HC Deb 24 March 1976 vol 908 cc590-602

12.44 a.m.

Mr. Paul B. Rose (Manchester, Blackley)

I am delighted that my hon. Friend the Under-Secretary of State for Employment will be answering this debate, as we worked so well together on the Industrial Relations Bill when facing the Conservatives at that time. My hon. Friend will forgive me if I raise what at first sight may be regarded as a constituency matter, but it epitomises the problem faced in the North-West and affects about a dozen constituencies in the area.

On Saturday, at my advice bureau I received a deputation of workers from ICI, whose works in Blackley will be closed in four years. Already 165 jobs have been lost and 620 more workers will be affected by 1980. This decision is described as unalterable. In almost all cases, manufacturing operations in the works will cease by 1980, and the result will be that on the north-east side of Manchester there will be little industry at all. Indeed, earlier this year I saw a similar deputation from what is locally known as Connolly's, which relies largely on telecommunications products and on Post Office contracts. Already one-third of its work force has been made redundant. Since then we have had some better news. Indeed, the placing of Government contracts is one of the vital parts of an integrated strategy for the North-West and for the North as a whole, because with the new M62 motorway and the east-west road, together with the railway, we must consider this in terms of one large regional problem.

As for ICI, I hope that my hon. Friend will speak to his right hon. Friend the Secretary of State for the Environment concerning the pretext which has been given that the new plant in Blackley cannot be built because of environmental difficulty. One wonders why it is not possible to put other chemical products into production—paints, foam and plastics—or, indeed, any non-toxic chemicals, remembering that this is at a time when the chemical industry plans to spend £2,800 million over the next three years in building new plant in Britain. It is in that context that one looks at the situation in the area.

This is all symptomatic of the position in the North-West, the cradle of the Industrial Revolution, which I trust my hon. Friend and the Government will never allow to become also its grave. The problem of the North-West is that it has not had the lobby that areas such as the North-East and Scotland have had, and the situation has deteriorated imperceptibly. If one looks at yesterday's unemployment figures, which, in general terms, are encouraging, one sees that none the less the North-West still has 6.4 per cent. of its employees unemployed—a figure, seasonally adjusted, of 177,600. One can compare that with the figure for Scotland, about which one hears a great deal of outcry, notwithstanding the far better prospects that Scotland has because of North Sea oil. The figure for Scotland is 6.3 per cent. Perhaps a more significant comparison is with the South-East of England, where the prosperous area of the metropolis has a figure of 3.8 per cent. That means that the North-West is almost twice as badly off as the South-East.

If we consider the vacancies, we find that the position is even worse. For the North-West the number of vacancies, again seasonally adjusted, is 10,800 and for Scotland it is 14,200. The position is a little brighter than I would have been able to refer to had I been speaking only two days ago on the figures for mid- February. That is perhaps a tribute to the strategy of my right hon. Friend the Secretary of State for Employment and other members of the Government. Money has been injected into the economy on two separate occasions—money which, I hope, will be added to in the near future.

The North-West faces a particular problem, for a number of reasons. It has been permitted to slide unnoticed into this inferior position. But the general level of prosperity in the North-West reveals a rather unusual feature. If we look at Social Trends, the rate of consumption can be seen to be still relatively high. What we discover—and it is essential to isolate these areas—is that there are pockets of poverty and neglect in the North-West, and, therefore, it is in these areas that we must look for Government assistance.

Those pockets seem to be spreading, and I want to know what the Government are doing, for example, to give the sort of incentives to a firm like ICI—an enlightened firm which provides employment in my constituency—to remain in an area like Manchester rather than moving to, say, a development area.

We need an urgent review of regional policy in order to create new job opportunities and even more, in the North-West, to safeguard existing jobs, many of which are imminently threatened. In their strategy the Government may offer some rather icy calculations with regard to the cuts in expenditure and the theory behind their policies. They have to be modified to a degree by very important human considerations.

Looking at a map of the North-West and taking Cumbria, the coastal strip—the Fylde coast—Merseyside, and even those meccas of Rugby League like Whitehaven, Workington, St. Helens, Widnes and Wigan, together with North-East Lancashire, we see the reflection of the decline of industries such as cotton and coal and these are perhaps the worst-hit areas. But this is spreading, and I see no reason why the development status of Merseyside has not been enough to protect Liverpool other than that further action is necessary and that the Government must look closely at the steady decline of the North-West, with all the skills and potentialities that are available there.

Why, for example, would it not be a good idea for the future headquarters of the nationalised aviation and shipbuilding industries to be placed respectively in Manchester, which is a great centre of aviation, with Hawker Siddeley, and shipbuilding in Liverpool? That—or, at least, one or other of them—would be an example of direct action that the Government could take.

Clearly there are parts of Lancashire which have borne the brunt of the competition from cheap imports. To take a comparison, although it is always invidious to do so, Scotland receives a much higher level of Government assistance under the Industry Act 1972 notwithstanding Scotland's better prospects and the figures that I have given for job vacancies.

