§ 10.16 p.m.
§ Mr. Roy Hughes (Newport)I welcome this opportunity to raise the important question of development area status for Newport.
I had a similar Adjournment debate on 8th May 1972, and I had no joy on that occasion. At that time we had a Conservative Government. We have found over the years that the Conservative Party has had very little interest in Wales. Indeed, its interest tends to be centred on the south-east of England. Its economic plans led to mass emigration from places like Wales and Scotland which, in turn, brought serious problems to the south-east of England in terms of housing, transport, education and medical services.
The Conservative Government, when returned to power in June 1970, embarked on what I term Common Market strategy They were all too ready to spend many millions of pounds on Maplin and the Channel Tunnel. The continuation of their policies would ultimately have led to government from Brussels.
Throughout their years in office the Conservative Government adopted a parsimonious attitude to Wales, particularly to south-east Wales. For example, there was the issue over the schemes for the expansion for the port of Bristol. Several schemes had been successively rejected by the previous Labour Government on both social and economic grounds, but immediately the Conservative Government came to power in June 1970 Bristol was given the go-ahead. Now that famous city has a £25 million hole in the ground, at double the original cost. My latest information is that not one shipping line has indicated that it is ready to use the new West Dock development.
In comparison, the Labour Party has always recognised the importance of the regional problem and that investment in 1206 the regions is the key. In line with this policy, in 1968, within 24 hours of taking office, the Labour Government overruled the findings of the Hunt Committee and gave intermediate status to Cardiff and Newport. But under the Conservative Government the benefit of that was soon eroded and the Industry Act 1972 extended the intermediate area to north of Birmingham, and there were cuts made in building grants and grants for factory extension.
Newport suffered very badly during those years of Conservative rule. From October 1970 there were no fewer than 3,000 redundancies. British Aluminium closed its factory and decided to concentrate its activities in Scotland. The British Steel Corporation closed the Newport tube works, with a loss of over 1,400 jobs. I have said many times in the House that that works, which had been long established, needed modernising and not closing. It was ideally situated and was a wonderful site, with excellent communications. It would have been an excellent site for the possibilities which seemed to lie ahead in the Celtic Sea. There is now a tube shortage throughout the country.
That is the way in which the BSC seems to carry on. This publicly-owned corporation dealt yet another severe blow to Newport with its decision to concentrate the supply of iron ore at the new ore terminal at Port Talbot. These supplies are for the great Spencer works, employing nearly 10,000 people in Newport. As the supply of iron ore for Ebbw Vale will also cease as a result of the proposal to discontinue steel-making at Ebbw Vale, the outlook for Newport docks is poor.
The logical thing to do in the case of the great Spencer works, seeing that it is one of the most modern plants in Europe, was to build an integrated plant with its own iron ore handling facilities. Instead the British Steel Corporation scrapped the Uskmouth project in Newport for an iron ore terminal after parliamentary permission had been received for it in the late 1960s. Many of the people employed at the works had moved from the valleys of Monmouth-shire and from West Wales. On many occasions they sent delegations of representatives to me, calling for an 1207 integrated plant at Llanwern. But their representations and mine were of no avail.
There's none so blind as they that won't see".or, rather, who do not wish to see. Eventually, the BSC will have to return to the principle of an integrated plant at Llanwern.I know that there is a serious strike at that works at present, and one does not wish to exacerbate the situation, but after all that has gone on our Labour Government cannot allow this great works to be left indefinitely under its present directorship without taking action. I would go so far as to say that fundamental changes are needed in the management and structure of the BSC as a whole.
Bearing in mind, then, all Newport's difficulties, one could not but be shocked by the Government announcement on 14th August this year that Cardiff would be included in the development area, bringing a further expensive development area to Newport's borders and within the industrial complex of the South Wales coast. Why favour Cardiff, which already has capital status?
Admittedly, there is the threat of what could happen at East Moors, but Newport has already experienced 3,000 redundancies and there could be serious difficulties in respect of the docks. The unemployment figures for the two towns in recent months are as follows: April, Cardiff 3.1 per cent., Newport 3.4 per cent.; May, Cardiff 2.7, Newport 2.7; June, Cardiff 2.5, Newport 2.5; July, Cardiff 2.8, Newport 2.5; August, Cardiff 3.3, Newport 3.4. Those irrefutable facts back up my question—why favour Cardiff?
It is difficult to understand this discrimination against Newport, especially when one considers the unemployment figures in other important South Wales towns. According to an oral answer today, in Llanelli the figure is 2.3 per cent. and in Port Talbot 3 per cent., compared with 3.2 per cent. in Newport. The other two towns have been in the development area for many years.
