HC Deb 15 March 1971 vol 813 cc1147-58

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

3.15 a.m.

Mr. Gavin Strang (Edinburgh, East)

The high level of unemployment in the Edinburgh area at present is largely a reflection of the high level of unemployment in the United Kingdom as a whole. That is not the main reason. During the last three or four years there has been a sharp deterioration in Edinburgh's employment position, not only in absolute terms but relative to the rest of Scotland and to the United Kingdom.

In the course of this speech I want to make three points. First, I want to bring home to the Government how serious is the adult male unemployment position in the Edinburgh area. Secondly, I intend to ask the Minister if he will agree to reconsider the Government's decision not to grant full development area status to Edinburgh, and, thirdly, I would like to put forward a constructive proposal which I think will help to promote industrial development in the Edinburgh area. Female unemployment in Edinburgh has never been a problem. It has very rarely risen above 1 per cent. One of the reasons why the seriousness of Edinburgh unemployment has been underestimated is that often the female and male figures are lumped together.

The Minister will be aware that four months ago I submitted a memorandum arguing the case for granting Edinburgh full development area status. In that memorandum I predicted that within the next two years the rate of adult male unemployment in the Edinburgh area would exceed the Scottish average. That was an under-statement. The evidence that has come out in the last six months shows that the deterioration is, if anything, accelerating.

My memorandum dealt only with the three employment exchange areas in Edinburgh—Portobello, Leith and Edinburgh. What I did not say was that if we look at the employment exchanges just outside Edinburgh, the other four in the Edinburgh travel-to-work area there is an equally sharp deterioration in the employment position there. I am particularly concerned about Musselburgh because it is in my constituency, and as the Minister knows, there was recently a serious redundancy position there due to the closure of the Inveresk Paper Mill. In Musselburgh we are very concerned about the difficulty of getting alternative employment for these men.

If we look at the Edinburgh travel-to-work area and compare the position now with the last time we had high unemployment in Scotland, in 1963, we find that in January, 1963, the adult male unemployment level in Scotland was 7.1 per cent. and the adult male unemployment rate in Edinburgh was 4.6 per cent. When we come to January, 1971, the adult male unemployment level in Scotland was 7 per cent. and the male unemployment rate in Edinburgh was 6.5 per cent. That is a crucial statistic that brings out the sharp deterioration that has been taking place in Edinburgh's position relative to the rest of Scotland. If we go back about four years it will be found that 7 per cent. of all unemployed males in Scotland were in the Edinburgh area. That figure is now over 10 per cent.

It is inevitable that I should say something about the history of Edinburgh in relation to regional policy. In 1966 the Labour Government made the whole of Scotland, with the exception of the Edinburgh, Leith and Portobello employment exchange areas, a development area. In 1967 the R.E.P. became payable in the development areas. In September, 1967, the Hunt Committee was set up to look at some of the effects of development area policy. It is important to realise that Hunt said that R.E.P. and investment incentives had been operating for too short a time for it to reach any conclusion whether Edinburgh was suffering as a result of this discrimination.

Nevertheless the Government, following the Hunt Committee recommendations, decided to give Leith intermediate area status. I looked at the figures after Hunt and I made the point that we had this serious deterioration to which I have referred. I stated, "There may have been a case for giving Edinburgh less favourable treatment in 1966. There is certainly not one in 1970."

I come to the Government's announcement of last month. It was a bitter disappointment to the people of Edinburgh. We had hoped that the Government would give Edinburgh full development area status. It is reasonable to point out that with half of the population of Scotland in a special development area, Edinburgh is now worse off in relation to the rest of Scotland. The serious unemployment trend in Edinburgh is indisputable. There is absolutely no case for continuing to discriminate against Edinburgh. There is only one thing I want to ask the Minister tonight: will he undertake to reconsider his decision not to grant Edinburgh full development area status?

It would be quite wrong to give the impression that the deterioration in Edinburgh's position is solely due to a lack of Government assistance. On the contrary, the chronic shortage of space for industrial expansion in Edinburgh is at least as important a reason. We do not have one attractive industrial estate in Edinburgh available for incoming industry. Edinburgh Corporation has still not come to terms with the fact that Edinburgh is no longer a prosperous and expanding city. It has still to formulate a policy for industrial development. It could learn a great deal from the vigorous and imaginative efforts of the neighbouring local authority, Midlothian.

