§ 12.36 a.m.
§ Mr. Kevin McNamara (Kingston upon Hull, Central)Although I am happy to eventually have obtained this Adjournment debate after balloting unsuccessfully for many weeks, it is nevertheless not a happy topic. The subject I raise is the immediate, urgent and desperate unemployment situation on North Humberside and in the City of Hull in particular.
This concerns the right to work. This is a matter of concern, not only to our constituents, our unions and our employers, but to many Members of this House, particularly those of my hon. Friends who are sponsored by trade unions such as the Amalgamated Union of Engineering Workers, which has written to my hon. Friends and myself about this problem. It is interesting to note that although my hon. Friends representing the area are present, no Conservative Member representing the same travel-to-work area is in the Chamber.
Unemployment on North Humberside has consistently been over the national average over the past decade, in good times as well as bad. Now it is approaching the level of some development areas and has passed the levels of some other development areas.
431 The total, excluding students, is 11,414, of which seven short of 10,000 are men—an increase of 325 over the previous month and of 3,114 over the previous year. For women the number is 1,421, an increase of 640 over the previous year. In Hull the incease in male unemployment over the previous year has been 2,384, making a total of 8,238 males while for women the increase has been from 464 to 1,105. That gives a percentage increase of 9 per cent. for men and 2.8 per cent. for women——a total combined rate of 6.7 per cent.
In the same period in Hull the number of unfilled vacancies has fallen from 1,838 to 776 which means that roughly 15 people are chasing one job. This is a bad picture, even if students are excluded from the percentage and if we make allowance for people changing jobs and those registered as unemployed merely to obtain pensions and social security rights.
We have suffered a number of damaging blows in Hull and Humberside over the past few months and there may be worse to come. Thorn Electrical Industries in my constituency closed its factory, with the loss of 300 jobs. Imperial Typewriters, in the constituency of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), was scandalously treated by its multinational owners, Litton Industries, who sought to use its Common Market factories to precipitate on to the industrial scrap heap 14,000 people employed at its factory.
Ideal Standard—the biggest employer in my constituency—is on short time because of the cutback in home improvement loans and the failure of European orders. Armstrongs are on short time because of the recession in the car industry. The aircraft industry at Brough is concerned for its future and the fate of the HS 146. The fishing industry is in doubt over its future because of the Conference on the Law of the Sea and confusion over Common Market fishing policy.
Finally the Chancellor has slapped 25 per cent. VAT on one of the most labour-intensive industries in our area—the caravan industry, which had itself been subject to sufficient blows from outside before. The touring caravan itself has a straight 25 per cent. and the contents of many other caravans which will not have 432 to bear the straight duty have been made subject to the general VAT rate. The effect of this tax on unemployment in our region could be most serious.
I have received a letter from a director of a large caravan company—Astral Caravan Company Limited of Hull—which has received the Queen's Award for Exports. This is what the export director writes:
In my opinion the effects of the budget upon the Caravan Industry are likely to be nothing short of disastrous. Since November 1973 when the oil crisis really started to bite, we have had a succession of misfortunes. The price of petrol had a very natural direct influence upon the purchasing power of t he caravan owner and of course it was a main factor in the inflationary spiral which also has reduced the purchasing power and taken the competitive edge off our exports. Only this very morning 1 have received a letter from our Dutch manager showing how vulnerable is our position in relation to our continental competitors.Previous Chancellors excluded our young and growing Industry from any effect of Purchase Tax. This was something which we always appreciated as it enabled us to keep a healthy Home Market as a spring-board to our export plans. Our Industry has demonstrated the wisdom of such a policy by its export achievement.Under the present budget Mr. Healey is imposing on a Touring Caravan for the humble working man the same penal rate of tax as an asset-stripper would have to pay when buying a fur coat or expensive jewellery for his mistress. There is no sense in this whatsoever and it is going to stop many families from enjoying a simple and laudable pursuit at a time when their spending power is so limited. Even prior to this budget the Caravan Industry was suffering from the effects of inflation and over-production. The Continental competitors are moving in as fast as they can but with sterling being so weak, we will fight as hard as we can to bring foreign currency back to this country. We would have done this whether or not the Chancellor had imposed a prohibitive rate of V.A.T. on touring caravans in the home market, but I must say that if there is not to be large scale unemployment in this Company and in the Caravan Industry, some reduction of the 25 per cent. rate is both urgent and imperative.It is a sign of the difficulties through which we have been passing that we have had to close down two of our three factories—Wyton and Clough Road—and indeed in the third factory—Lorraine Street—we have had to curtail our production. Further cuts on our present labour force within the only remaining factory must depend on the damage done by the V.A.T. rate of 25 per cent. on home market caravans. We have already cut our production in May/June following the Chancellor's measures by about £100,000 monthly.'433 Even making allowances for the usual scare-mongering of manufacturers when their goods are made subject to tax, this is a serious position.Finally, there is the fact that as a result of slum clearance and housing policies about 750 to 1,000 small businesses, excluding shops, may lose their premises.
