HC Deb 15 December 1971 vol 828 cc810-20

9.46 a.m.

Mr. Ernest Armstrong (Durham, North-West)

I welcome, even at this hour, the opportunity to make a special plea for a special area. I apologise to the Minister for extending the night shift so long in his case, but I know that he understands how desperately I feel about the situation in West Durham. The present situation is grim, and the outlook is bleak.

At the Meadowfield end of the constituency we have an industrial estate which desperately needs development. There are two untenanted factories there, one of which has been untenanted for over two years. Another, a modern new advance factory, is looking for a tenant.

At the Crook end we have two factories on the growing industrial estate also untenanted, and the news from the Advance Throwing Mills, which has made a significant contribution to the employment of male labour in the constituency, is that 180 redundancies are in prospect in the opening months of next year.

I do not want to deal with the broad aspects of regional policy. We have had a number of debates on that. I want to make a special plea in regard to the particular difficulties of West Durham, which presents a problem over and above the continuing problem of the development areas.

I was born and grew up there. One has to live in the area to realise how much we were dependent on coal mining. In the communities where I lived, unless one passed the 11-plus, it was taken for granted that all boys went to the pit. For long periods between the wars in village after village over 80 per cent. of the men were unemployed. That is an indication of the great dependence my area had on coal mines. The pit was the source of livelihood and the parameter of prosperity.

In 1955, which is not so long ago, there were as many as 26 coal pits in my constituency. Today there is only one, which shows what an accelerated rundown there has been in the main source of employment. The 1960s were for my area a period of running very hard in order to stand still.

Because of the accelerated pit closures during the 1960s, in the administrative county of Durham there were by 1969 a total of 33,400 fewer men employed than in 1960, and in 1970 and 1971 the situation has deteriorated tragically. During 1970 6,228 redundancies were notified in the county and in the first eight months of 1971 there were 9,518. The county planning officer estimates that by the end of the year over 14,000 jobs will have been lost in the county this year. The whole House understands what that means in terms of human misery, frustration and tragedy.

What has to be done? I want to say one thing only on broad policy which applies to all development areas. The Durham County planning officer, who has spent a considerable part of his life trying to attract new industry to Durham, says: The change in incentives introduced by the Conservative Government in October 1970 has contributed to the reduction in the flow of new industry to the County. Several promising projects were cancelled. That is not a mere opinion. It is based on fact and that judgment is shared by every section of the community in the county. It has become less worthwhile for new industry to move to development areas and this has made the situation in my area, a special area for which I am pleading, more desperate than ever. The truth is that even if the economy showed a very quick upward surge, even if we got the economic growth we all want, this would not solve the problems of West Durham. There would still need to be direct Government intervention in order to bring prosperity to the area.

Areas such as West Durham must have special discriminatory treatment to enable us to compete on equal terms even with other parts of the development area. The Labour Government recognised this and established the special development area. The whole of my constituency was immediately designated in the area because of the history and the long-term decline. The expansion by the present Government of these special development areas has been a serious blow to my constituents and to the industry of my area. The county planning officer gives chapter and verse and states that one good firm which would have provided employment has abandoned interest in West Durham because of the change. This is not an opinion. It is fact. The widening of special development areas to include even new towns and areas in the east of the county has diminished the attractions of areas such as mine and made a nonsense of the original concept.

The Under-Secretary of State admitted this last month, speaking to the Northern Productivity Association. He said that extending development areas does not provide more jobs but merely spreads those which exist more thinly at the expense of the worst-hit areas. I am pleading this morning for one of the worst-hit areas. This particular item of policy by the Government has been felt tragically there.

I have three suggestions to put. First, in an area like mine we need discrimination in our favour by Government instead of blanket incentives which are unselective and are Riven undiscriminatingly to any kind of firm. We need a labour-intensive type of industry. Where such new industry is available, the Government should not talk about percentages but should say, "This kind is the kind of industry which will meet the needs of West Durham because it will solve many of the economic and social problems there, and we shall work in partnership with it to establish a viable industrial project in West Durham." In Meadowfield we have a very good industrial site of 165 acres. The roads have been improved, I am glad to say. There is good access and egress. This matter needs selective intervention by the Government to establish labour-intensive industry which will solve the problems of West Durham.