I want to stress that Edinburgh cannot promote industrial development in the Edinburgh area without the co-operation of the other local authorities. It is hardly a new point. It was made by Hunt and Nichols in their report on Edinburgh's economy in 1968, in paragraph 87. We cannot wait on the reform of local government until we get a proper policy for industrial development in the Greater Edinburgh area. It is for these reasons that I would like to propose that a Lothian Development Council be set up. The council would be a joint venture between the local authorities, local industry and the trade unions. Most of the finance would come from Edinburgh Corporation and the three Lothian county councils. I am sure it would have some Government support if it could get off the ground. I would be interested to hear how this assistance might be forthcoming because there are other bodies like this which get Government assistance.

Mr. Michael Clark Hutchison (Edinburgh, South)

Would the hon. Gentleman tell me how the finance would be raised?

Mr. Strang

Take, for example, the North-East Development Council in England. That is financed by one-seventh of a penny rate. Obviously, the bulk of the money would come from rates by Edinburgh Corporation and the Midlothian, West Lothian and East Lothian County Councils.

Mr. Clark Hutchison

Thank you very much.

Mr. Strang

The function of that council would be to formulate an industrial strategy for the region. It would make sure there were attractive industrial sites available in suitable districts. It would launch a publicity campaign to attract new industry and to handle inquiries from potential incoming industrialists. The idea would be to sell the region. We would not have the position of the sort we know has sometimes arisen of industrialists seeking to get in touch with Edinburgh but having difficulty in finding someone to talk to about getting satisfactory industrial sites. This body would handle all that.

Mr. Ronald King Murray (Edinburgh, Leith)

I am obliged to my hon. Friend for giving way. Does he agree that since Leith was given intermediate development status there has been very little sign that Edinburgh Corporation is prepared to assist opportunities which Leith might offer to industrialists coming in? Having spoken very eloquently of Edinburgh and district getting full development status, does he not agree that Leith has at least as strong a case as Edinburgh as a whole, if not a stronger case, in that, first, Leith has a greater proportionate number of unemployed industrial workers in the whole district, secondly, in that Leith is the only major port in Scotland which is not in a development area, and, thirdly, in that Robb Caledon is the only shipbuilder in all Britain—I think I am right in saying—which is not in a development area? Does my hon. Friend agree?

Mr. Strang

I was thinking of the development area status for Edinburgh as a whole, but I agree that that is particularly important for Leith because it is a port and because we have the Leith plan about to be embarked on which will almost inevitably allocate a certain part of Leith for industrial development.

I do not want to spell out in detail the Lothians council, but just to give an indication of the sort of thing I have in mind. Anyone interested in promoting industrial development in the Leith area would be eligible to attend it, and one would hope all such would attend full meetings of the council which would, perhaps, be quarterly, but the key group would be an executive committee which would be composed of local councillors and would include representatives of industry and the trade unions. The executive committee would require one or two full-time people to work for it. There would be a director and perhaps a couple of industrial development officers and a couple of public relations people. That is the type of thing we have in mind. It would be inevitable—absolutely crucial, I would say—that the council would work closely with the planning authorities in the area. Of course, when we do get reform of local government in 1975 the position of the council would be reviewed.

I have deliberately spelled this out in relation to Edinburgh and Midlothian and East and West Lothian because they would agree with this, and we could not at this stage take the proposed boundary for the south-east region, but I would suggest that it would be available for those areas and others likely to come into the south-east region, and that they would be anxious to come in.

I want to give the Minister plenty of time to reply, so I conclude by stressing that Britain as a whole—I do not criticise the Government for this—does not realise just how serious the unemployment trends are in Edinburgh. People still tend to look at Edinburgh as a great, prosperous, thriving city. I have asked the hon. Gentleman to reconsider his decision not to grant full development area status, and I hope he will be able to announce that he is prepared to do this. I know that a large number of bodies in Edinburgh, including Edinburgh Corporation, intend to make representations to him.

