HC Deb 17 June 1976 vol 913 cc945-56

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Frank R. White.]

12.59 a.m.

Mr Mike Thomas (Newcastle upon Tyne, East)

I apologise to the Minister for keeping him at this hour and also because, given a choice on this topic between the Department of the Environment and the Department of Industry, I chose his Department. The issues that I shall raise also involve the Civil Service and the Department of Energy. I apologise to the Minister for the breadth of responsibility which I am imposing on him.

On 19th January this year the Newcastle City Council produced a document entitled "Jobs and Houses in Newcastle". I shall refer to that and speak of the problems of economic development of our great and historic city and the problems of the three major employers in my constituency.

I begin with Swan Hunter, two of whose shipyards are in Newcastle upon Tyne, East. About 4,000 people and their families are dependent on the prosperity of those yards. We are grateful for the Government's support through grants and financial help to the yards and through orders for that company, the most recent being the Type 42 guided-missile destroyers and the through-deck cruiser, which will bring work to the Swan Hunter group. My purpose is to place on record my support and that of the trade unions within the Swan Hunter group for the Government's Aircraft and Shipbuilding Industries Bill and to say again that every one of the thousands of men and women in Newcastle who depend on shipbuilding for their livelihood will remember that the Opposition have placed their jobs and hope for the future in jeopardy by their behaviour in the last three weeks. My hon. Friend should tell his colleagues that Newcastle wants the Bill, needs the Bill and can afford no further delay in its progress. As the premier shipbuilding area in the country we shall find it hard to accept, when the Bill is passed if any arrangements are made for the headquarters of British Shipbuilders to be centred anywhere but in Newcastle.

I now turn to the firm C. A. Parsons, one of Britain's two turbo-generators manufacturers, with over 6,000 workers in my constituency. Again the picture is one of uncertainty of those workers and their families. About 2,000 workers face loss of jobs within the next two or three years if the energy order book does not pick up, The Government have direct responsibility. They authorise the CEGB's ordering programme and could do four things to help my constituents to see their future more clearly. They could get on with the steam-generating heavy water reactor project and at least ensure that there is no further slippage in the timetable.

The Government could get on with considering the extension of the Drax B coal-fired power station. They could ensure that CEGB treats suppliers fairly over repairs and spare parts. They could consider whether the stockpiling of generating sets, along the lines of the present machine-tool programme, might not be started in present circumstances.

I welcome the CPRS's inquiry into the problems of electric plant suppliers and the decision of the Government to have discussions for planning agreements with the industry. But I should make one matter clear to my hon. Friend. Unless the Government make their intentions clear by placing orders, their first venture into planning agreements will be to ask my constituents to agree to massive planned redundancies. That would not be the way to start the planning agreement process for which we hold out so much hope. The third major employer in my constituency is the Government, in the form of the Department of Health and Social Security. My hon. Friend will know the auxieties of the workers at the Longbenton offices of the Department over the public expenditure White Paper. I hope that the Government will maintain employment at Longbenton, for to create jobs in places such as Sunderland and Washington New Town while losing them in Newcastle would make nonsense of their dispersal programme for Civil Service jobs.

These specific anxieties must be seen against the general background of the decline of the whole economic base of Newcastle in the past 20 years. I have referred to Swan Hunter. Employment in shipbuilding in Newcastle has declined by over 40 per cent. since 1964. At Parsons there have been substantial reductions in the work force—a thousand or more in the past two or three years, and more before that. Overall, between 1961 and 1971 Newcastle lost well over 10 per cent. of its jobs—22,000 in total.

Unemployment has been consistently high, despite the fact that over the same period 28,000 people moved out of the city. In Walker, the heart of my constituency, male unemployment when it was last calculated for that area in 1971, exceeded 13 per cent. It is almost certainly considerably higher now.

Even the dispersal of Civil Service jobs has had only a small effect. Existing and planned dispersal to Newcastle since 1963 amounts in total, including jobs yet to come, to only about 1,300 jobs. Down the road, Washington New Town is already attracting manufacturing industry successfully. It will get 3,000 or more jobs—about six times the proposed dispersals to Newcastle.