We have a hard core of unemployed older men. At a labour exchange in my constituency, which serves no other constituency, one-third of the men on the register are over 50 and have been unemployed for more than 12 months. What prospects have they as they look forward to Christmas? None at all. No one can talk optimistically to them about the future. These are men, many of whom have served over 40 years in heavy industry. The Government should examine this because any man who has served more than 40 years in heavy industry ought to be retired on a decent pension and the industry in which he worked ought to be making a contribution to his pension. We must look at this business of putting them on the register.

I come to my last proposal. We have a low-wage economy in the North as against the average wage in the country. I do not know the entitlement to family income supplement in my area but I know that I have great difficulty in encouraging families who should be receiving it to make application. For obvious reasons the social security department is overworked and we have to wait some time for officers to deal with complaints. The same is true of the Supplementary Benefits Commission.

There is a great need for social work in my area and I believe that in such an area there is a case for the Government establishing a pilot project. First, it would enable us to employ some of our youngsters, who have stayed on at school to get "O" levels and C.S.E., in public work which will be satisfying to them and valuable to the community and secondly it would give help to an area which has been harder hit than most because of pit closures. West Durham has many problems because of the economic circumstances we have lived through in the past 50 years. There is a great opportunity here for extending public service to a pilot scheme whereby people could be employed doing valuable work bringing relief and hope to those who desperately need it.

My part of the country is attractive. We have done a tremendous amount in removing spoil heaps and so on. The Minister talked to those who had come to work in the city at the Post Office savings bank offices. They spoke glowingly of the area as being an attractive place in which to live. Bringing the Post Office savings bank there has been a great success. It is a neighbourly community because of our long traditions of heavy industry. Small communities breed neighbourliness that enhances the quality of life. The Government should will the means—there is no easy way out—which will assist us to help ourselves and to restore our prosperity so that our people may make the contribution they are anxious to make towards the economic well-being of the nation.

10.0 a.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)

Although the hour is late—or early, depending on one's view of it—I congratulate the hon. Member for Durham, North-West (Mr. Armstrong) on securing this debate and on the constructive manner in which he put his case. I am glad of the opportunity to discuss the situation in this part of Durham, which, as he and other hon. Members know, has had my close attention on a number of occasions this year.

The employment situation in West Durham varies considerably from district to district. In Durham and in the Bishop Auckland travel-to-work area the overall unemployment situation shows little change from 1969, although it is true that there has been a deterioration since last year. Indeed, in November, unemployment among men in the Bishop Auckland group was marginally lower than in 1969, and in Durham total unemployment at 4.9 per cent. is below the average for special development areas and, indeed, development areas. In the Consett group, however, unemployment has risen sharply this year and now stands at 8.4 per cent.

But, however one looks at the differences in the pattern of unemployment in the area, no one can possibly regard unemployment at the level it is in West Durham as in any way satisfactory, and I fully share and understand the hon. Gentleman's concern. But, as he fairly said, the area's problems are not new. It had to face more than its share of the rundown of the coal industry in the late 1960s, and this has left problems which have still not been satisfactorily resolved. The coal industry has passed through a more stable period recently, the last closure in West Durham being Tudhoe Park in May, 1969. This left seven collieries in the area as a whole employing some 2,700 men.

In spite of the programme of closures which the miners of Durham have had to face, they have set an example to many others by the splendid way they have accepted these changes. Less coal has been lost in the North-East from disputes than in any other part of the country, and for many years the region has had the lowest absence percentage. I feel sure that, but for the qualities of the Durham miner, this period of change, painful and tragic though it was, would have been very much more so.

The other major industry in which problems have arisen in West Durham is steel. He and other hon. Members know that it has been long and widely recognised that the British steel industry has to increase its productivity substantially if it is to face the strong and growing foreign competition. This brings painful decisions in terms of employment in all major steel-producing areas in this country, and I think that the same is true abroad. The hon. Gentleman will recall that, when the bulk of the steel industry was nationalised, one of the main reasons put forward in support of that Measure was that it would facilitate badly needed rationalisation. Previous Ministers have themselves recognised this. It is not, therefore, surprising that reductions in manpower are now taking place. Unfortunately, West Durham has not been able to escape these job losses, with the result that employment at Con-sett has fallen.

