HC Deb 19 January 1970 vol 794 cc211-22

Motion made, and Question proposed, That this House do now adjourn.—[Dr. John Dunwoody.]

12.5 a.m.

Mr. Frederick Willey (Sunderland, North)

As I may be critical of an aspect of Government policy, I make clear that I have no criticism of the Minister of State; in fact, I have every reason to appreciate what he is doing for the development areas. I equally appreciate the Government aid that is given to the development areas. With 11,500 people employed in Government-owned factories in Sunderland, we have every reason to appreciate Government aid. As I have previously emphasised, this Government have given more massive development aid than has ever been given before.

I am not critical of the introduction of an element of selectivity. I have consistently argued that development aid is too diffuse and not sufficiently specific. I am critical, however, of the special development area policy. This was the introduction of additional incentives to areas of exceptional high unemployment through pit closures and a year after it was introduced this was extended to the case of Millom which did not suffer from pit closures, on the ground that it was suffering from a very high level of unemployment.

What the Government then said was that they would consider other cases on their merits. My criticism is that the Government have not done this. They have not considered other cases on their merits. I am also critical of some aspects of the policy itself. I do not think it was properly thought out. I think that in many respects it is a negation of planning; certainly a negation of regional planning. I think it has been unimaginatively administered and largely ineffective.

I want to deal with these criticisms in the context of the Northern Region, particularly Sunderland. I am not being parochial for I include the whole Wearside industrial complex. I am sure that my hon. Friend the Member for Sunderland, South (Mr. Bagier) will be anxious to support me in calling attention to the effect of Government policy on Wearside.

I warn my hon. Friend the Minister of State not to call in aid Mr. Dan Smith and the Northern Economic Planning Council, because I have repeatedly made it clear publicly that I am very dissatisfied with the council. That is one of the reasons why I have been anxious to raise these questions tonight.

I have said that the policy was not properly thought out. I want to illustrate this with a few examples from the Northern Region. Haltwhistle is a special development area. The Government were concerned with pit closures. We are therefore concerned with male unemployment. At the time it was designated, Haltwhistle had 2.7 per cent. unemployed. That was considerably less than the regional average. At that time, Sunderland had three times the rate of unemployment that Haltwhistle had. Sunderland now has about three times the rate of unemployment of Haltwhistle. This makes nonsense of Government planning from a regional point of view.

Take another example, Washington New Town. The line dividing the special development area from the other areas runs bang through the middle of the new town. Therefore, although the industrial location has been decided for Washington, if there is industrial development in one half of the town it has the special additional incentives, but those are lacking if the development takes place in the other half of the town. This can only distort planning for the new town.

I am more concerned about the effect upon the development area as a whole. Almost the whole of the middle of the North-East development area—that is, very largely the Wear Valley—has special development area status. Although Sunderland is at the mouth of the Wear, however, it does not have the advantages of that special area status. Thus, the whole of the central area of the region is designated except the industrial hub and pivot of the area, although all the communications and roads centre on Sunderland. It is absolute nonsense to say that we are providing additional incentives for industry to go up to the Pennines to the disadvantage of Wear-side and Sunderland. It is stupid to say that we are giving incentives for industry even to go to "D" villages at the expense of the centre of that area—Sunderland and the coast.

Even the more immediately surrounding areas—Chester-le-Street, Birtley and Houghton-le-Spring—had about half the unemployed rate which Sunderland had when they were designated with special area status and, hence, entitled to additional incentives. Even now—I am sorry to say this—those areas have similar unemployment rates to Sunderland, but this is no reason for the discrimination against Sunderland. It is an illustration that the policy has so far been ineffective.

It is sometimes said that I have been dealing with percentage rates and not overall numbers. Taking the overall numbers, however, for the central area of the Northern Region, one finds that the numbers unemployed in Sunderland and the Wearside area are about the same as those for the rest of the Wear Valley. It is again, from a planning point of view, stupid to say that where the unemployment is concentrated, the special aid will not be given.