However, the picture is not wholly black. Reckitt and Colman is continuing to expand and some smaller industries are continuing with their plans, despite the economic difficulties, and have seized the opportunities that North Sea oil development has offered them and followed the lead given them by my hon. Friend the Member for Kingston upon Hull, East. The completion of the M62 in the next 18 months or so and the later completion of the Humber Bridge will add to the transport infrastructure of the area and we have good educational facilities.
What, then, can be done about the situation? Here may I pay tribute to the work of the Industrial Development Committee and its Chairman, Councillor Louis Pearlman, and its Director, Ian Holden, for the work they have done in difficult times in seeking to attract more jobs to Hull and to maintain employment. They have been of considerable help to me in preparing for this debate and in suggesting positive remedies to meet both the short-term and long-term problems.
The remedies in the short term are, first, to extend building availability through EIEC to local expanding industries; and, secondly, to review and revitalise the community industrial scheme, particularly for school leavers. This scheme does valuable work in my constituency, but I should like the Minister to ask local industrialists why they have not taken up their full quota.
Thirdly, special training programme for school leavers, either in conjunction with local industry or through Government training centres. It would obviously be better to pay local industry to employ young people than to pay unemployment benefit. Fourthly, the reintroduction of a qualifying Eyesore programme. This is an important step. Fifthly, a review of intermediate area status for a limited period to get over the current crisis, particularly by introducing cash grants for investment in plant and machinery, say, up to 1978, so that in particular we could 434 benefit from the employment that North Sea oil is bringing, which the North-East and Scotland has been hogging to itself.
Sixthly, special tax concessions for companies taking on school leavers, that is, a possible relief from corporation tax or an equivalent amount in some taxation field. Obviously this will affect the Chancellor and his taxation policies, but it is important.
I come now to the medium- and long-term measures. Some of them will be expansions of the short-term measures, but in particular one can add, first, an expansion of the building programme by EIEC to allow for expanding local industry under Part III of the Industry Act. I understand that this matter is at present under consideration in the Department.
Secondly, designation of local authority relocation provision in terms of related costs of roads, sewers and buildings, as key sector expenditure rather than LDS expenditure, where such schemes are proven to arise from housing clearance policies. I understand that this matter has been taken up by Hull City Corporation with the Department of Environment and is estimated to involve between 750 and 1,000 small businesses, excluding shops.
Thirdly, the establishment in Hull of a Government Office or nationalised industry headquarters operation, for example, BNOC or National Carriers. Hull is a city that has been almost totally ignored from this point of view, despite its very real unemployment problem and its proven potential to be able to absorb a major new incoming office employers.
Finally, a scheme for setting up an extension to the selective assistance provisions of the Industry Act, to establish a merchant banking and company flotation operation to deal with the problems of finance and the expansion of small businesses.
My Director of Industrial Development said to me in a note he sent me:
In looking at the medium- and long-term investment stimulation and job producing policies, one cannot help thinking that a further extension of State interest into the industrial and commercial fields does bring to the Government a far wider responsibility to find ways to encourage investment than hitherto. Because of this I do not think that sufficient thought has been given to the 435 psychology and economic triggers for industrial expansion. If the State is going to dominate in the way proposed, then clearly it must think about these triggers and do something to introduce effective policies. Undoubtedly in the medium term, however, before such policies can perhaps be thought about and put into force, some action to give substantial tax relief to companies investing more than a certain percentage of their profits into expansion could be a very useful and relatively quick acting stimulus.This is something that we must look at. It is something that the Chancellor considered in his last-but-one Budget. The situation in North Humberside is very serious, and if we are not careful it could well be disastrous for the people who live and seek to work there.
§ 12.49 a.m.
