HC Deb 11 March 1976 vol 907 cc797-806

12.10 a.m.

Mr. William Molloy (Ealing, North)

I wish to raise the subject of the industrial prospects and future problems facing London. The capital city is governed by the largest local authority in the world. It is the greatest and most fascinating capital city, but it faces a serious problem.

There is something special about London and the people who live here. I am not asking that they should be given more favourable treatment than people elsewhere in the United Kingdom. I am asking most earnestly, however, that they should receive the same square deal that the Government are endeavouring to give to other parts of the country.

London has a great history in trade and commerce, in shipping and in docks, and in the arts. Since the beginning of the century, there has grown up a myriad of science-based technical and technological industries. London has been a magnet. It has attracted people from all over these islands and from many other parts of the world. The growth of industry in London has added to the wealth of the nation, and often that has been at great cost in terms of the problems created for London, particularly on housing, transport and education.

Now the capital city has a problem not only of unemployment, but of the loss of industry. In other words, unemployment is growing and the means of combating it—the creation of industry—is being whittled away. Originally unemployment was much more serious in other parts of the United Kingdom than in London.

The strategy of the Labour Government from 1966–70, continued, to a degree, by the last Tory Administration, was in general correct. It was to attract industry to areas like South Wales, the North-East and Scotland where unemployment was at its worst. But the attempts to cure the ills of other parts have created a threat to London. Industrial expansion in London has ceased beginning in the great docklands and spreading to the outer fringes of the city. In its progress this development has passed through my borough of Ealing and my constituency of Ealing, North. The industrial decline in Greater London will before long represent a serious threat.

The dangers inherent in this trend are receiving detailed study by the London group of Labour Members who hope to counter the threat before it becomes a crisis. We have held special meetings and we hope that later next week we might even meet the Prime Minister and other Ministers. That shows the degree of our anxiety. We are anxious, and we want action to reverse this dangerous trend.

This week the review of the South-East Development Plan was published, but it does not go far in acknowledging London's problems. It mentions the possibility of special development areas in London, although I regret that it still adheres to the concept of "growth areas" outside the green belt. It is possible that when this examination took place the nature of the current problem did not appear to be as serious as it is. Therefore this review of the South-East Development Plan is already out of date, because it has not taken proper cognisance of the growing problem of unemployment and loss of industry in Greater London.

Although I acknowledge that the unemployment level of 3.8 per cent in Greater London is low by national standards, it varies throughout London. In some areas it is even a little below the national average and the general average for London, but in other areas it is as high as 82 per cent., in other words, higher than the national average.

Greater London is a vast area where roughly one-fifth of the nation live, work and play. Therefore, it stands to reason that the problem is an overall one. That makes it all the more complex. In the east of London, in dockland, unemployment is high. In the area of Ealing it is not nearly so serious but it is growing. What is more, unemployment has a deleterious effect not only on the lives of ordinary people, but upon any family whose breadwinner or contributor to breadwinning has lost his job.

It has an additional effect in this great city. It has an effect on our youth. Too many young people wander the streets and do not have enough to do. I love London, as probably do most hon. Members, but it can be a dangerous place for unsuspecting youths who, instead of learning a trade, being apprenticed or working, are at a loose end, wandering around this great city. I hope that my hon. Friend will take that feature of unemployment into account.

In the London borough of Ealing can be found some very skilled trades such as glass-making, engineering and the manufacture of valves. All forms of science and technology are represented. Many of the firms engaged in those types of activities have closed down. As a result some of the specific training courses that we run in our admirable comprehensive schools are superfluous because there are no jobs for those who complete them. At one time those industries, by sensible liaison with the education authority, provided the new skilled labour to replace those skilled people who retired. That is a serious aspect of the problem.

I do not wish anxiety to move to crisis before action is taken. There is a need now for concerted effort by Ministers, constituency Members of all parties, the GLC and the London boroughs to stop this somewhat fearful trend, and not to wait until it builds up into a crisis before we unite to do something about it.

Another aspect of the problem is that we have lost former industrial sites to what is called "industrial warehousing". Industry has moved out of London, some of it because it responded to appeals made by the last two Administrations, Labour and Conservative, to go to areas where unemployment was high. The magnet of London attracting industry has lost a great deal of its power.

What is happening now in Greater London, with the great length of the River Thames, with its warehouses, barges and so on, and Heathrow Airport and another airport not very far away, is a mushrooming of warehouses. It is not the mushrooming of warehouses in itself about which I am alarmed. I am alarmed because they are being built on sites which once housed attractive industries employing skilled people.