I have also had brought against me the argument that we should have more travel-to-work in the Northern Region. As I have previously pointed out, in Sunderland we have a record of a large proportion of the industrial population travelling to work. When the then Parliamentary Secretary to the Board of Trade replied to a debate on Sunderland she pointed out that 16,000 people travelled out of Sunderland to work. The figure given in the census and previously relied upon in the Maud Report was only 10,000. So there has been a considerable increase in the numbers travelling out of Sunderland to work, but if we are talking of travelling to work we should be concerned about the direction in which people travel.

We have to think of the investment which we have made, too. We have a shopping centre in Sunderland which has cost £3½ million; we have got the central redevelopment; we have got all the Government aid which has been provided for Sunderland. Surely, if we are to talk of travel to work it is much more reasonable to talk about people travelling into the Wearside area, rather than out of the Wearside area into the less populated parts of the region.

Again, if we carry the argument this far, the reply I have had hitherto has been, "Well, what will other towns do if Wearside gets special development area status?" I would say, in response to that, let other towns establish a case such as Sunderland and Wearside can establish. Tell me of any other town in a development area which is the hub of a whole part of the region and where the rest of the area has special status but not the hub.

If we look to Sunderland itself, again there are overwhelming arguments for granting Wearside special area status. We have had an advance factory, now empty for years. It would have been far better to have had someone occupying the factory even if free of rent. It is largely because, as I have emphasised, we have already got trading estates in Sunderland. We have got substantial Government investment. Therefore, we ought to have additional incentives to see we get employment, following them.

Again, there is the argument about the miners. But we have got, as I have pointed out before, about 400 miners unemployed in Sunderland and a rate of unemployment among miners which compares with the special development areas. We have neighbouring Sunderland three pits which have been closed. If the designation is made on the basis of unemployed miners, we have a case for Sunderland. However, what I would emphasise to my hon. Friend is this, that a man is unemployed because he is unemployed; that is what matters, not whether he is a miner or a shipyard worker.

I remember writing, 15 years ago, "Plan for Shipbuilding". Most of the things I recommended then have been implemented, largely by the present Government. I argued then that there were to be jobs for far fewer men in shipbuilding, and I was rash enough to quantify this and to give the number of shipyard workers I expected to be redundant. The Economist criticised me at the time for daring to make such a specific forecast. Well, the forecast has proved right, notwithstanding the boom, because one could anticipate the boom as essentially it is based upon obsolescence.

But what I argued then was that because this redundancy could be foreseen we ought more resolutely and effectively to deal with the problem of the location of industry. This ought to have been done before the present Government took office, but the fact that it was not done by the previous Government is not sufficient reason for its not being done now. Surely, what is good for the miners is equally good for the shipyard workers, and redundancy among shipyard workers is far more concentrated than it is among miners.

I conclude by saying that I feel that on these grounds the special development area policy, at any rate so far as it is applied in the northern region, ought to be revised. I do not quarrel in principle with this approach. I believe that there should be a concentration of effort within the development areas, but this concentration should bear relation to the regional factors and be in line with regional policy. It should be much more comprehensive than the special aid now given.

If one considers special problems of particular areas within the development areas, one should consider also such matters as the selective raising of the school-leaving age and freight rates. I know of a firm which did not come to Sunderland because of freight rate difficulties. We talk a good deal about infrastructure, and this matter should be considered in a concentrated way. I know of a firm that did not come to Sunderland because of difficulties about water. As we have argued before, Government contracts should be more discriminatory.

However politically biased he may be, I do not think anyone can quarrel with the proposition that if considerable public enterprise goes into the construction of buildings which are not used, we should consider the use of those buildings and production by public enterprise. All these things can be done, and are acceptable if the case can be proved of particular difficulties in particular areas.

I think that the case is amply demonstrated. I appreciate the difficulties of my hon. Friend and his sympathy with regard to the problems of the development area, but I hope he is able to reassure by hon. Friend and me that—along with the Secretary of State who has responsibility for regional planning—he will review development area policy in areas such as Wearside.

12.22 a.m.