The burden of my argument is that the Department of Industry and the Department of the Environment have placed far too much emphasis on development of new industrial areas in the past and far too little on sustaining our existing communities. Between 1961 and 1974 the English Industrial Estates Corporation, for example, produced 12,354 jobs in the Tyne and Wear metropolitan area, yet only 941 were in Newcastle and even they were on the outskirts. In the five districts of Tyne and Wear there are 30 advance factories and there are 49 factory units at Washington New Town. Gateshead has seven advance factories, North Tyneside five, South Tyneside five, Sunderland district 13. Newcastle City has none.

I should like to take this opportunity to raise with my hon. Friend the fact that one advance factory was approved for Newcastle in January 1973, but there is still no site settled for it because the Department is unwilling to pay the higher costs of a city location compared with a peripheral location. This problem is caused mainly because of the policy of building on only a quarter of the site to allow for expansion. That is a rational policy only where land is cheap. On expensive land, expansion space should be in the form of buildings, not land, and expansions should be accommodated by moving industrial tenants to larger buildings as they grow. Just across the river from my constituency, in the Team Valley, that is precisely the policy that is followed successfully.

The Government will not even let local authorities make up for these deficiencies. I should like my hon. Friend to tell us why the Government appear to take exception to the powers that the Tyne and Wear metropolitan authority, the Tyne and Wear County Council, is seeking in its local Bill, which is now coming before Parliament.

I am deeply concerned, as are many thoughtful people in the city of Newcastle—and this applies to many other old industrial centres, particularly in the North of England—that if the erosion of the employment base of the city continues at the rate we have experienced over the past 10 to 15 years the whole community will be in danger, because the migration out of the cities is selective. It is the younger, fitter and the better-paid who leave the cities. This unbalances the community, and unemployment among those who remain tends to rise. The need for community support services tends to increase while the ability to provide them, the economic base from which they can be paid for, tends to diminish. This should not be allowed to happen.

I conclude by making one or two suggestions to my hon. Friend of measures that might be taken to prevent this happening. The survival and regeneration of Newcastle as a community would be important at any time but it is particularly important in a period of low growth. The community and fabric of Newcastle have a store of social and economic capital which has been accumulated over generations, and it is an asset of enormous value not just to those who live in the city but everyone in the region outside.

In addition, the new towns policy was pursued because it was felt that city centres were overcrowded with people who needed to get out and industry needed to get out to the green-field sites. That was fine in the past, but now in its way that policy is starting to unbalance the whole community in many just our industrial cities. Newcastle is just one example of that.

We cannot go on approving all sorts of investments in new towns when in so doing we are allowing the capital already invested in existing cities to be run down and used to less advantage than it might otherwise he. For this reason an economic strategy for regions and particular towns and cities must have some feeling, relevance and sincere appreciation of the importance of the existing communities as well as the new.

I hope my hon. Friends from other towns and cities in the North-East will forgive me if I speak with special pride of the importance of the community in Newcastle. It is declining at a rate which is starting to worry us all, and at a rate which could see us in a position where the city will effectively die as a balanced community. One part of that will be the responsibility of other elsewhere, the Department of the Environment and so on, but another part of it is firmly in the lap of my hon. Friend and his colleagues, because if the economic base of the city cannot be sustained, if jobs cannot be found, in the end the city will die in the way many American cities have started to die.

I do not want to see that happen to the city I represent. I am sure my hon. Friend would not want to see it happen to Swansea, which he represents. I hope he can give some assurance that the Government appreciate the problem and are starting to take some steps to deal with it.

1.14 a.m.

The Minister of State, Department of Industry (Mr. Alan Williams)

I thank my hon. Friend for giving me this opportunity so early in the day to deal with the problems of his area. I share his concern at the effect which the filibustering activities of the Opposition will have on the shipbuilding industry. I fully take his point about jobs in his area being placed in jeopardy. It is tragic that the Opposition are playing political games when such important stakes are involved, stakes of extreme importance to the individuals working in these industries.

