HC Deb 26 February 1969 vol 778 cc1856-68

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

10.59 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

In October, 1967, the Government, commenting on the Review of Yorkshire and Humberside produced by the Economic Planning Council, said: There are undoubtedly grounds for disquiet concerning the long-term economic growth of the region and the Government will keep the situation under review. The Economic Planning Council's reply was very much more to the point, and I wish to quote from paragraph 2. It read: One of the economic characteristics of the region not referred to in the Government commentary is the substantial decline in employment in certain industries of major importance to the region, and the heavy dependence of some parts of the region on employment in industries in which manpower has declined and can be expected to decline in future, in particular areas of South Yorkshire and the Yorkshire Coalfield. The rate of future decline must be anticipated well in advance. Unfortunately, instead of the rate of future decline being anticipated well in advance, we have been left waiting for the Hunt Report.

In 1965 unemployment in the Yorkshire and Humberside region was running at between 75 per cent. and 80 per cent. of the national average, which at that time was quite low. In 1966 it was running at between 80 per cent. and 90 per cent. of the national average. In 1967 it was running at between 90 per cent. and 100 per cent. of the national average and in December, 1967, it had reached the national average figure.

In 1968 the unemployment figure for the region never fell below the national average, and in August, 1968, it was 12 per cent. above it. More specifically, in the Yorkshire coalfield in September, 1964, there were 5,800 unemployed, or 2 per cent., in September, 1968, the figure had shot up to 13,500, which was 4.6 per cent., and in February, 1969, these were the percentages in various parts of the coalfield area: Hemsworth, 8.9; Mexborough, 6; Barnsley and District, 4.6; Doncaster and district, 4.6; and Rotherham, 4.4. Those figures compare with a national average of 2.6 per cent. for this month. Fortunately Sheffield has kept a fraction below the national average, but whereas in January and February, 1965, the figure of unemployed was 2,000, in January and February, 1969, it has been running at about 7,000.

There is nothing particularly obscure or perverse about the reason for this state of affairs. It arises largely from the process of industrial reorganisation and modernisation in the two basic industries of coal an dsteel. However, it derives in part also from the reorganisation and improvement in productiviy in the engineering industries. The problems may persist.

A special study by the Economic Planning Council in the light of the Government's fuel White Paper came to the conclusion that … some 35,000 additional jobs for men will be needed in the coalfield by 1975. The latest edition of Steel News, published by the British Steel Corporation, forecasts that it is aiming to raise production by 10 million tons by 1975. Manpower in the steel industry—I am referring to the national figure—is likely to go down by 50,000 overall.

There has already been considerable rationalisation in the Sheffield-Rother-ham area. Open hearth furnaces have been replaced by electric arc furnaces in Steel Peech and Tozer, English Steel Corporation and Samuel Fox with significant redundancies in manpower.

On the working side of the steel industry, we have recently had the formation of Sheffield Rolling Mills Ltd. in a combination of plant from the public and private sectors and this is likely to result in 300 redundancies in the next few months.

The same process has occurred in heavy engineering. We have had the takeovers by Dunford and Elliott of Had-fields, Davy Ashmore of Brightside Foundry, Firth Brown of Jessop Saville and the consequences for Sheffield of the national merger of G.E.C. and A.E.I., have left a modern 10-year-old factory worth £1 million up for sale, with at present no takers.

Also disquieting is the fact that certain of he more modern processes for example, the dynamo and electrical engineering work at the A.E.I. factory and titanium from Jessop Saville have gone from Sheffield to the West Midlands and other parts of the country. The process of modernisation and rationalisaion is not vicious in itself, and we must have competitive efficiency within this country and for our exports. However, it creates problems in regard to the redundancy of manpower and the need for substitute sources of work, and these must be studied and tackled.

I will suggest some ways in which these problems should be tackled. One of the characteristics of the South Yorkshire region is the important part played in its economic activity by the great public Corporations—gas, electricity, the railways, the Post Office, coal, steel and now the Land Commission. I believe that one approach to the solution of the employment problems in this area could arise from a positive drive for diversification by these Corporations of their activities, related, where possible, to local needs. We have seen how the Post Office has gone into the business of banking through the Giro, and computer work through the data processing services it now offers.

I believe that the important local problem of dereliction should be tackled. I should like to quote from a letter from the Clerk of the West Riding County Council to the Association of Municipal Corporations: There: is at present a general acceptance that dereliction, especially industrial dereliction, is one of the most important adverse factors which discourage new industry from coming to this region. There is a strong case for creating a publicly owned company, which would function as a joint subsidiary of the Land Commission and the Opencast Executive of the National Coal Board, for the purpose of reclaiming land made derelict by the industrial processes and extractive industries. The company thus created would function as a National Land Reclamation Agency, dealing with the problem of dereliction, and would progress to major schemes of land reclamation. There is scope also for the Coal Board to use the immensely valuable raw material which is its basic work by moving into the field of the chemical industry and diversifying into the production of chemicals.