The argument is not confined to Wales. The whole of Scotland is now a development area. Does the Minister suggest 1208 that an oil boom town like Aberdeen, which an Aberdeen Member told me tonight has a virtually non-existent unemployment rate of just over 1 per cent., has greater priority than Newport for development area status? What does Newport have to do to get a square deal? Such treatment in decision making can only breed cynicism about politics and politicians.
Nor would development area status for Newport harm the Monmouth-shire valleys. Newport already employs about 20,000 people from the valleys, who come in to work every day. Only a tiny percentage leave Newport to work in other areas. For the valleys to oppose this status for Newport would be to cut off the hand that feeds them. Alternatively, would they prefer the jobs to go to Cardiff, which would be of no benefit to them?
Even if Newport were to get development area status there would still be a disparity, because only five miles or so up the road there is a special development area. There are those who say "Ah, but Newport has the communications network." In answer to that I would say that this did not prevent two major closures. It is not sufficient for Newport to become some sort of glorified Clapham Junction for industry going elsewhere. In view of its favourable geographical location, it needs to be encouraged.
For some time now there has been the question of a possible major port development there. A number of plans have been put forward—Europort, Uskmouth, the British Transport Docks Board's scheme, and others. Development area status for the town could well be the spark which would get one or other of these schemes under way. Why not encourage Newport? Only a few days ago a report was issued indicating how heavily continental ports are subsidised at present. We should bear in mind, too, that in the late 1960s the flats to the east and west of Newport were earmarked as one of the three outstanding sites for maritime industrial development.
I conclude by saying that there is no case at all for granting development area status to Cardiff over Newport. Members of the Newport Town Council, who have fought hard to bring new industry to the town, are rightly disgusted at present. I hope that tonight the Minister will 1209 announce that this anomaly is to be rectified and that Newport will be included. If not, will be at least give an assurance that this whole archaic system and map of assisted areas will be reviewed to bring a greater degree of fairness into it? Second, will be also give an assurance that his right hon. Friend will be prepared to meet a deputation from Newport, so that our case can be pressed even further?
§ 10.32 p.m.
§ The Under-Secretary of State for Industry (Mr. Gregor Mackenzie)First, congratulate my hon. Friend the Member for Newport (Mr. Hughes) on securing this very important Adjournment debate tonight, and so early in the Session. To me it was rather reminiscent of our proceedings earlier in the year, when he was one of the first to secure an Adjournment debate on the steel situation at Newport. It shows all of us his genuine concern about his constituency.
My hon. Friend has raised with me tonight a subject which is very close to him—the subject of Newport and, indeed, the future of Newport within Wales as a whole. I am sure that he will accept from me, as a fellow Celt, that much of what he had to say, about developments in the south of England, particularly, found a very ready ear in me. He has been a very persistent and diligent campaigner in favour of the subject that he has raised tonight—development area status for Newport. I do not think that any constituency could have a stronger champion than my hon. Friend in this respect. I am not sure that I shall succeed in convincing him that development area status is unnecessary at this time, but at least I hope to convince him that I have looked very carefully at this situation, and I promise him that I shall continue to keep a very close watch on developments in his constituency.
When we took office earlier this year we inherited a system under which the assisted areas already covered very wide areas of the country and included within them 43 per cent. of all employees in Great Britain, of which the intermediate areas represented about half. There was a very strong presumption against further increases in the coverage of the assisted areas, because the wider the area over which one has to spread the jam, the thinner it will get. But regional incentives do not, on the whole, increase the 1210 total amount of investment carried out in the country—my hon. Friend made that point—though they do have some effect on its location. However, it seemed to a number of us that a very small number of places were not getting the level of help which they needed, where the incentives available in the past had proved inadequate.
We therefore carried out a limited but thorough review into the implications of upgrading these areas. We looked not only at the situation in the places concerned but at the claims of other areas, such as my hon. Friend mentioned, for higher status and at the effects on other areas of making the changes we had in mind. The outcome was the announcement in August, to which my hon. Friend referred, that five places were to be up-graded, including Cardiff, from intermediate to development area level.
My hon. Friend argued forcefully the need for a full-scale review of assisted areas. Although I have some sympathy with that idea in principle, I do not think that this is the appropriate time. We looked at the situation in the summer and decided that large-scale changes in the assisted areas would be premature and damaging to confidence in the stability of regional incentives.
In reaching this decision we took full account of the likely effects on Newport and we looked closely at Newport's own case for development area status. Newport has had the same status as Cardiff in the past and it was often argued that the two places would always have to receive the same treatment. Why, then, my hon. Friend asked, have we drawn the development area boundary between the two? Newport has a slight advantage in location, in that the problem of communications between South Wales and the larger centres of population in the Midlands and South-East England gets easier as one moves east along the coastal belt. I do not claim that this advantage is very significant.