My right hon. Friend will note the point that my hon. Friend made about the headquarters of British Shipbuilders. It is a point of view which has been intimated as of some concern to people within his region. I can understand why, because of the region's involvement with the industry, and I will ensure that his remarks are drawn to the attention of the Secretary of State.

Regarding my hon Friend's comments about the boilermaking and electricity generating industries, I fully understand his concern over the SGHWR project and Drax B. I think that my hon. Friend equally well appreciates that we have seen the most drastic fall-back in the demand for electricity as a consequence of the change in fuel prices over the last couple of years. This has led to a situation where surplus capacity rather than demands for capacity tend to be the order of the day.

I know that my hon. Friend is aware, from his comments to me in conversation and from his comments in the Press and in broadcasting, of the review being carried out into the problems of the turbogenerator and boilermaking industries. He will be fully aware that we expect a report in the autumn. This hardly represents a major delay, as we are now well into June. It will give us an opportunity to assess the situation in a proper perspective.

Mr. Mike Thomas

My hon. Friend will appreciate that it is orders that we are after and not talks and reports.

Mr. Williams

My hon. Friend will equally appreciate that he wants the right orders, and so do we. Creating orders purely for the sake of it would not necessarily be the most sensible way in which to conduct our business, and I am sure it is not the way the industry would want us to do it. Therefore, it is imperative that we make the right decision when the orders are placed. The objective of the review is to make sure that the correct decision is taken, and, as I have indicated, we shall have the report of the review before very long.

I fully appreciate my hon. Friend's point about the advance factory. He will himself be aware that originally it had been hoped to obtain land at Kenton Bank Foot in North-West Newcastle. This was privately-owned land but, as my hon. Friend will, I am sure be conscious, the negotiations were not successful, and we therefore had to look for alternative sites.

The site we considered was in conjunction with the local authority, but it has not been possible to agree suitable terms. My hon. Friend will know that the Department of the Environment, to which he may care to direct some of his comments, has to inform the local authority that it should not sell below the district valuer's estimate of the correct price for the land.

Certainly I will take note of my hon. Friend's point about the area of land required. I am not fully familiar with all the possibilities he has intimated. I will look into it but I do not want to build up too many hopes. He has suggested that it might be possible to meet the requirements on a smaller part of the land than that currently envisaged. I will discuss it with my officials, but again I ask him not to take this as a commitment.

Mr. Mike Thomas

The problem is that if there is an insistence, as the Department and the English Industrial Estates Corporation appear to be insisting at the moment, that three-quarters of the land must remain unused for expansion, it makes the purchase of a site of which only a quarter is to be used extremely expensive.

Another problem is that the statutory undertakers are reluctant to release quite large amounts of land available in the city.

Mr. Williams

I fully noted my hon. Friend's point about the amount of land being kept for expansion, and will discuss it with my officials. I would not want to raise false hopes at this stage that this will automatically provide a solution, but I assure him that his recommendation will be looked at. I fully realise his concern about the problems of the Newcastle area. As he rightly said, it is a problem affecting many inner urban areas. It is for that reason that the Department of the Environment and the Home Office have set up a series of studies on the problems of these areas. I assure my hon. Friend that if, in the light of those studies, changes in policy appear to be necessary, the Government will have to consider such changes. We want to get the results of the studies. If I remember aright, two are being conducted by the Home Office and one by the Department of the Environment.

Mr. Mike Thomas

Why is the Minister's Department not playing a more active part? In Scotland, where the Department of Environment and the Department of Industry are much more closely related, there is a more satisfactory approach to development in old communities as apposed to new towns.

Mr. Williams

If my hon. Friend has in mind Glasgow, where a substantial sum is being spent on urban renewal, that expenditure comes out of the total sum already made available to Scotland and is part of the budget provision.