In my constituency, on the site of a factory that once employed 1,500 skilled men there is to be a large warehouse which will employ about 20 clerks and 30 fork-lift truck drivers. That story can be multiplied across London. That is another aspect of the decline of industry in Greater London. We do not want this London of ours to become a vast depository for depositories.

I ask my hon. Friend to allow the GLC to have representation on the National Enterprise Board. I do not want to be fobbed off with an argument about a geographical basis. London has this problem because of geographical considerations of areas suffering from high unemployment in previous years.

Unless something is done soon about London's industrial decline, it may become irreversible except at great cost, which even the Treasury will not be able to afford. If London's industrial economy declines, so does London. That could have a grave psychological effect for our entire country.

Arthur Mee, in his celebrated book "London—The Eternal City", wrote: London will not be destroyed—it is the London of ages past—the London of ages to come. I promise my hon. Friend and my right hon. Friends who are involved in this problem that the London group of Labour Members, in concert with the borough councils and the GLC, are devising what we consider to be practical proposals and are determined to re-establish industrial London. We earnestly seek my hon. Friend's full co-operation. I believe that if my right hon. and hon. Friends will continue to give us the cooperation and help that we have had in the past, we shall solve the problem.

That will be to the benefit of not only Greater London but the country as a whole.

12.24 a.m.

The Minister of State, Department of Industry (Mr. Gregor Mackenzie)

My hon. Friend the Member for Ealing, North (Mr. Molloy) has raised tonight a subject which I know causes a great deal of concern to him and, indeed, to all of our colleagues who represent constituencies in the Greater London area. It is also a matter that has been troubling the GLC and a number of London boroughs. My hon. Friend will know that my right hon. Friend the Secretary of State has had discussions in recent months with Sir Reg Goodwin and some of his colleagues. I, too, have had discussions, both formally and informally, with a great many Members who are concerned about the problems in London.

My hon. Friend has often pointed out to me, both publicly and privately, the way in which his constituency has been affected by redundancies and factory closures in recent years. I am bound to say, however, that whilst Ealing has been particularly hard hit by the number of large employers who have closed down or moved out in the past 10 years, this is really only a part of major changes in the pattern of employment in South-East England which we have recently been experiencing.

Between 1961 and 1974, manufacturing employment in London declined by nearly half a million; or, to put it another way, about a third of London's jobs "disappeared" in that period. At the same time, in the rest of the South-East employment increased by some 900,000. About a quarter of these jobs were in manufacturing and about 700,000 in service industries.

These very large changes in the distribution of employment have been taking place in a situation in which London's population has been declining rapidly whilst population in the rest of the South-East, to which Londoners have been moving, has been increasing. The employment changes are obviously related to the population trends, but whereas the decline in London's population has been well established for a number of decades, manufacturing employment has been falling for only the past 10 years or so.

In that period the growth in the population of parts of South-East England—for example, the new towns, expanding towns, South Hampshire and the Home Counties—has made those areas more attractive locations for London industry. The movement of firms out of London has also been encouraged by the reduced availability of labour in London and its greater availability elsewhere. Despite these changes, however, London remains one of the most important industrial centres in the country.

It is really not true to say—this is said by some although not by my hon. Friend tonight—that the Government's regional policies, which aim to encourage industrial movement to the assisted areas, are the cause of all the difficulties. As a result of my concern about London I recently asked my Department to study in depth the decline in industrial employment in London between 1966 and 1974. In that period manufacturing employment fell by 380,000. But only 27 per cent. of these jobs were lost as a result of firms moving from London to new factories in other parts of the country. Indeed only 9 per cent. were the result of moves to the assisted areas. On the other hand, nearly half the manufacturing employment lost resulted from the straightforward closure by firms of their London factories. Most of the rest was due to reduced employment in factories which still remain in production.

My hon. Friend will accept, I am sure, that many of the difficulties in which London firms find themselves are due to the present serious economic recession, and that once the economy revives—as it now shows signs of doing—industry in London will be the first to benefit. Nevertheless, I can assure him that I accept, and the Government accept, that there are factors at work which are making London less attractive to industry at the present time. My hon. Friend has mentioned some of these factors. They include old and inadequate premises, lack of room for expansion, labour shortages and rents and rates.

The solution to some of these problems is in the hands of the GLC and the London boroughs. Other problems can only be solved over a period of years with the co-operation of many organisations and agencies. The Government are anxious to see London industry expand and invest, as we are anxious to see all British industry expanding and investing, and the measures we have introduced in recent months will, we trust, stimulate investment. These measures are, of control most sensitively.

