§ 12.21 a.m.
§ Mr. Harold Walker (Doncaster)Fifteen years ago the annual average rate of unemployment in Doncaster was 1.3 per cent.—as near full employment as anyone can reasonably ask for. But 576 since those halcyon days the position has deteriorated at an increasing and recently alarming pace.
The most recent edition of the Department of Employment Gazette shows that the level of unemployment in the Doncaster travel-to-work area for May was running at 6.2 per cent., which is almost the same as the rate for the development areas in the same month. That was not a freak month. The same comparison could have been made at almost any time during the last 18 months. Admittedly, the most recent employment exchange figures show an improvement, but it is equally true that the winter figures were very much worse, and the undeniable fact is that the trend sustained over several years is a progressively worsening one.
Doncaster is faced not with a temporary recession that will melt away as the Chancellor of the Exchequer's measures filter their way through the economy, but a slide into chronic high unemployment; that is, unless there is intervention to change the pattern of development.
Three years ago the Yorkshire and Humberside Economic Planning Council carried out a study in depth of the Doncaster area. It accurately prophesied the present bleak unemployment level of roughly 6,000 people out of work. More grim still is its further forecast that unless action is taken there will be a possible shortage of 10,000 male jobs within the next three years. It was this grim spectre of 10,000 men on the dole that spurred the Mayor of Doncaster to lead a powerful deputation to the Minister's office last year. For all the effect that it had on the Minister the members of the deputation might as well have saved their train fares.
Since then the picture has become even more bleak. The Doncaster Ford factory—Yorkshire's last link with the motor car industry—is closing, with the loss of about 200 jobs. When I checked today on the latest position, I learned that some of the redundant men had been sufficiently fortunate to find jobs as milkmen. But they are the lucky ones. For the others there is nothing—and they still have to be added to the unemployment totals. A further 450 jobs are under the axe because of the restructuring of British Rail administration. 577 National Carriers Limited has recently declared redundancies consequent upon the rationalisation of freight handling.
I learned only tonight from the local newspaper, the Doncaster Evening Post, that the Volkswagen depot in the constituency of my hon. Friend the Member for Don Valley (Mr. Kelley)—who is in his place and hopes to catch your eye, Mr. Deputy Speaker—employing 80 people, is to be transferred to the new town of Milton Keynes.
ICI Fibres is one of the town's major employers, and there is no secret about the shadow cast over that industry by Japanese imports. I can only view with disquiet and anxiety the future of coal and railways, two major industries on which the town is heavily dependent.
Added to all this is the inevitably adverse effect of declaring the whole of Lancashire and Yorkshire to be intermediate areas. I do not criticise that decision since I think it was right. But we cannot ignore the consequences of this so far as the former, more limited, intermediate area is concerned.
Doncaster and the neighbouring areas have a more pressing need of assistance than almost anywhere outside the development areas—and indeed a greater need than a good many places within the development areas, a need which was recognised by giving the Yorkshire coalfield a preferential status over its neighbouring areas. But that advantage has now been taken away. We are left with bleak prospects indeed. All the Minister can offer in reply to questions about future job prospects is a vision of no more than 2,000 jobs—new jobs—in the foreseeable future. If the situation is gloomy, it is also enigma. There is a contradiction in so far as the area seems to have all the conditions necessary for economic growth.
The economic planning council says that it is a youthful, modern and dynamic area. It has excellent road communciations, equally excellent rail communciations and there is rapid access to the main consumer markets in the country. It is located on one of the most important inland waterway systems in the country and it has good access to the principal ports. Energy prices are lower; water prices are lower. There are plentiful supplies of sand, gravel and lime- 578 stone. The housing stock is modern. There is a modern shopping and services centre, a plentiful supply of land and—need I say it—a plentiful supply of labour. In short, and in theory, we should have it "made".
Since the 1920s report after report has predicted a rosy and prosperous future for the Doncaster area, but we seem fated always to be a bridesmaid and never a bride—and why? Probably if the enonomy were shaped by free market forces, and those alone, the oft-predicted boom would occur. But with the exception of a few eccentrics, in these days none of us, least of all myself, believes in the unbridled operation of the market. We are all interventionists more or less, and the powerful inducements given to the development areas have weakened the strong natural pull of London and the South-East.
It is not only the magnetic poles of the development areas on the one hand and the industrially sought-after South East on the other that has been draining Doncaster's strength. We have been disadvantaged by an unsympathetic attitude towards the issue of IDCs in the past. We were struck a cruel blow when the Government in 1963 turned Fords from Doncaster to Halewood and deprived us of our car industry.
