HC Deb 26 July 1972 vol 841 cc2016-26

1.30 a.m.

Mr. David Watkins (Consett)

After seven weeks of assiduous application, I am grateful at last to have been lucky in the Ballot and to have the opportunity to raise, even at this late hour, the subject of unemployment in Consett and Stanley, in the area of my constituency.

On 26th June at Question Time I felt obliged, in view of the completely unsatisfactory nature of answers given to my questions by the Minister for Industrial Development, to give notice that I would seek to raise the matter on the Adjournment. In reply to my supplementary question the right hon. Gentleman said that unemployment dropped from 7.8 per cent. in April to 6.5 per cent. in May and…a further reduction will follow in June."—[Official Report, 26th June, 1972; Vol. 839, c. 980.] The reduction in June to which the Minister so confidently looked forward proved to be of negligible proportions—0.3 per cent. to be precise. In July unemployment has risen again by almost a complete percentage point and is now standing at 7.1 per cent. a measure of the continuing level of unemployment in the area. So much for the complacent replies to which I referred at Question Time on that occasion and the broken promises of the Minister.

But, easy though it is to score debating points on such matters, I want to use this Adjournment debate to raise the matter in a much more fundamental way, because the situation in the area is such that if much more drastic solutions than any which have so far been put forward are not applied, the whole area will be facing the prospect of long-term economic decline and distress.

I want to illustrate the current manifestations of the situation. On 25th April the closure was announced of the Medomsley Colliery, bringing 150 redundancies. On 23rd May 120 redundancies were announced at the Morrison Busty Colliery at Annfield Plain. Meanwhile, on 19th May, Ransome, Hoffmann, Pollard Ltd. announced that there would be no fewer than 530 redundancies in the ball bearing factory which is part of its group, also situated at Annfield Plain. On 5th June was announced the closure of the Leadgate engineering works to take place on 30th June, which meant that another 290 jobs disappeared. Between 25th April and 5th June, a period of just seven weeks, almost 1,100 redundancies were announced in the area, a shattering and demoralizing blow to the whole of the Consett and Stanley area.

The closure of the coal mine and the reductions in the labour force of another—indeed, the contraction of the coal industry in the area in general—are accepted by my constituents as sadly inevitable because in the collieries, many of which have been worked over generations, the reserves are becoming worked out. The National Coal Board at least entered into full consultation with the Durham area of the National Union of Mineworkers on the closure and the reduction in the labour force, but that does not alter the fact that they represent an increase in unemployment in the area.

I want to say something further about Ransome, Hoffman and Pollard Ltd. and Leadgate Engineering because the announcements of the redundancies in those two cases were notable for the lack of consultation with the trade unions. With Ransome, Hoffman and Pollard at Ann-field Plain the old consultations which have taken place have been about ways and means of effecting the reduction in the labour force after the decision, which was a final one, had been taken by the board of the company. The situation with regard to Leadgate Engineering was even worse. The closure was announced on 5th June by the parent company, Stibbe Monk Limited, of Leicester. It burst like a bombshell and even Mr. William Reed, the chief executive responsible for managing the plant there, was made aware of the impending closure of the works only when two directors from Leicester arrived in his office at 9.30 a.m. on 5th June and informed him that the works was to be closed on 30th June.

In their different ways, Ransome, Hoffman and Pollard Ltd. and Stibbe Monk Limited have both received large sums of public money for development purposes. But they appear to have shown scant regard for the public interest in depriving so many members of the public of their means of livelihood. The Under-Secretary ought at least to consider instituting a public inquiry into the management of both concerns. There should be a public inquiry into the way in which the public's money has been used and why the expenditure of public money for the express purpose of producing employment has so signally failed to do so.

I turn next to the steel industry. In this area the steel industry and its future prosperity is absolutely crucial not only to the employment situation but to the whole economy of the area. Consett is a famous steel town. At the Consett works the British Steel Corporation employs over 6,000 workers. The prosperity of that plant is crucial not only to Consett and Stanley but also to a much wider area overlapping into at least two adjoining parliamentary constituencies, the Blaydon division of County Durham and Durham, North-West.

Over the last year several ancillary plants have been closed or moved away to other steel works. There has been the loss of 50 jobs here and 30 jobs there. These were not large numbers but the constant reduction and closing down of ancillary departments has led to the most acute anxiety on the part of large numbers of my constituents who are employed in the steel industry and acute anxiety among people in general, arising from the fact that the economy of the whole area is very much dependent upon the steel industry.

A few weeks ago I met shop stewards from the Hownsgill plate mill. That is an important part of the works. It is a large modern plate mill which is currently running a long way below capacity. In the light of that and of the general situation of the steel plant, the shop stewards expressed to me their very grave concern about the future. I share their concern, not only because of what I know is happening and what I have observed happening in the steelworks in my constituency but also because of events which have occurred in the House.