There is a strong case for the Government's 85 per cent. grant, which now applies in the development areas, to be given in South Yorkshire because the problem of dereliction has got to be tackled where it exists, and there is a powerful case, in terms of the need for clearing up industrial dereliction in this area, for a more generous grant from the central Government.

There is no reason either why the British Steel Corporation should not diversify its activities from producing slabs, ingots and so on, to the fabrication of steel and thus replace the manpower which will necessarily be lost as the basic processes of producing steel require fewer and fewer men. I am sure that the other great public Corporations could also be encouraged in a practical manner to diversify their activities to provide employment where this is running down.

South Yorkshire needs not only manufacturing industry but public services. We have seen in the last couple of years or so the Giro go to Merseyside, the Mint go to South Wales and important sections of Post Office activities established in Chesterfield and Durham. National Insurance has been administered for a long time from Newcastle. The Gas Board has concentrated its computer administration at Leicester, and I am scandalised to learn that the Steel Corporation has put its new headquarters in London, at vast waste and expense, when it might profitably have established its central administration in the steel city of Sheffield.

The point that I am concerned to make is that as the public corporations and Government Departments decentralise some of their activities from London and the Home Counties, South Yorkshire should get its share. I hope, for example, that when my right hon. Frend the Secretary of State for Health and Social Security sets up his great banks of computers to run the new pension scheme, some of these computers might be located in Doncaster, Sheffield, Rotherham or Barnsley. I hope they will not all be installed across the road in Bridge Street. Thus I have suggested ways in which public corporations and Departments might create new employment opportunities in South Yorkshire.

The Government also have an opportunity and a duty to provide a basic infrastructure for the encouragement of private industry as well.

A group of my right hon. and hon. Friends has produced a valuable report suggesting, among other things, that R.A.F. airfields should be used for commercial purposes. I hope that the Government will consider the creation of an international airport in the West Riding in due course. I hope that the Minister of Transport will reconsider his decision not to improve the South Yorkshire navigation to Rotherham and Tinsley and thus create a water route direct from the industrial centre of Sheffield and Rotherham to the Humber ports.

On roads, we have excellent north-south communications with the Ml, Ml8 and the Al; but unfortunately the road communications to Humberside, to Hull in particular, and west of the Pennines are not satisfactory and urgently require strengthening and improving. To attract new industry, especially consumer industries like food processing and domestic durables, first-class communications are essential, and they are a basic responsibility of the central Government.

Another basic requirement for the diversification of industry in South Yorkshire, as elsewhere, is industrial training-opportunities for men coming out of the old basic industries to retrain for new jobs. I welcome the developments in this direction which have taken place in Sheffield. I note with satisfaction that there is to be future expansion in Wakefield. I believe that the Government have done a first-rate job concerning industrial training; but I hope that they will not be content with what has been achieved so far. I hope that they will build on it, develop it, and go forward. However, we do not want Government training centres to train people in bricklaying and carpentry. These are excellent biblical trades, with which I have no quarrel, but there is already great unemployment in the building and construction industry. We do not want Government training centres to train bricklayers and carpenters, excellent trades though they are, but to train people in engineering trades, instrumentation, electrical trades, radio and television. Those are the skills that we need.

The people in South Yorkshire are not just sitting down waiting for the Hunt Committee. I am sure that the Minister will have read the policy statement by a number of my colleagues, compiled specifically by my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling), in which a great many important points are made concerning the provision of new jobs, communications, airfields, roads, waterways and other matters to which I have referred. I believe that this is a valuable statement and I hope that it will be carefully studied by the Minister and his colleagues.

I should like now to refer to the activities and work of what has become known as the 44 Group. This is a consortium of local authorities extending over South Yorkshire and, to some extent, other areas as well, designed to concentrate the thoughts and activities of the local authorities on ways in which new industry can be encouraged to come to South Yorkshire, to survey industrial sites, to examine ways in which they can co-operate together to provide better industrial sites, to tackle the problem of clearing up the environment, and to examine specific local difficulties. The 44 Group has done a valuable job to date. I hope that it will continue its work and that, with a stronger administrative base, go on to further achievements.

We want an assurance from the Government that the needs of South Yorkshire will not be ignored when the recommendations of the Hunt Committee, whatever they may be, come to be worked out in practical detail.

11.15 p.m.