Mr. Gordon A. T. Bagier (Sunderland, South)

I am grateful to my right hon. Friend for raising this subject tonight, and I hope, in the few moments at my disposal, to underline and fully support what he has said about special area development policy.

I, too, do not disagree with the idea behind the Government's special area development policy. This was to deal with the specific problem of mining closures, but after that problem has been partially dealt with there remains the question of Government planning apart from that specific problem.

If there is a special problem in a particular town at the mouth of the Wear, then aid could and should be given. It is not a question of denying aid to Sunderland, but of putting it in a disadvantageous position compared to other areas. Only by realising the potential of Sunderland and by giving it as much aid as possible can we ultimately determine the future of Washington.

Less than a year ago, when my right hon. Friend and I took part in a similar Adjournment debate, we were told that we would probably have to look to Washington for our salvation. A large part of Washington has special development area status and is receiving many new factories and new jobs. Sunderland may have to look towards Washington to solve some of its problems if for no other reason than a shortage of building land to provide the jobs required in the town. There is 50,000 sq. ft. of factory accommodation standing empty, as it has done for 2½ years, and 15,000 sq. ft. and 25,000 sq. ft. of factory accommodation is being built.

These factories should be occupied. We suggest an extension of special development area aid to see that these places are filled. As I see Washington and Sunderland, it would be foolish to plan Washington as a new town, both industrial and domestic, and build all the houses required for the workers in these factories, without looking towards the potential dormitory aspect of Sunderland, just a few miles away.

The importance of our problem is paramount. As I pointed out a year ago, one should consider this problem not just in terms of percentages but in human terms—of the number of men chasing each vacancy. For example, when we examine the special development areas we find that in South-West Durham there are 33 men chasing each vacancy; in Chester-le-Street the comparison is 26 to each vacancy; North-West Durham, 11 to one; and South-East Durham, 29 to one. On the other hand, in Wearside there are 61 men chasing each vacancy.

This is a critical problem. In the recent words of Lord Robens, it is to be hoped that the problems of the mining industry are levelling out. However, if the problems I have described can be considered in the context of planning, as against the particular problem of solving the difficulties of the mining industry, it is to be hoped that something urgent will be done for Wearside and Sunderland so that its extremely bad unemployment problem can be overcome. I hope that the Minister will give us hope for the future.

12.26 a.m.

The Minister of State, Ministry of Technology (Mr. Eric G. Varley)

I am glad that my right hon. Friend the Member for Sunderland. North (Mr. Willey) has taken this opportunity to discuss special development area policy. I have been in my present office for only three months, but during that time my right hon. Friend has pursued me with vigour and it might be helpful if, before dealing with the specific points that have been raised in this debate, I commented on the policy generally.

The creation of special development areas has been one of the more important initiatives taken by the Government in the sphere of regional policy since the Industrial Development Act came into force.

Even after two years, it is probably still too soon to judge the full effects of the special development area incentives. Nevertheless, while I recognise the reservations which my right hon. Friend and my hon. Friend the Member for Sunderland, South (Mr. Bagier), have expressed and with which I will deal, I believe that the special development area benefits are helping greatly to ease the economic, social and human problems of the areas which are worst hit by the run-down of employment in the coal industry.

It might be helpful if, first, I described how and why the special development areas came into being. In the November, 1967, White Paper on Fuel Policy the Government accepted the National Coal Board's view that there would have to be an accelerated rate of rundown of employment in the coal industry. The White Paper pointed out that, while the major part of the expected rundown would be covered by natural wastage or redeployment within the industry, the decline would be felt most acutely in some of the development areas and that there were certain coal-mining areas where general measures of assistance to the development areas as a whole were unlikely to be sufficient. The reasons for this were explained in paragraph 124 of the White Paper.

Thus, the Government recognised that the rapid rundown of employment in coal mining would create economic and social problems of a special order in certain parts of the development areas and that these special problems called for special measures. It is important not to lose sight of the essential purpose for which special development areas were created. It was not that we felt that the ordinary development area measures were failing to achieve their aims. Nor did we think it appropriate to extend special development area benefits to major industrial centres like Clydeside, Tyneside or Teesside, places where, although unemployment remains substantially above the national average and greater than the Government wish to see, industry is already well diversified.