As the hon. Member knows, the future of individual steel works and the handling of manpower rundown are matters for the British Steel Corporation, as, in the first instance, are proposals for capital investment. But the corporation's future development programme is at present the subject of joint review by the B.S.C. and the Government. This is a highly complex exercise as a result of which it is hoped to agree guidelines for the Cor- poration's long-term strategy. It is bound to take time to complete, and it would be wrong to hurry it unnecessarily and risk taking wrong decisions in this key industry. My right hon. Friend the Secretary of State will make an announcement as soon as possible. In the meantime, I should make clear that there is no question of the Government holding back B.S.C. investment; the approved figure for the current year is the high one of £225 million.

Mr. William Ross (Kilmarnock)

rose—

Mr. Grant

No. I will not give way. Time is short, and I am dealing with the case put by the hon. Member for Durham. North-West.

The hon. Gentleman expressed concern about recent redundancies in West Durham and mentioned specifically those at the Advance Throwing Mills. I am well aware that any new redundancy is particularly unwelcome in West Durham. But, nevertheless, the decisions are for the commercial judgment of the firms concerned. In the case of Advance Throwing Mills, the demand for texturised yarns, which grew rapidly over the decade up to 1970, has slackened and there is now overcapacity. This has been particularly true of textured nylon, which has changed from being a speciality product commanding a premium price to a commodity traded on a bulk basis. While the outlook for texturised yarns seems now to be rather brighter, we must, I think, expect that they will increasingly be produced by the fibre makers rather than the independent throwsters.

The hon. Member emphasised the need to attract more new industry into West Durham to replace the loss of jobs in the older industries. I entirely agree, of course, that more new industries are needed in the area and assure him that the Government are doing what they can to interest suitable industrialists in locating new factories there. But we should recognise how much has already been achieved over the last decade or so. One tends to forget it. In the Consett group of employment exchanges the proportion employed in manufacturing industry and in the services has increased. I realise that to some extent these changes reflect a decline in employment in mining, but much is also due to the introduction of new industry—over the last ten years, for example, some 40 firms have set up in West Durham.

On the question of S.D.A. benefits, the area's special development status gives it very substantial advantages in attracting more new industry. One may take a view on how effective they are, but, nevertheless, the S.D.A. incentives include operational grants for incoming firms; rent free periods of up to five years in D.T.I. factories; building grants of 35 per cent. and for incoming undertakings, in certain circumstances 45 per cent.; and favourable tax allowances. In addition, grants and other assistance towards training is available from the Department of Employment.

The hon. Gentleman knows that he has heard all this before but I am constantly amazed to find so many people—including industrialists—who have not. I firmly believe that this package of incentives will prove very effective once the economy starts to grow at a faster rate and industrialists come forward with new projects.

On the question of blanket incentives, the hon. Gentleman suggested that blanket incentives are not sufficient and that there is a need to attract the type of industry particularly suited to an area. Our incentives are specially geared to encouraging new undertaking and providing employment. If the hon. Gentleman has any suggestions I shall be glad to consider them. I do not believe in being dogmatic on this. I would say, however, that the Department of Trade and Industry in the course of its daily work in suggesting locations in the assisted areas always takes account of the particular facilities available and the special needs of individual areas in conjunction with the specific needs of inquirers. In the final analysis it is for the commercial judgment of firms which of these locations will best enable them to succeed and provide stable employment. My Department is constantly on the look-out for growth industry with projects suitable for assisted areas; the measures we are taking to stimulate the economy will improve the flow of these projects.

The hon. Gentleman mentioned the dilution of incentives, which he claimed arose from the extension of S.D.A.s. At the time we felt it right to extend the S.D.A. benefits to those areas such as West Central Scotland where the problem of redevelopment and unemployment was proving intractable, and where unemployment was—and the hon. Gentleman must face it—on a drastically larger scale than in West Durham. But this did not imply any lessening of efforts to interest suitable industrialists in the Durham S.D.A.s. Having said this, I accept of course the point that we cannot extend assisted areas benefits indefinitely without diluting the degree of priority. We have to retain a balance in recognising the needs of areas with growing industrial and employment problems, while retaining the principle of priority. I agree with him entirely that there is no merit in extensive dilution.