The Minister of State, Department of Economic Affairs (Mr. T. W. Urwin)

I am grateful, as I am sure the whole House is, for the very cogent manner in which my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) has recounted the difficulties facing the South Yorkshire region. It is a great pity that there were not more hon. Members on these benches to listen to the constructive arguments he raised.

As my hon. Friend said unemployment in some places in the area is high with a present average of 48 per cent. in the Yorkshire coalfield sub-division and higher levels in some of the small employment exchange areas. In the South Yorkshire sub-division, however, which includes the great steel and engineering centre of Sheffield, unemployment is not much above the national average, although this does not apply to Rotherham.

It is important, however, to keep these problems in perspective. Much of the high unemployment is of fairly recent origin. Hon. Members may assume that it is due in the Yorkshire coalfield mainly to the decrease in jobs in the coal industry. But this is only one factor—and not the largest as far as numbers are concerned. In the last year or so the sub-division has been affected more by loss of jobs in the construction industry than in coalmining.

By comparison the unemployment problem in the development areas is widespread and has been persistent over many years. The Government must therefore give priority to them. This is not to say however that we are not concerned about the problems of places like South Yorkshire. We most certainly are. It was because of the Government's concern for such areas that they set up the Hunt Committee to examine the problem of these areas, and to advise whether revised policies were necessary. The Committee received a very considerable volume of evidence about this part of the region—and subsequently visited it and talked to a number of local bodies.

As will be known, my right hon. Friend has recently received the Committee's report. It is now being urgently considered by the Government, so that following publication decisions can be taken on its recommendations without undue delay.

I have seen reports of the proposals which my hon. Friends representing constituencies in the region are putting forward, many of which relate to the South Yorkshire area. They will, of course, be taken into account in our consideration of the Hunt Report.

But although this debate is taking place in the shadow of the Hunt Report, it would be wrong to think that the Government have been sitting down idly waiting for the Report, as is sometimes suggested.

One of the main problems facing the area arises from the reduced number of jobs which are likely to be provided by the coal industry in future years. This produces basically the same sort of problems of adjustment to change as confront other industries and other parts of the country. But the process presents special difficulties in areas such as South Yorkshire which is so heavily dependent on coal for employment for men.

Yorkshire, however, has two important advantages not found in a number of other coalfield areas. First there are substantial industrial centres in the area and secondly it has an excellent geographical position which, with the completion of the motorway network, will make it a focus of routes from the North and South and across the Pennines and to the Humber. These are very real advantages which are not enjoyed by the more remote mining areas of South Wales, Western Northumberland and Durham, and parts of Scotland which are heavily, if not entirely, dependent on coal. Our task is to build up on these advantages. A great deal can be done by foresight and planning ahead. This is an essential part of the job of the regional economic planning machinery and much work has already been done by the Yorkshire and Humberside Economic Planning Council which was set up by the present Government in 1965.

As soon as the Government produced their White Paper on National Fuel Policy late in 1967, and some estimates of future manpower levels were available, the regional planning organisations got to work urgently to examine the job requirements in the Yorkshire coalmining areas. They not only took changes in the mining industry into account but also considered, as far as possible the likely changes in other industries and the prospective increase in the working population.

Hon. Members have probably seen the Report of the Economic Planning Council, which was published in May of last year. I think they will agree that it provides us with a sound starting point for planning for the introduction of more industry to the area. The Report gives an estimate of the number of jobs which will be needed in the coalfield from 1968 to 1975. This estimate will necessarily be subject to review from time to time, but the essential point is that we have a document which will be of great assistance in considering future industrial development in the coalfield area.

The Economic Planning Council recommends that in addition to the existing large industrial centres in and near the coalfield there should be established a number of focal points around which industry should be developed to provide additional jobs. It has emphasised the need for adequate retraining facilities in the area and for improved roads. I am grateful for my hon. Friend's acknowledgement of what this Government have done in industrial training. They also urge a big effort to reclaim derelict land which might otherwise hamper the necessary industrial development. Good progress is being made in following up this Report.

After discussions between the Departments on the Regional Economic Planning Board and the local planning authorities, the location of a number of focal points in the neighbourhood of Barnsley, Rotherham, Doncaster, South Elmsall, in the centre of the coalfield, and in the Castleford-Normanton area has been agreed.

The planning authorities are giving further consideration to requirements in the Wakefield and Dearne Valley areas. Honourable Gentlemen may have seen the Economic Planning Council's recent Press release about these developments. There is also the important question of how to get new industry into the areas designated as focal points and to promote expansion in the existing industrial centres in and around the coalfield.