Nor were the measures introduced to top up the incentives available in any area which had difficulty in attracting new firms. We were concerned with what was, quite simply, the particular unemployment problem arising from the accelerated rundown in coal mining in the places where male employment was then overwhelmingly dependent on coal mining and which were in many cases situated at some distance from the main centres of industrial expansion.

The areas chosen were places particularly hard hit by colliery closures where, unless further measures were applied, unemployment would be likely to rise to a very high level and persist for some time. At the time of the announcement, my right hon. Friend the then President of the Board of Trade, whose functions in this connection have now been transferred to my right hon. Friend the Minister of Technology, made it clear that these were intended to be short-term measures which would apply only so long as the employment needs of the areas in question continued to justify special assistance.

My hon. Friend the Member for Sunderland, South warned me not to mention Mr. Dan Smith and the Northern Region Economic Planning Council. However, in fairness to them, I must. To date, the Council supports the Government on this matter. The Northern Region is the one currently bearing the brunt of the loss of jobs in coal mining, and perhaps in passing the House will allow me to pay a tribute to the realism and responsibility which the Council has shown in drawing attention to the needs of the area and the rightness of the policy so far in its recently published "Strategy II".

If time allowed, I could deal with incentives—

Mr. Michael Shaw (Scarborough and Whitby)

Would not the hon. Gentleman agree that, without the help which has been given, there would have been a much worse situation than there is? Does not the experience show that no such policy for special development areas can succeed unless it is handled against the background of an expanding national economy, instead of the perpetual squeeze and stagnation that we have seen?

Mr. Varley

I am sorry that I gave way to the hon. Gentleman because he is making a party point. The measures that we have taken have been taken in a national context.

Coming to the effectiveness of the policy so far, as I said earlier, it is still too early to judge the effect of these measures. It will always be difficult to make a definitive assessment, if only because we can never be certain what decisions firms would have taken if special development area incentives had not existed. Nevertheless, we believe that these incentives are now exerting an influence. They are effective, and we have only to look at statistics to show that that is the case.

My right hon. Friend referred to the specific case of Millom, saying that it was exceptional. I readily acknowledge that. It was an exception, to deal with the isolated position of Millom, where there was a very bad position. The Government realised that it would be difficult for a remote area to attract new industry on the basis of ordinary development area incentives, and Millom was designated to deal with an exceptional situation.

We are doing everything that we can to get a tenant for the advance factory, and we will continue to do whatever is possible.

I fully recognise the concern which my right hon. Friend and other local representatives feel about the exclusion of Wearside from special development area benefits. This is a matter to which my colleagues and I have given careful thought on numerous occasions, and we shall continue to do so. Unemployment on Wearside is far higher than any of us would wish to see.

Although, fortunately, it is not as high as in many pockets and coal mining villages and townships in other parts of the Northern Region, it is still large. Although there have been pit closures on Wearside, and coal mining still provides nearly 20 per cent. of local employment, the area has a reasonably wide spread of industry with 41 per cent. of males employed in manufacturing. Unlike many special development areas in the Northern Region and elsewhere, Wearside enjoys good communications and ports facilities. I believe this to be very important and it will help my right hon. Friend, but we are keeping a close watch on the situation.

Many of the difficulties mentioned this evening arise from the fact that there is only a limited supply of mobile industry. Given that there is not enough mobile industry to go round to meet all the needs of assisted areas, any pattern of assistance will lead to certain places getting less than they want. However, I can assure my right hon. Friend and my hon. Friend and others who may be concerned about the implementation of the special development area policy that we shall continue to keep a particularly close watch on progress in the special development areas and on their impact on the rest of the development areas, and that the points which my right hon. Friend and my hon. Friend have made tonight will be fully borne in mind.

Question put and agreed to.

Adjourned accordingly at twenty-four minutes to One o'clock.