On the specific point raised by the hon. Gentleman on advance factories, he will know that 22 advance factories have been approved in West Durham over the years; 16 are allocated; four others are complete and available for allocation and two more have been authorised under the rolling programme of factory building.

My Department is making every effort to interest suitable industrialists in these and other factories available in the area. The hon. Member referred specifically to the vacant factories on the Crook and Meadowfield estates. The Crook factories have been suggested by my Department to 31 firms and 13 of these have visited them, while the Meadowfield factory has been suggested to 14 firms. I am hopeful that once the economy responds to the Chancellor's measures, industrialists will come forward with new projects and the D.T.I. factories that remain empty in West Durham will then find occupants.

The hon. Gentleman then made the point that there was a special need for more work for the over 55s. I entirely accept his point that these men find it much more difficult to find suitable employment, even though they are often able to give many more years of service. It is the Department of Employment's general policy to encourage employers to engage older workers whenever possible and not to set age limits when notifying vacancies. The Department of Employment's facilities are fully available to help older workers find new jobs. Moreover, there are special arrangements whereby grants are available to employers in assisted areas who engage and train workers aged 45 and over and who have been unemployed for at least eight weeks.

The hon. Gentleman may like to know that in West Durham at the September count, of 924 workers unemployed through colliery closures or planned reductions in colliery manpower, 860 were over 55 and 661 of these were receiving benefit under the redundant mineworkers' scheme. He will no doubt know that my hon. Friend the Minister for Industry recently announced that the Government proposed to continue this scheme, although modified in certain respects, for men made redundant between March, 1972 and 1974.

As for the hon. Member's suggestion that men employed in heavy industry should be allowed to retire early, although this is not the occasion to go into this point in any detail, there would undoubtedly be many problems in discriminating between one industry and another in the pensions scheme. If the hon. Member has in mind the recent suggesions about reducing the pension age on the grounds that this would increase employment for others, this would of course be costly and of doubtful effectiveness for such a purpose.

The pension age is no more than the minimum age at which people can be paid the National Insurance pension if they choose to retire. The law does not compel anyone to give up work at any particular age. A change in the National Insurance pension age would not necessarily affect the time at which people retire; the practices of employers and those in occupational pension schemes have a great bearing on the time when people retire. A change in the national scheme would no doubt raise the need for modification of other schemes. Even if a change in the national scheme led people to retire sooner, it does not follow that the jobs vacated would meet the particular needs of unemployed workers in the right places. It is likely that a lower national retirement age would benefit occupational pensioners who retire at 60 more than those in manufacturing industry. I am grateful that the hon. Gentleman raised this point so as to enable it to be discussed.

The importance of a region's infrastructure is well known to the hon. Gentleman. He recognises, as I do, the dramatic change in the quality of the basic services in the North-Eastern region, including West Durham, in recent years in such matters as roads, communications, housing, schools and public buildings. This should be said because it is a major factor in attracting industry to the area. The hon. Member will realise that there has been a programme of additional public expenditure announced by my right hon. Friend the Secretary of State for the Environment amounting to some £30 million in the northern region on these aspects.

Likewise, in the matter of dereliction—which is important, especially in areas like West Durham, with its long-established coal mining industry—inroads are being made into this problem, backed by the 85 per cent. grants which the Department of the Environment are prepared to make available. I hope that local authorities in West Durham will be prepared to carry on with the good work that is being done.

In conclusion, I accept that unemployment in West Durham is high, and in places very high. It is right, even at this time of the morning, that the House should give careful consideration to it. But it would be wrong to ignore the more cheerful aspects. For example, jobs reported to the Department as expected to arise within the next four years in authorised new industrial building and existing buildings taken over by manufacturing firms in West Durham amount to over 5,000. This is separate from additional jobs in existing industrial premises and in the service industries. When set against even the current unemployment level of about 7,500, this is encouraging. I realise that there may be further job losses, and there are pockets of especially serious unemployment within the area where the immediate prospects are less hopeful. We shall continue with every effort to get the jobs where they are most needed. The measures which the Government have taken to improve the general economic situation of the country will, I am certain, make this task increasingly rewarding before long.

Question put and agreed to.

Adjourned accordingly at fifteen minutes past Ten o'clock a.m.