I know that many people, including the Economic Planning Council and some hon. Members, consider that these will not come about unless the Government offer special inducements such as those available in the development areas. But this is one of the questions on which the Hunt Committee is giving their advice.

The Planning Council's Report on employment in the coalfield, to which I have already referred, was submitted to the Committee so that it was aware of the size and nature of this particular problem in preparing their Report. It needs to be emphasised that by beginning to plan early enough we have given ourselves time to consider the best course of action.

So far, as collieries have closed in Yorkshire it has been possible to transfer the great majority of miners to jobs in other collieries. The Planning Council has estimated, however, that some 35,000 additional male jobs would be needed in the coalfield by 1975 assuming no further migration from the area. In the Council's view, the need for new jobs will be at its greatest between 1971 and 1975 when they estimate that 7,000 extra jobs a year will be needed. For the period to 1971 they estimate a much lower rate of only 1,500 extra jobs a year.

I should like to turn now to action which is already being planned, designed to make the proposed focal points more attractive to industrial expansion. The Economic Planning Council has noted the progress which has been made, for example, in improving road communications. The Ml is now complete and so is the M18 linking the Ml and the Al south of Doncaster and Sheffield. More motorways are being built or planned. The M62 Lancashire—Yorkshire motorway will run across the north of the coalfield and will join it both to Hull and to the ports and the industrial areas of Lancashire. Another motorway will be built towards South Humberside, running from Doncaster via Thorne to the Trent just short of Scunthorpe.

The feasibility of improving the road links between Manchester and Sheffield across the Pennines is also being examined. Other improvements on roads in the coalfield are either in the programme or are being prepared. They include a number of by-passes of mining communities, better roads to give access to the new motorways and improvements to roads in the large towns. The greater part of industrial training must be the responsibility of industry and industrial training boards, but Government training centres are playing a small, although increasing, part in the training effort and contribute towards increasing the supply of skilled labour.

In the south Yorkshire area, the centres at Leeds and Sheffield are to be enlarged and a new centre is to be provided in the Wakefield area. When these are complete it will be possible to train 1,400 people a year, compared with 800 at present, and I can assure my hon. Friend that the trades in which training is given in these centres are chosen with close regard to the needs of local industry.

My hon. Friend made an interesting suggestion for a national land reclamation agency. Similar proposals have been put forward earlier by Lord Hayter and Lord Robens. I think we might wait and see what recommendations on this problem may be put forward in the Hunt Committee's Report which is shortly to be published. I am sure that my right hon. Friend the Minister of Housing and Local Government will be very ready to take my hon. Friend's suggestion into account, together with other similar pro-proposals, when the Hunt Committee's recommendations are considered in detail.

The Government are also now paying up to 50 per cent. of the cost to local authorities of clearing derelict land and there has been a marked increase in the number of schemes being put forward by the local authorities. This year the Ministry of Housing and Local Government expect a substantial increase in the number of schemes approved in the Yorkshire and Humberside region. can appreciate my hon. Friend's concern about the problem but the new system of grants has been in operation for under two years—since April, 1967—and I think we: need to give it more time before trying to assess the results.

As regards industrial distribution policy, the Board of Trade has administered the I.D.C. control very liberally in the region. In the last three years only one small application for an I.D.C. has been refused in the whole of Yorkshire and Humberside, whereas approved floor space amounting to more than 22 million square feet in the period 1965–67 was roughly twice as great as in the preceding three years. Thus, only in a very few exceptional cases have the Government made any attempt to limit the expansion of existing firms in the region.

My ton. Friend referred to the possibility of dispersing more Government offices to the area. We naturally have to give first priority to development areas in choosing sites for the dispersal of Government offices, but we also keep the requirements of other regions in mind. It was recently decided, for instance, to locate a large Inland Revenue office, dealing with Schedule E tax work at Shipley, near Bradford.

Another important industry in this part of Yorkshire which is facing reorganisation is steel, but full details of the British Steel Corporation's plans for the rationalisation of that part of the steel industry under their control are not yet available. The House will, however, know from the statement made by my right hon. Friend, the Minister of Power, in reply to a question on 22nd January, that it is hoped that normal wastage, retirement and controlled recruitment will provide for a high proportion of the expected rundown of manpower up to the mid-1970's arising from the Corporation's development programme and productivity bargains.

As my right hon. Friend then said, the Corporation have fully in mind the social and regional aspects of all its manpower plans and will undertake full consultations with the unions and local interests on individual proposals involving the loss of job opportunities.

The situation in South Yorkshire to which my hon. Friend has drawn attention in this debate is clearly one to which the Report of the Hunt Committee will be closely relevant.

The Question having been proposed after Ten 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-nine minutes past Eleven o'clock.