Edinburgh is not being parochial and is not unaware of the serious problems in the West of Scotland and Dundee. But Edinburgh can make a great contribution to the Scottish economy. Industrial development has been frustrated for artificial reasons, by Government discrimination, lack of planning and the failure of Edinburgh Corporation to have a proper industrial development policy. This is understandable, and is a reflection of the fact that Edinburgh has never had to bother about unemployment.

I have avoided making party capital out of this issue. I could remind the hon. Gentleman of the statements made in the General Election campaign and he could say that it was my Government which originally discriminated against Edinburgh. Edinburgh is not asking for special treatment; it is asking for parity with the rest of Scotland.

3.31 a.m.

Earl of Dalkeith (Edinburgh, North)

I agree with a great deal of what the hon. Member for Edinburgh, East (Mr. Strang) has said. His thinking has been running on parallel lines to my own thoughts on this matter. I hope my hon. Friend will also take into account some of my arguments in a recent debate about Edinburgh being promoted to development area status before the announcement was made. Since Leith has been promoted to intermediate status, the unemployment rate has risen faster there than in other parts of Edinburgh which were not so promoted. I am, therefore, dubious whether intermediate area status will produce the right answer.

I know it may sound rather grudging not to say "Thank you" to my hon. Friend for having taken a step in the right direction, but I still urge him to think seriously about rounding off the whole of Scotland and doing away with this anomaly which causes a great deal of annoyance and frustration. This would do a lot to rectify the very worrying situation of the high level of unemployment.

3.32 a.m.

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

I commiserate with the hon. Member for Edinburgh, East (Mr. Strang) on the uncivilised hour at which he has had to raise the extremely important matter which he has chosen for his Adjournment debate. The Government welcome any attempt by local authorities and areas to help themselves. We believe very much in self-help, and I listened with great interest to the hon. Member's ideas in outline for the Lothian development council. We shall watch with great interest how this develops to see whether it can be a useful vehicle. Anything which assists locally will have the keen interest of the Government. I recognise the concern felt by the hon. Member and by my hon. Friend the Member for Edinburgh, North (Earl of Dalkeith) about the level of unemployment in the Edinburgh area, and the way in which it has been rising over the past two years. But I cannot accept that on the evidence available it can be said that the outlook to Edinburgh would justify making the whole of this area a development area.

I ought to remind the hon. Member—I think he is well aware of it—that to a very considerable extent the current problems being experienced in this area date back to 1966 when it was decided to exclude the Edinburgh, Leith and Portobello employment exchange area from the newly created Scottish development area. Surrounded by the Scottish and northern development areas, with the nearest non-assisted area some 150 miles distant, this small enclave was left without any assistance for industrial development.

Indeed, assistance was available for firms to move out of the area and set up or expand in development areas. The Hunt Committee, which examined the situation in 1968, recognised that the area was undergoing a transition in role and thus the stresses created by this had been intensified by the pull of the nearby development area. But although the Hunt Committee recommended that the position in the area as a whole should be kept under review in case there was a sharp deterioration, the decision—which I regard as absurd—was taken to designate Leith alone as an intermediate area.

This resulted in a situation in which, of the seven employment exchange areas in the Edinburgh travel-to-work group, four were in a development area, one in an intermediate area and two totally excluded from assisted areas status—left between the devil and the deep blue sea. That is why we pledged ourselves to examine immediately the anomalous position of Edinburgh used by this decision. On taking office, this pledge was immediately honoured and we set in hand a searching examination of Edinburgh's problems.

The review of the position of Leith and Edinburgh was carried out in the context of our thorough-going review of regional policy. It was clearly quite imposible to consider their status in isolation from the cases of other applicants for assisted area status and more importantly the need to adjust the coverage of the assisted areas to take account both of the limited supply of mobile industry and of the very considerable changes that had taken place in the pattern of employment in recent years. After a comprehensive and detailed consideration of areas throughout the country, we concluded that the employment situation in the Edinburgh area justified some assistance for industrial development.

In deciding on the scale of assistance that would be appropriate to the area however, we had not only to consider the nature and magnitude of current unemployment problems, but also the prospects of the area, in comparison with those of other areas of employment need. Looking at comparative unemployment levels, the first consideration to be borne in mind is that the unemployment figures for the Edinburgh area cover the whole of the travel-to-work area, which, as I have already pointed out, impinges considerably on the surrounding development area. Thus, of the 10,910 unemployed in February, who give rise to the rate of 4.4 per cent.—that is, over all—nearly a quarter are registered in the development area.