The plain fact is that in the last two and a half years, since unemployment nationally hit its post-war peak and the last changes in assisted areas were made, Cardiff's economy has fared a great deal worse than Newport's. This was borne out in the figures my hen. Friend elicited in reply to a question to the Department of Employment today. Manufacturing 1211 employment in Cardiff has fallen to a very low level as a proportion of the total work force. Unemployment there fell more slowly than elsewhere from the peak levels of early 1972, so that male unemployment in particular is now little below the average for the whole of Wales.
My hon. Friend referred, in passing to the East Moors steelworks. We made it clear at the time—I repeat it now—that the granting of development area status to Cardiff would in no way prejudge the outcome of the current review of the British Steel Corporation's closure proposals; nor does it imply that we expect the review to come out one way rather than another.
Newport presents a much brighter picture, in contrast. The manufacturing sector is strong. Newport's steelworks, the massive Llanwern plant, is expanding and a big investment programme is going ahead. I take my hon. Friend's point about an integrated steelworks at Llanwern, but he will not expect me to comment on it tonight. I will convey his comments to my noble Friend Lord Beswick.
I fully share my hon. Friend's hope that the latest dispute at the Llanwern works will soon be settled on amicable terms and that the new era of cooperation which all concerned hoped would come out of the recent joint inquiry will become a reality.
Unemployment fell sharply from early 1972, and even now, after 10 months in which national unemployment levels have been rising, the number of unemployed in Newport is little more than half what it was two and a half years ago. The unemployment rate now stands at around the average for Great Britain as a whole—significantly below Cardiff's and well below the averages for Wales and for all development areas.
It is true that there are a few places within the development areas in Wales with lower rates of unemployment, but we have to designate assisted areas with a fairly broad brush, since we would otherwise create a patchwork of small areas with different status and cause many more boundary problems and unacceptable distortions in industrial location decisions.
1212 My hon. Friend mentioned my own country of Scotland, referring to Edinburgh and Aberdeen. I am not in a position to argue with him about the figures for Aberdeen, since I do not have them, but I do know of the case of Edinburgh, since it is one that I looked at in the summer. We decided to upgrade it for three reasons: first, its highly anomalous position as a small intermediate area completely surrounded by development areas and some 150 miles from the next nearest intermediate area; second, the fact that some firms had been moving out of the city to gain the benefit of higher incentives; and third, a high rate of male unemployment.
Newport has considerably lower unemployment than Edinburgh and its surrounding areas, and, while it is adjacent to the South Wales development and special development areas, its position is not quite so anomalous as Edinburgh's.
Vacancies are very high by historical standards, and all this is in spite of the heavy loss of jobs which Newport has suffered, to which my hon. Friend has referred. The town has shown remarkable resilience in absorbing these losses. I think this demonstrates that intermediate area status, combined with the town's advantages of location, with its now excellent communications and the energy of its local authority and people, has served Newport exceedingly well.
What I have said so far refers to the past. Turning to the future, the picture still looks favourable. We must acknowledge the danger that unemployment may rise in Newport in the coming months, just as it may rise in the country as a whole, but we know of no major threat to jobs in Newport itself. On the contrary, my Department estimates that there are around 1,000 jobs for men in the pipeline in manufacturing alone.
I quite take the point that the people of Newport are afraid of the effect which the very fact of Cardiff's upgrading to development area status may have on the prospect for their own town, and that these effects have not yet had time to become apparent. I can only say in answer that at the moment Cardiff needs the extra assistance and that in my view Newport is probably strong enough to cope with this new situation. None the less 1213 I give my hon. Friend the assurance he asked for—that we shall be keeping a very close watch on the situation in Newport as it develops in the coming months.
We shall take due account of the points which my hon. Friend has put forward this evening. My right hon. Friend the Secretary of State for Industry has agreed to receive a delegation from Newport Borough Council and we shall listen carefully to what it has to say. I trust that my hon. Friend will be able to take part in that delegation and put his views to my colleague. It is important that we should have some stability in the 1214 boundaries of the assisted areas, but within this constraint we promise that we shall be flexible. If we become convinced of the need for further changes in the boundaries we shall not hesitate to take further action. I am sorry that I cannot go further than that tonight, but I hope that my hon. Friend will accept my assurances and will consider that he has not been wasting his time in raising this important subject on the Adjournment.
§ Question put and agreed to.
§ Adjourned accordingly at sixteen minutes to Eleven o'clock.