§ Mr. James Johnson (Kingston upon Hull, West)I intervene for a few minutes by courtesy of my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) to support and confirm what has been said by him. I would not wish the Minister to think that we are too despondent in Central Hull, because although, overall, unemployment has increased substantially—there is no doubt about it—the district manager says that unemployment generally has increased only marginally, if students seeking vacational employment are excluded. There is no doubt of the impact on Hull, and there is a possibility of vessels being laid up in the dock. That will mean that 800 or 900 men could lose their jobs.
The shop stewards at Hawker-Siddeley are very disappointed about the phasing out of jobs. It is important that we should get on with nationalisation and that the Government should make a decision about the HS 146 civilian bus and about the building and marketing of more Buccaneers.
We must not be too despondent and sell ourselves short. Hull is not a depressed area. For example, five new firms may be coming to East Hull. We have an underlying vitality and potential on North Humberside, particularly in Hull, which could move quickly if the national situation moved.
I am informed by the Chairman of the Development Committee that things are "jelling" well and that many inquiries are coming in from firms in other parts of Yorkshire, particularly Leeds. The 436 general industrial scene is fairly buoyant, despite the knocks we have had lately. It appears that a good deal of modernisation and investment has taken place, but we have yet to see the results of that. There is an underlying resurgence in the city, the port is doing well, and we should give the dockers a pat on the back instead of throwing brickbats at them as we sometimes do. If the national economy picks up, my belief is that the city has a bright future and that we can do well.
§ 12.52 a.m.
§ The Under-Secretary of State for Industry (Mr. Gregor Mackenzie)Let me say straight away that I well understand, and sympathise with, the deep concern which my hon. Friends have expressed about the very worrying level of unemployment in their constituencies and in the rest of North Humberside. The rise in unemployment throughout the country, particularly in the last six months or so, is indeed disturbing, and the figures announced last week, even allowing for the numbers of students registering during the Easter vacation cannot fail to cause intense disquiet, especially to a Labour Government.
The position in Humberside is in part a reflection of national and international conditions, but it has been exacerbated by the abrupt closure of the Imperial Typewriter factory and of Thorn Electrical Industries which affect the jobs of more than 1,600 people. I liked the expression "the right to work" used by my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara). Representing, as I do, a Clydeside constituency, I well understand the expression. My hon. Friends have raised this matter and I know they have been very active in seeking to help those of their constituents who have been affected by the closures at Imperial Typewriters and Thorn Electrical. I shall return to this matter.
I want to begin by looking at those elements in the situation which give cause for encouragement about the future. There is a risk that in our entirely understandable concern about present difficulties we may tend to paint too gloomy a picture. The facts are that Humberside has good reason to look ahead with optimism. The port of Hull is ideally 437 placed to take advantage of the growth of trade between Britain and the countries of continental Europe. This is true irrespective of whether we remain members of the EEC.
Hull is already benefiting from a rapid growth in traffic, and the major improvements in its road communications which are currently being pressed ahead will stimulate this growth all the more. In addition to its rail links, Humberside will soon have an almost unrivalled situation on the country's motorway network. The M62, linking the industrial heartlands of Lancashire and Yorkshire, will reach Humberside later this year. Further links with the M1 and the South will be provided by the M18 and M180, while the Humber Bridge is expected to be completed by 1977. These developments will greatly improve access to the Humberside ports, both from the rest of the region and from the other main industrial areas of the United Kingdom.
I am well aware that all this will be of little comfort to the 12,000 and more people who are now unemployed in Hull. but I think it is significant that before the recent redundancies clouded the situation the city's director of industrial development was reported in The Times as saying that Hull was experiencing the
biggest resurgence of industrial development…this century".That high level of interest shown by industrialists was attributed to the excellence of the area's communications, a settled labour force, the policies of the local authority, and the prospect of Government assistance.That leads me on to two further points. First, on the local government side, there is a new situation, in that the whole of Humberside is now controlled by one county authority which can exploit the resources of the estuary in a fully coordinated manner. Secondly, there is the question of regional policy. As an intermediate area, Humberside qualifies for significant incentives to stimulate industrial expansion in the form of regional development grants for buildings, selective financial assistance under the 1972 Industry Act and Government factories.
Since the beginning of the selective assistance scheme in 1972, 24 offers of financial assistance worth over half a million pounds have been made for projects in Hull which were expected to 438 create some 1,500 jobs. The great bulk of these projects came from existing firms, which illustrates the vitality of local industry.