I think the time has come when we in the area are wholly justified in asking that the power of Government intervention, which up to now has been used in a way that has stunted Doncaster's natural growth, should be turned to repairing some of the damage that has been done.
The economic planning council's study makes it clear that there must be intervention by the Government if we are to close the 1975 job gap of between 6,000 and 10,000. There is little hope of jobs being generated locally. The Planning council expresses the view that the forecast shortfall in employment will have to be filled by incoming industry.
The council goes on to say that this will be accomplished only by an early and determined effort on the part of central and local government to induce industry to settle in and expand in the area. I believe that local government is playing its part. It has established. 579 among other things, a vigorous departmental council with a full-time professional staff. Now we are asking the central government to act to avert a black future for our area. We are urging the Government to do what commonsense decrees: fully to utilise our infrastructure investment which I have described and our natural advantages.
Why cannot a start be made by diverting some Government offices to the area? I know that much has been done in dispersing Government offices, but we are a long way from exhausting the scope. There are the additional jobs created by VAT. There is no reason why many of these could not be done as well in Doncaster as in London. Why must the regional offices of Government Departments be located in places such as Leeds? Doncaster is just as central for their function, and at least as good from the point of view of communications. Why must the headquarters of the nationalised industries be in London? Why are their administrative functions concentrated here? Just to select one example, the National Coal Board must have hundreds of jobs which could be done as well in the centre of Britain's coal mining, in the heart of the Yorkshire coalfield, as in London.
It is this kind of service industry that we need so badly. Above all, if we are to attract the new industry that we need—and that the Yorkshire and Humberside Economic Planning Council says that we need—and to have the inducements to do so, we want development area status. I believe that our case for this is at least as strong as that of the present development areas, and certainly stronger than was theirs when they were created.
§ 12.31 a.m.
§ Mr. Richard Kelley (Don Valley)I am grateful to my hon. Friend the Member for Doncaster (Mr. Harold Walker) for giving up a little of his time to allow me to say a few words in this debate. However, after the news this morning about the attitude of the West German Government to regional policy, one wonders whether our cry should not go out to the Bundestag or perhaps to the Council of Ministers in Brussels.
My constituency surrounds the borough of Doncaster. Through the Don Valley is the only way in and the only way out 580 of the borough of Doncaster. It is understandable that my hon. Friend and I have a great deal in common when we consider this problem of unemployment. We are what is known as a travel-to-work area. This was a device of the Department to try to reduce the percentage of employment by applying the same common factor to a greater number. But we are not really a travel-to-work area in this sense. We are a travel-to-the-dole area. The phrase has come to mean a concentration of employment exchanges where people sign on for the dole.
Like my hon. Friend, I believe that development area status is essential for the future wellbeing of our area and to restore some of that economic virility with which our district was associated a few years ago. There is no doubt that new industry of the modern technological age is what Doncaster requires, and this means a great deal of effort on the part of the Government to steer industry in this direction. That means full development area status.
In the meantime, there is a great deal that can be done. We are largely dependent upon coal. The commercial life of Doncaster is prosperous when coal is prosperous. The Government should make an announcement as early as possible that the new power stations to be built by the Central Electricity Generating Board should be coal-fired. This would do a great deal to restore some of the lost confidence in coal which has rubbed off on to the economy of the area as a whole.
It would also bring a lively interest into the area if an announcement were made by the Government that the £2½ million scheme for the improvement of the canal system was about to be approved. It has been in the hands of the Department concerned for long enough. It should have made up its mind by now. This scheme would enable canal boats to travel from just below Sheffield into the Continental canal system and, through that, up to the Danube. It would open up enormous opportunities for certain types of export industries already in the area and many that we hope to attract. With development area status, there is no doubt that Doncaster would soon appear to be the type of area which industries would find attractive.
581 We hear a great deal about the wonderful opportunities that Europe will open up for us when we get into the Common Market, which apparently requires the Government to scrap their Industry Bill and to get the £ back on course.
But these opportunities, if they are there, cannot be taken unless we as a nation are equipped to take them, with all our resources harnessed to play their full rôle. How can we do this if we let an important centre of industry and some of the best working-class people in the world wither and die because of some cockeyed investment policy? No nation can afford to keep people in idleness who are willing and able to work, but that is happening in the Doncaster area—as, I admit, it is happening in other places. It is just because this Government have no coherent economic policy to bring jobs to the people that this sorry state of affairs exists in the area represented by my hon. Friend and myself.