Even taking the figures for the area as a whole, the recent levels of unemployment for the area, though certainly giving reason for some concern, have been significantly below those of the Scottish development area or of any of the other development areas, where the overall average in January was 5.2 per cent. overall. They are also less serious than those of a number of the intermediate areas; the Yorkshire coalfield, in February had 19,274 unemployed, a rate of 4.6 per cent., and North Humberside, 8,960, a rate of 4.8 per cent. And they are, of course, very substantially less pressing than in the new special development areas.

Mr. Clark Hutchison

Does my hon. Friend realise that no fewer than 42 firms have shut down in Edinburgh? Is that a satisfactory situation? I do not think his arguments are entirely valid.

Mr. Grant

I accept that the situation is serious. I was merely trying to contrast the position. We have to look at the whole country, and the situation is very much worse in the special development areas. The disturbingly high and persistent rates of unemployment in the older industrial conurbations in the development areas constitute the most pressing and immediate of our regional problems.

As I have pointed out, however, we have not only considered the unemployment situation in arriving at our decision; we have had regard to both the industrial structure and the prospects of the area. The Edinburgh area does not suffer from the problems of decline of traditional industries, decayed and out of date infrastructure and dereliction which beset the older industrial conurbations in the development areas, nor from the remoteness and decline in agricultural employment which has affected rural areas such as Mid-Wales or the Highlands and Islands. In point of fact Edinburgh has very considerable locational attractions for industry and as the political, administrative and cultural centre of Scotland has considerable prospects for growth of employment particularly in the service sector, which already accounts for over 72 per cent. of employment in Edinburgh compared with less than 60 per cent. in Scotland as a whole.

As hon. Members will realise, Edinburgh is a magnet for tourists.

Mr. Strang

My argument is about male unemployment. We have plenty of female employment in the service industries. That is what service industries mean. But we are talking about male employment in manufacturing industry.

Mr. Grant

I understand the hon. Gentleman's point. I take note of his argument in that respect. Nevertheless, Edinburgh is a tourist attraction, and this will help the overall unemployment figures to some extent. As I have said, Edinburgh has these new incentives as a result of the decisions which we have taken. What will these incentives do for Edinburgh? First, under the Local Employment Act, 1970, there is the building grant for the expansion of existing industry and the encouragement of new projects, the grant is available at 25 per cent. or 35 per cent. in certain cases. Taken together with the 40 per cent. initial allowance for tax purposes on new industrial building this provides a substantial contribution towards building costs and is a valuable incentive. Also we shall have powers under the Local Employment Act to provide Department of Trade and Industry factories, if the need arises, both custom-built and advance factories; and financial assistance, where it is considered expedient, will be available for the improvement of basic services, and to help towards the cost of acquiring and improving derelict land for which the rate of grant is 75 per cent.

As in the assisted areas generally, the problems of Edinburgh depend heavily for their resolution on a buoyant national economy. I am confident that once our measures to put the economy on a sound basis take effect—once firms can feel the economic climate is right for expansion and development without the perpetual worry that rising costs will nullify all their plans and forecasts—these incentives will be a very potent force in stimulating the provision of employment in the area.

It will not please the hon. Gentleman that I cannot immediately grant development area status. I repeat what the Secretary of State has said, that we intend to keep the position constantly under review. This is no holy writ about this position and we shall take note very carefully of what the hon. Gentleman has said.

Mr. Murray

I wonder if the Minister would deal with the development area, which is rather like a peppermint with a hole in the middle. The area entirely surrounds the Edinburgh and Leith district. Is there anything comparable in the United Kingdom?

Mr. Grant

Off the cuff, it is a unique area in more ways than one. We understand the problems, which is why the best that I can say on this occasion is that we shall keep the problem under review. But there must be some degree of certainty for industry to develop and to make its plans on our present proposals for the time being. I cannot hold out immediate hopes that we can do any more than we are doing at present.

Question put and agreed to.

Adjourned accordingly at sixteen minutes to Four o'clock a.m.