Further applications are under consideration for projects which, if they went ahead, would provide a further 1,100 jobs. My Department's first advance factory in Hull was let in 1973 to a mainly male-employing company, and this is now being expanded with the prospect of further jobs being created. A second factory was completed in November and is now ready for occupation while two more are due to be started next month following the programme we announced in November. We aim, therefore, to help the building industry as well as the assisted areas. My hon. Friend mentioned the possibility of further activity by the English Industrial Estates Corporation in the area, and I assure him that this will certainly be considered by my Department. Industrial development certificates have been approved in the last three years for projects expected to provide well over 6,000 jobs in the Hull and Goole areas.
My hon. Friend also referred to the community industry scheme, which is sponsored by the Department of Employment. The scheme was established in North Humberside in June 1973. Until the end of last year it operated only in Hull and provided a maximum of 50 places. In December last year capacity was increased to 60 places to provide for recruitment from the additional areas of Cottingham and Hessle. I am told by the Department of Employment that it is doubtful whether the level and nature of youth unemployment in other areas of North Humberside would at present justify the establishment of new community industry schemes, but I shall draw the attention of the Department of Employment to my hon. Friend's comments tonight.
My hon. Friend also raised the question of the possibility of the Operation Eyesore scheme being renewed. My right hon. Friend the Secretary of State for the Environment has recently said, in commenting on the recommendations of the Royal Commission's report on environmental pollution, that there is regrettably no hope at present of the schem***s being reinstated.
439 My hon. Friend will be aware that as the derelict land clearance programmes of the proposed Scottish and Welsh Development Agencies become effective, it is intended that the rate of reclamation in England should be increased and that new schemes in assisted areas and derelict land clearance areas will become eligible for 100 per cent. Exchequer grants.
My hon. Friend also raised the question of development area status, and urged that we should consider upgrading North Humberside. I shall consider all his suggestions and, indeed, representations made by others, and I shall write to my hon. Friend. I stress that I have always regarded the conferring of special development area status as being a flexible matter which we may examine from time to time.
My hon. Friend mentioned the caravan industry. I appreciate that the caravan building industry is of considerable importance to North Humberside. I accept that the industry has suffered from increases in oil charges, other price increases, and certainly from increases in VAT, which are unwelcome to some manufacturers. No doubt my right hon. Friend the Chancellor of the Exchequer will take note of my hon. Friend's comments.
However, I should point out that some of the best firms of North Humberside who make caravans are good exporters, and I have every confidence that the industry will respond to new challenges and markets.
§ Mr. McNamaraThe firm which I quoted received the Queen's Award for Industry in respect of its exports, and that firm has closed its factories.
§ Mr. MackenzieI wish to deal with one or two other points which were made in the debate. My hon. Friend referred to the aircraft industry, and stressed its importance to the area. We propose soon to introduce a Bill to bring the industry into public ownership. We trust that legislation will go through all its stages this Session.
440 In regard to Hawker Siddeley's factory, it is recognised that the suspension of the HS146 project, together with the effect of some cuts, might cause the loss of some job opportunities. If that situation arises, it will be a matter for management and trade unions to deal with suitably at the appropriate time.
Reference was made by my hon. Friend to his disappointment about the dispersal of Government offices. I understand his disappointment, but it is not possible to send dispersal work to all those areas which have offered to receive it and which, indeed, have put forward strong claims. We shall continue to look for further opportunities to disperse existing work. As far as possible, we shall locate in existing areas any new organisations which may be set up in future. I assure my hon. Friend that the claims of his constituency and nearby constituencies will be fully considered when we come to take further location decisions.
Humberside has had more than its share of setbacks in recent months, but there is no reason why its problems cannot be overcome. We are pursuing a strong regional policy in support of the area, the full fruits of which will be hidden by the national recession which, in turn, is the product of a variety of economic circumstances, many of them outside Government control. We must all strive to overcome our severe national economic problems and, above all, the problem of inflation. Once our national problems are solved, Humberside's advantages will bring the area new prosperity.
§ Mr. McNamaraBy leave of the House, I thank my hon. Friend for his reply. The speech did not contain everything that I wanted to hear, but it contained something. I thank him for his courtesy at such a late hour.
§ Question put and agreed to.
§ Adjourned accordingly at four minutes past One o'clock.