My experience of unemployment makes me realise that our people will demand that something is done. Those who cannot do it will have to get out of the way, because the people themselves will take some action to see that it is done.
There is no more despairing sight than that of a young boy or girl who, after having left school with all the hope and vigour to take up the challenges of the brave new world, is rejected time after time at the factory gates in my area and that of Doncaster borough. These young people are rejected until they drift into demoralised idleness or find some dead-end job. We have too many cases like that to deal with day by day. There are too few opportunities for the young people to take up responsibilities to enjoy the dignity of labour and acquire the skills of industry.
The Government should forthwith make an announcement that it is their firm intention to site a new training centre in Doncaster. New industries will require new skills, and we have a duty to our people and those who will come after them to train the young people of today so that they can play their proper rô1e in building tomorrow.
§ 12.38 a.m.
§ The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)I congratulate the hon. Member for Doncaster (Mr. Harold Walker) on obtaining this opportunity to discuss the very real difficulties faced by the Doncaster area. It is an opportunity—albeit slightly shortened—that allows me to emphasise once again the substantial nature of the new regional measures that we have proposed. The hon. Member has in my opinion, given a fairly comprehensive picture—perhaps a little bleak—of Doncaster's problems, although I think that in some respects he and his hon. Friend the Member for Don Valley (Mr. Kelley) may have underestimated the area's natural advantages and the resourcefulness of its inhabitants.
The first point that I want to make is that Doncaster's problems are fully recognised by the Government and were not overlooked in the review of regional policy earlier this year. As the hon. Member knows, the conclusion of that review was that intermediate area status should be given to the whole of the Yorkshire-Humberside region but that no part of it should be upgraded to development area status. I shall now go on to explain the reasons for that decision as it applies to Doncaster.
In making decisions on assisted area status my right hon. Friend is required to have regard to all the circumstances, both actual and expected. I say that to emphasise that such decisions are not based on a simplistic head count of the unemployed. That is an important factor, but we must also take account of the future prospects of a particular area with a view to judging whether it has inherent disadvantages on a sufficient scale to justify regional assistance to encourage industrial development. We have also to bear in mind that assistance given to one area is a penalty for another. If we assign priorities indiscriminately we shall negate much of the benefit of the regional measures we employ.
We reached the conclusion that the problems of the Doncaster area should be capable of resolution by the combination of its natural advantages and the new regional measures which we are now introducing for intermediate areas. We 583 did not consider it right to assign the area the same priority as the development areas where the problems faced are such as to require more drastic solutions.
How did we reach this conclusion? First, it was clear to us that Doncaster had no inherent drawbacks as a site for industrial development. Indeed, it had many advantages, particularly in respect of location and load communications. In many ways the town could be said to be located in a central position in the British industrial economy. Taking into account future road developments, the communications compare favourably with almost any other part of the region or, indeed, of the country as a whole.
In that respect the hon. Member for Don Valley found that the only point of criticism on that score was the canal system. I am sure that what he said on that subject will be noted carefully, and I will draw it to the attention of my right hon. and hon. Friends in the Department of the Environment.
We agreed with the Yorkshire and Humberside Economic Planning Council's view that this area was a suitable centre for natural industrial growth; but we recognised that the area had some ground to make up because of the pattern of industrial development there in the past. The area has, however, had the advantage of intermediate area status since early 1970, and we felt it right and sufficient that it should continue to have such status until its industrial structure and prospects had improved considerably. That view was not, of course, taken in the abstract; it was very much based on our revision of the incentives that will now be available in the intermediate areas.
The measures that we shall be devoting to help intermediate areas should not be under-estimated. Regional development grants, at the rate of 20 per cent. towards expenditure on industrial buildings, will be available in the area. These will now apply to existing firms as well as to new enterprises and to the modernisation of premises as well as to new construction.
The specific intention here is not to concentrate solely on encouraging new industry but to safeguard the operations of existing industry and to help such firms to modernise their facilities. This measure will, in my view, be of particular 584 help in the Yorkshire and Humberside region where so many obsolescent buildings exist.
It is worth stressing that this measure will be supplemented by the national 40 per cent. initial taxation allowance on industrial building and that the regional development grants will not be discounted for assessing what is available under this heading. As elsewhere in the country, firms in the area will also be able to claim 100 per cent. first-year depreciation on investment in plant and machinery. Regional development grants and taxation allowances are by no means the whole story. Under the powers being sought in the Industry Bill we propose to make selective assistance available in the intermediate areas to firms that need it, and that includes the service industries.