During the life of the present Government, there have been two occasions when I have spoken in steel debates and called specifically for the expansion of the steelworks at Consett. Tide first was on 24th May, 1971, and the second on 23rd May this year. On neither occasion did I receive a reply from the Government to the representations I had made; nor was a letter sent to me subsequently. I readily acknowledge that in a debate on an industry like the steel industry, spread as it is throughout the country and on which hon. Members raise matters of constituency interest, the Minister who answers cannot reply to every detailed constituency or regional point; but, at least, I feel that on those two occasions the Ministers concerned should have had the courtesy to write to me with their comments on the points I had put to them.

To sum up, one of the crucial factors in the situation in Consett and Stanley is the great reduction in coal mining which has taken place. Over the years there has been a devastating contraction. In checking back over some records I find that my predecessor, the late Mr. William Stones, who was a mines inspector before he came to the House, said in a speech in the House on 2nd December, 1965—as events turned out, it was his last speech in the Chamber—that 10 years previously when he had been working as a mines inspector he had inspected 16 pits within the constituency. Today there are only three and in October, when Medomsley closes, there will be only two, and even those two will be much reduced in size compared with what they were in former days. Whereas coal mining formerly employed thousands upon thousands of people in the area, it now employs only hundreds. This has had a devastating effect on our economy and employment prospects.

Side by side with the rundown of the coal industry has gone a series of failures and disappointments in efforts made to provide alternative employment, culminating in the Ransome, Hoffmann and Pollard and Leadgate Engineering situations to which I have already referred. Also, as I say, there has been a steady decline in employment in the steel industry, together with a disconcerting lack of information about the future position of the industry.

Those are the facts and figures of the situation in the area. I shall quote now from a letter I received from a lady constituent just two days ago: I have my eldest son, 21 years old, made redundant a second time, by the closure of Leadgate Engineering; the first time made redundant by Auto Lifts & Engineering. This was after a four-year apprenticeship in fitting and turning, at 20 years old. This is how she ends her letter: But he is not alone, as the dole queue gets longer each day". That expresses the problem in human terms. Those are the human realities behind the facts and figures which I have outlined.

What Consett and Stanley need is the urgent provision of 2,000 permanent new jobs, not jobs which, as happened in the case of Leadgate Engineering, come in and vanish again within three years of the opening of the plant. We want 2,000 permanent new jobs in a diversity of industries—engineering, electronics, plastics and man-made fibres. I quote those industries as being industries which are developing and likely expanding industries of the scientific revolution and the application of science to the technology of the times in which we live. In addition, the area needs an additional3,000 jobs to face up to the long-term prospects of the situation. Nothing less than that sort of provision will solve the problems of the area.

1.46 a.m.

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

I congratulate the hon. Member for Consett (Mr. David Watkins) on securing this debate about his constituency. He has drawn attention not only to certain general problems affecting the area but to various specific cases affecting particular firms. In reply to him I am faced with two constraints: the need to respect the confidentiality of firms' arrangements and the lack of time in which to explain some fairly complex transactions. But I will do my best in the time available.

The hon. Gentleman has made representations to my right hon. Friends the Secretary of State and the Minister for Industrial Development concerning two firms in his area and there have been approaches from the Stanley Urban District Council to the Prime Minister about redundancies announced in its area and from the AUEW to my right hon. Friend the Secretary of State. The Department's regional officers have been keeping me fully informed of the situation concerning the firms mentioned and the general situation in the Stanley area and I have written to the hon. Gentleman suggesting that I should meet him and a deputation from Consett and Stanley either in London or when I am in the North East in September. I must make it clear, however, that I could not discuss matters relating to financial assistance for individual firms, which must remain confidential between applicants and the Department. But such a meeting would provide an opportunity for discussion of problems affecting the area which I fully understand arouse deep anxieties among those whose livelihood may be affected. I have not time now to answer all the points the hon. Gentleman has made, but the suggested meeting would provide an opportunity for further discussion.

I fully recognise the need for additional industry in the area to replace the jobs lost in traditional industries, especially coal mining. I am glad to note that at the Medomsley pit, although 150 redundancies are involved, only 65 men will be redundant because 85 will be offered transfer to continuing collieries. Twenty will be retained on salvage work. Most of them will be over 55 years of age and will benefit from the redundant miners' payment scheme. Nevertheless the problem of the rundown in the coal industry existed at the time of the previous Administration which found it necessary to declare the district a special development area in November 1967. The Government and I were gravely concerned to hear of the number of redundancies recently announced in North-West Durham.

The hon. Gentleman referred to the answer of my right hon. Friend the Minister for Industrial Development on 26th June. On that occasion my right hon. Friend pointed out our belief that the measures we propose in the Industry Bill will go a long way to reduce unemployment in this area, as elsewhere.

We fully recognise that it will take time for new or existing firms to formulate and put into effect expansion plans. We know that people locally will say, with justification, that this will not help them here and now when redundancies have been declared, but what we want to achieve is stable and long-term growth in areas which have suffered for too long. Previous regional measures have had some effect in the area already, but we believe that our new proposals will prove very much more effective.