There is the difficulty of deciding how many objectives we can pursue in a global policy. We have substantially modified over the years the approach to regional economic planning. I recollect, when I first came to the House, speaking from the position from which my hon. Friend is speaking and urging that we should break away from the unitary development area and go for multi-tier areas, so that we could distinguish between relative needs within development areas. It was my good fortune, in going to the Department of Economic Affairs, to play a part in bringing forward policies to set up the special development areas and subsequently, as part of regional planning, the intermediate areas. We have developed a gradation of policies to meet a gradation of needs.

When the needs are as great as they are at present, there are limits to the number of objectives we can pursue. With unemployment as high as it is in the Northern area, it is important to get as much industry as we can into the North. We can hardly overcrowd some areas with job opportunities while other areas are left in need. Our priority at this stage must be to make it easy for the business man to choose the site he wants in the region. I recognise that that is not the degree of fine tuning for which my hon. Friend asks and that in the light of the studies to which I have referred we may have to modify the policy but for the time being, with structural unemployment at a high level on which has been superimposed recessional unemployment, it is imperative to do all we can to provide job opportunities in the region.

I recognise the conflicting requirements of individual localities, but there is a travel-to-work area which is substantially greater than the area covered by the individual authority. We are, therefore, justified in looking to job provision in the travel-to-work area rather than in individual localities.

Mr. Mike Thomas

The implication of that is that if we are not careful we shall get an imbalance. What has been a thriving industrially-based city will become a dormitory town which everyone leaves to go to work. That is the reverse of what is understood in the metropolitan South-East by a travel-to-work area.

Mr. Williams

I fully understand my hon. Friend's concern. In America the centres of many cities are being regenerated. In my previous Department—with which my hon. Friend is very familiar and on which he is knowledgeable—I was frequently warned of the danger that hypermarkets would denude the city centres, on the American pattern. I am fully conscious of that difficulty, but I ask my hon. Friend to bear in mind that Newcastle has many natural advantages. It is a historical centre for the region. It has an administrative and commercial centre, with the advantages and disadvantages that arise from that. The disadvantages are that there are complex inner urban problems. These problems arise elsewhere, but they do not arise substantially as a result of the original policies. They are more characteristic of the pattern of development taking place in cities throughout the country.

The concentration of housing development in peripheral areas because land is available means that there is a tendency for industry to follow to the green-field sites, if possible. It does this because these sites are cheaper, and there is more opportunity to expand and have a more efficient layout. This is not the case with inner city sites. One understands why the industrialist chooses to go outside the main cities rather than stay within them. He is attracted by the ease of access to the national road networks, and often tries to get as near the motorway links as he can.

These problems which draw industries to the edges of cities are often superimposed on the decline of traditional industry. This has happened in Newcastle. But Newcastle is an administrative centre of considerable standing, and, although my hon. Friend was not exactly glowing in his comments about the administrative jobs which have been created, the fact is that the city now has the major Department of Health and Social Security complex with 12,500 jobs. Also, we shall add substantially to the number of Civil Service posts in the Northern Region as a result of dispersal. There will be over 3,500 jobs added in the region. Other jobs will be created—not by dispersal—by the siting of the Capital Tax Office at Stockton, and the Development Land Tax Office and Land Registries will also add to the work force. In fact, a total of 7,500 jobs will go to the Northern Region.

Mr. Mike Thomas

The Minister makes my point precisely. Almost none of those jobs will go to Newcastle, and the DHSS central office has been at Newcastle since time immemorial. There is no point in talking about jobs in Stockton, Sunderland, and Washington New Town when the number of jobs for Newcastle will be very small indeed.

Mr. Williams

My hon. Friend should bear in mind what is available privately as well as from national sources within the Newcastle area. Within the Newcastle district there is 32,000 square feet of factory space actually available, with another 99,000 square feet under construction, or to be developed. Private development which is taking place within the city will add a valuable 250,000 square feet of office accommodation, with another 115,000 square feet planned.

While I fully understand the sincerity of my hon. Friend's advocacy of the needs of his area, he must not over-estimate, the extent to which the pattern he has described has developed. There is considerable promise still for the area and in the upturn taking place—

The Question having been proposed after Ten o'clock on Thursday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursant to the Standing Order.

Adjourned at twenty-nine minutes past One o'clock.