On the dispersal of Government offices, the hon. Gentleman should be aware that we are conducting a major review in which the interests of Doncaster will not be overlooked. We hope to get the results later this year.
The regions will recognise that these very wide powers in the Industry Bill will enable us to do a great deal for them. They will also have noted that we intend to operate selective assistance measures, very largely on advice, at the regional level. Both our regional offices, whether in Leeds, Doncaster, or anywhere else in Yorkshire, and the new industrial development executive are being structured to ensure that the maximum possible expertise and local knowledge are devoted to providing assistance in the most effective possible way.
The fact that I am still not at the end of the story illustrates the very wide range of assistance which we are devoting to the regional problem. As an assisted area Doncaster is eligible for several other measures of assistance, such as grants for derelict land clearance, housing improvement grants, assistance for training and resettlement—in that context, I am sure that my right hon. and hon. Friends in the Department of Employment will note what the hon. Gentleman said about the need for a training centre, though I know it is their view that the centre at Wakefield is probably the most suitable in the circumstances—aid for special infrastructure schemes and advance factory building. 585 None of these measures is negligible in itself, and together they add up to a very comprehensive attack on the problems faced by that part of the country.
Finally, I should not turn away from the subject of regional measures without mentioning industrial development certificate control. I assure the hon. Gentleman that control will be operated in a highly liberal manner for Doncaster. Certificates will be freely granted for projects which are in keeping with local needs and resources and our regional office will continue actively to steer suitable projects to the area.
One criticism made by the hon. Gentleman is that the former intermediate areas in the region will suffer now that their neighbours have similar status. I do not think that this will prove to be the case. In my view it is wrong to adopt a piecemeal attitude to assisted status within a particular region because this will only distort and inhibit the natural growth in the region as a whole. Furthermore, it overlooks the fact that prosperity in the region generally will work through to each part of it.
Have we in all these measures catered for Doncaster's problems? Unemployment is, of course, the symptom rather than the problem itself, and the basic difficulty in Doncaster is the industrial structure. There has been over dependence upon a few large industries, and there have been redundancies, but these are now largely a fact of history. The area has been heavily dependent upon the coal industry, although less so than other parts of the Yorkshire coalfield, but it should not be forgotten that more people in the area are employed in manufacturing industry than in coal mining, and there is also a strong service sector. What is needed now is a healthy performance by existing industry and a share of the new industry that will be developing in the country as a whole. I am confident that our new measures will be capable of bringing about both of these.
The coal industry, to which the hon. Member for Don Valley referred, has made a good recovery since the strike this year. Output is back to pre-strike levels and stocks are higher than they were this time last year. Productivity has shown an encouraging improvement, and in the Doncaster area has been par- 586 ticularly good. The Doncaster area is fortunate in being one of the more efficient and productive parts, of the coal industry.
The industry as a whole has grave financial problems following the strike but, as my right hon. Friend the Secretary of State said on 6th March, we are now considering the major financial problems facing the NCB and legislation will be introduced in due course to deal with them. The issues are very difficult and complex, and I cannot tonight say exactly what solutions the Government will propose, but the hon. Gentleman may be assured that we shall take full account of the regional and manpower considerations involved.
To sum up, the new regional measures which we are proposing will be of substantial benefit to the Doncaster area. They should ensure that the area gets a satisfactory share of the industrial growth which we expect to come about from our national economic measures and, if I may say so to the hon. Member for Don Valley, from our entry into Europe.
But I cannot stress too strongly that national prosperity is, at the end of the day, the key to the regional problem. There is no doubt in my mind that the effectiveness of these measures will be reinforced by the natural advantages of Doncaster, particularly in respect of location and by the initiative of its inhabitants. Above all, we must have time for our new measures to work. We certainly shall be keeping a close watch on developments, and in the case of Doncaster the future of the local coal industry will be one factor that we shall take into account.
It is worth noting, because of the rather bleak picture that is sometimes painted by hon. Gentlemen opposite, that the latest evidence from the unemployment front is fairly promising. There was an overall fall in the unemployment rate from 6.2 per cent. in May to 5.6 per cent. in June, and this has been the trend generally this year. The figure in June was significantly below the average for the development areas. It is still, of course, far too high, but the trend suggests that we are right to be confident in the effectiveness of our overall policies.
587 I am confident that the Government's new measures will stimulate economic activity in Doncaster, and I believe that Doncaster should be confident that it has a great deal to offer to existing and to mobile industry through its own efforts. 588 through Government assistance and through its natural advantages as a whole.
§ Question put and agreed to.
§ Adjourned accordingly at eleven minutes to One o'clock.