On the question of Leadgate Engineering Ltd., I am aware of the deep concern aroused by the announcement of the decision to close the factory near Consett. My officials have had discussions with the company as well as with union representatives and the local authorities concerned. I also understand that the Department of Employment has so far placed some 80 of the employees affected but, of course, opposition has been expressed by the hon. Gentleman and others to the firm's plans, partly on the ground that the company had received financial assistance to establish its project at Consett.

It has not been our practice to make available details of the assistance offered to individual applicants under the Local Employment Acts, but if a loan were made it would be repayable in full if the borrower ceased or threatened to cease to carry on the undertaking. Building grants are subject to a right of recovery provision in certain cases, including the case where the grantee ceases to carry on the stipulated undertaking within a five-year period. Operational grants are not subject to repayment conditions but are subject to review if there is a material change in the project.

The other firm the hon. Member referred to was Ransome, Hoffman and Pollard. I know that the announcement of over 500 redundancies at Annfield Plain created very serious anxieties in the area but I understand—and the hon Gentleman referred to this—that following discussions with the unions a large proportion, I believe some 400, of the people concerned have accepted voluntary redundancy and that there will be further discussions after the holiday period about the position of the remaining 130. Nevertheless, I accept that this is a most regrettable job loss to the area. Of course, it is for the company to decide on the optimum size of its work force. We—the Government—cannot force it to manufacture products for which there is no demand or to employ more people than it needs to produce what it can sell.

However, the Government recognise the value and importance of the British ball and roller bearings industry. As the House will know, we have taken action which should attack the root causes of the industry's problem. The measures we have recently taken to improve demand and increase investment in the economy as a whole, including the reduction in corporation tax, free depreciation allowances and increased regional assistance, are aimed at stimulating demand for both capital and consumer goods, and they should lead to an increase in orders for ball bearings which are used in a wide variety of those goods. My right hon. Friend the Secretary of State said in the House on 5th June, during his visit to Japan he raised with Japanese Ministers the question of ball bearings and forcefully brought to their attention the particular problems of the bearing industry. It has been agreed that a meeting of officials should take place in early September to review the progress made by the Japanese by that time. The Ball and Roller Bearing Manufacturers Association met its Japanese counterparts on 19th June and contact by correspondence, I understand, is continuing.

The hon. Gentleman raised the important question of the future of steel in his area. I can understand his impatience and that of his constituents to know the future in this respect. I am well aware of the important position steel holds in employment in the area.

Decisions on investment at individual works are entirely the responsibility of the British Steel Corporation. The Government's powers are limited to approval of the corporation's general programme of investment. As the hon. Gentleman knows, my hon. Friend, the Minister for Industry said in the House on 8th May that the corporation expects to be able to make firm strategic decisions later in the year. The Government will be closely involved in these decisions, particularly the siting of major steel developments, and I can assure the hon. Gentleman that regional policy factors will be fully taken into account.

I must emphasise generally that there are now massive financial inducements to encourage industry to set up in areas where development is needed and the industrial development certificate control provides a discouragement against expansions in over-crowded areas.

The Department of Trade and Industry, which is always on the look-out for firms to attract to assisted areas, bears in mind the particular incentive provided by the availability of skilled workers in an area where redundancies or closures have taken place as a factor to bring to the attention of firms with mobile projects.

I was moved by the letter which the hon. Member very properly read from his constituent concerning her son who was out of work, but one must take comfort from the fact that within an expanding economy, which we intend to achieve, the fact that there are bright and enthusiastic young men and an able and skilled work force can be a great attraction to industrialists and industries, from both home and abroad, which want to locate in our assisted areas.

Although a great deal remains to be done, we should not lose sight of the contribution of new firms to the area. Fourteen have been located in North-West Durham during the last five or six years, including Ever Ready, Patchogue Plymouth and Forward Textiles.

The particular need now is for new firms employing male labour. There is a Department of Trade and Industry advance factory of 15.000 sq. ft. at Consett currently available and construction will start shortly on a new advance factory at Stanley. The Department will make particular efforts to find occupants for these factories who will provide male jobs. Even in the last 18 months, when industry generally has not been in an expansive frame of mind, we have suggested North-West Durham as a location to 92 firms. 28 of which followed up our suggestion by visiting the area to see for themselves. We hope that the assistance becoming available under the Industry Bill will encourage these firms to bring out their expansion plans for reassessment and that other firms from outside the area, as well as those already there, will recognise the quickening of industrial activity and react to it.

Although I accept entirely that the hon. Member's constituency and area have had very difficult times and still have them, they should be of good heart and I believe that they have a great deal to offer to industry. The quality of the available work force is something which, coupled with the dramatic new incentives we as a Government are offering to industry, can ensure that Consett and Stanley canenjoy a bright economic future.

Question put and agreed to.

Adjourned accordingly at two minutes to Two o'clock