Some hon. Members have claimed that the Government are inhibiting industrial development in London by their operation of the IDC control. This is just not true. IDC control is an essential instrument available to the Government in promoting regional policies and encouraging appropriate firms to expand and develop in the assisted areas. But I assure my hon. Friend that we operate the IDC control most sensitively.

Since 1971, about 94 per cent. of all IDC applications in London have been approved and no application has been turned down in London so far this year. My hon. Friend will remember because he took part in the debate at the time that my hon. Friend and predecessor, the Member for Liverpool, Walton (Mr. Heffer) told the House in February 1975 that no IDC application of less than 10,000 sq ft would be refused in London without having been seen personally by the Secretary of State. That system has been operating since then.

After my hon. Friend and other Labour Members from London had raised the matter with me, I was able to announce to the House last month another relaxation of the IDC control which should be of particular benefit to London industry. I am concerned about the number of empty and obsolete factories in the big cities, and the experimental scheme which we are introducing will permit IDCs to be issued—subject to certain conditions—for the speculative replacement of such buildings by modern industrial premises.

Mr. Molloy

Will my hon. Friend not include in his consideration this appalling new term "industrial warehousing"? This is part of the threat for the future.

Mr. Mackenzie

I understand the point my hon. Friend is making. He has raised it with me in regard to what is happening in his own constituency.

The arrangements we have made in relation to IDCs should help industrial renewal and could lead to great improvements in industrial efficiency and working conditions. I hope that London industrialists and developers will take full advantage of the scheme.

My hon. Friend has mentioned the high levels of unemployment in parts of London. It is true that the present total of 150,000 unemployed in London is bad, but we have to put it in perspective. We have to bear in mind the sheer size of London and the fact that there are more people in work in London than in the whole of Scotland and Wales put together. London's rate of unemployment of 3.7 per cent. is below the national average of 5.6 per cent., below Scotland at 6.8 per cent., and below Wales at 7.4 per cent. London also has a lower rate of unemployment than the rest of South-East England.

I am often told, and my hon. Friend stressed this point, that there are black spots in London where unemployment is as high as in the development areas, and rates of 10 per cent. are often quoted to me. The Department of Employment does not publish separate unemployment rates for different parts of London, or for parts of other large cities. The amount of cross-travel from home to work by Londoners would make such figures quite misleading. But, of course, there are some parts of London where jobs are less readily available than others and some hon. Members claim that the employment difficulties in these areas are comparable with those in the development areas.

But the Government really must look at the national position. Other large cities in the assisted areas—Liverpool and Glasgow, for example—have very much higher unemployment than London. They also have their unemployment black spots as I know, because I represent one of them—but their black spots are far more numerous, with employment difficulties two or three times more acute. Moreover, the regions surrounding these cities do not have the same share of modern growth industries which exists in South-East England.

The Government remain committed to regional policies which involve giving priority to the encouragement of new industrial development in the assisted areas, where employment problems are most acute. My honourable Friend will recognise, I am sure, that the incentive to industry to go to the development areas would soon lose their effect if similar incentives were given to firms to develop in London, and I cannot believe that any hon. Member would want us to abandon completely our regional policies.

My hon. Friend expressed concern for the future of industry in his constituency and in adjoining constituencies. I cannot, of course, give advance assurances about whether particular factories are likely to remain open, expand, or contract, but I assure my honourable Friend that I shall continue to watch closely the changes at all major London establishments. We shall receive advance notice of any proposals that may give rise to serious redundancies in London, and we shall have the opportunity to consider whether rescue action by my Department is appropriate. When considering this we do, of course, pay particular regard to the likely effect of redundancies or closures on the local unemployment situation—though we also have to consider whether any alternative plan might have an even more adverse effect on any establishments of the company concerned in other parts of the country.

My hon. Friend raised the question of the possibility of a London Member serving on the National Enterprise Board. My hon. Friend has raised this subject with me both publicly and privately. The composition of the National Enterprise Board has to be broadly based to take account of the situation in all parts of the United Kingdom, assisted areas or not. I am sure that the members of the NEB take into consideration the problems of London.

My hon. Friend will be pleased, as I am, that the Government have ensured that appropriate warning of industrial troubles has to be given in time for action to be taken. The NEB and the planning agreements will also strengthen our hand in anticipating and dealing with future industrial problems.

I appreciate the concern and interest of my hon. Friend and all London Members of Parliament. I willingly give my hon. Friend the undertaking that Ministers will continue to co-operate with my hon. Friend and his colleagues, because, like him, we want to see a prosperous London.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes to One o'clock.