. We have gone all the way down the east coast. We have gone along the whole of the south coast considering which places must be left out. We have gone up the Bristol Channel. We have had Barry, Rhyl and Prestatyn, and then Blackpool and Fleetwood all making applications to be scheduled as development areas. That situation arises because seaside resorts and adjacent towns have a peculiar problem.

My hon. Friend will not expect me to say that we intend to schedule any of the places round the coast which have asked for development area status. The point which he has raised, which was repeated by my hon. Friend the Member for Swansea, West (Mr. Alan Williams), was that areas like seaside towns that have peculiar difficulties about employment and industrial development should be put in between the help given to a development area and the 25 per cent. help by way of investment grants which is given in other areas. The suggestion, in other words, is that we schedule "grey" areas and give them help which comes between those two provisions.

We are prepared to consider that, but we cannot do it until we have brought down the rate of unemployment in the development areas. That is our basic task. The resources available for industrial development must be provided until we have conquered the unemployment in places like the Rhondda and elsewhere. After that, we must look at these "grey" areas.

In the meantime, 1 assure both my hon. Friend the Member for Lancaster and the hon. Member for Morecambe and Lonsdale that we will do all that we possibly can to see that industrial development in their part of Lancaster continues and we will undertake to help people thrown out of work to find jobs quickly by means of training and retraining.

The debate having been concluded, Mr. DEPUTY SPEAKER suspended the sitting till half-past Two o'clock pursuant to Order.

Sitting resumed at 2.30 p.m.