I ask the Minister to consider a special stimulus for the North-West—indeed, for the North of England as a whole, because we must not minimise the position in the North-East. We do not want to be two nations, the North and the South.

There is no doubt that the first package of my right hon. Friend the Chancellor of the Exchequer allocated a fair amount to the North-West with 32.7 per cent. of jobs safeguarded by the temporary employment subsidy, 21.5 per cent. of jobs created by the school-leaver recruitment subsidy and 14.4 per cent. of jobs made available under the job creation programme. But is it satisfactory to employ people virtually to dig holes and fill them up again when there are other possibilities?

I rember an Adjournment debate that I had in the early hours of the morning on the HS146 project, the airbus. It seems to me that, even if it were not commercially profitable, it would be more profitable in terms of the balance of payments to keep the airframe industry going and to help employment in the North-West especially if we proceeded with a project like that, rather than employ people on jobs created specially to cut down unemployment. It makes little economic sense to pay people quite large amounts in social security instead of having them at work creating the wealth of the nation.

In the North-West, the footwear, clothing, television tube, telecommunications and construction industries need special help. Carefully-imposed selective import controls on cheap Asian products—television tubes come immediately to mind—are justified. I have never before believed that they were desirable, but we are in a crisis situation. Almost one-quarter of those employed in the clothing and textile industries are in the North-West Region. We should look at the Thorn Electrical situation at Skelmersdale, the television tube plant at St. Helens which has been closed, and Mullard's. All these companies have been badly hit and are important industries on which whole communities depend. I would welcome the placing of orders by the Government and a purchasing policy which would have a direct impact on the region. I would also welcome aid for building and construction within the National Health Service and a major sum for Operation Eyesore, which has been terminated.

One of the area's difficulties is industrial obsolescence. That sort of environment will not attract bright young executives. It is necessary to provide the sort of environment and infrastructure upon which industry depends.

I appeal to the Minister for an allocation of offices to the North-West. I am fairly satisfied with the number of advance factories, but they will be underused unless there are incentives to fill them.

Over 12 years the region gained only 4,200 dispersed Civil Service posts and 850 new ones. I am delighted that the Equal Opportunities Commission has been set up and that 400 people will be employed by it in the area. That, however, is a drop in the ocean. Much more is needed to tackle the problem. More apprenticeships are needed from employers and the industrial training boards.

My hon. Friend the Under-Secretary of State has announced the creation of new skillcentres in the Middleton and Prestwich constituency, Rochdale and Preston as a result of the Training Services Agency review. I welcome that, but it is only one item among many which we need. There are signs that the Government are responding to the needs of the area, and I hope that this debate will assist in bringing on faster recognition of those needs.

I believed that regional policy was one of the good reasons for this country joining the EEC, but it is ludicrous that out of £38.8 million spent on projects and decided not in Brussels but in this country only £3 million has gone to the North-West. That is less than half the average, leaving aside the special needs of the North-West. The EEC Regional Fund should be channelled westwards, away from the prosperous heartland of the Community.

My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) would also like to take part in the debate. We must look at the problem as a whole with an integrated strategy. I hope that my hon. Friend the Minister will be able to give an ear also to the special problems only 30-odd miles away from Manchester, with a view to developing the North-West as a great centre.

The North-West has a great airport, a canal and all the facilities for shipping. It has great skills, and it has a great history in industry. It could also have a good future in tourism. Where better than Manchester from which to see the beauties of North Wales, the Trough of Bowland or the Lake District, or to take a trip to Stratford-on-Avon or even to London for a few days? Apart from Wales, the North-West is the area most neglected by foreign tourists.

I ask my hon. Friend to look into these matters with a view to injecting new life and prosperity into the very area upon which Britain's prosperity was founded.

1.2 a.m.

Mr. Eric Ogden (Liverpool, West Derby)

Adjournment debates are usually matters between one hon. Member and one Minister, so I am grateful to my hon. Friends the Under-Secretary and the Member for Manchester, Blackley (Mr. Rose) for allowing me a minute each of their time to make a few comments. I should be less than grateful if I did not say that it seems an excellent example of co-operation between Minister, Manchester and Merseyside, which is what this short debate is about.

First, I wish to emphasise that Merseyside and the North-West have always seemed to be among the first areas to be hit by a recession and the last to recover when prosperity comes to the rest of the country. For many reasons we ask that the North-West should have a special call on a Labour Government.

Secondly, I ask my hon. Friend the Minister to bear in mind not only that the North-West has special problems but that special skills are available in it which are not available in the rest of the country. It has opportunities for investment and expansion and it has a mobile work force skilled in electrical, industrial, commercial and other activities.

I urge my hon. Friend to have a proper regard for the interdependence of not only Manchester, North Wales and South Lancashire but the whole of the northern industrial area. We have long passed the time when the problems of the North-West could be settled in the North-West alone. We must look at the axis of the M62 and at the north of our trans-Pennine ridge, from Merseyside, Lancashire and Yorkshire through to Humberside and the North-East Coast. We have common problems that can be solved, with Government help and support, if we look at the problems and opportunities of the area in a northern context. I ask my hon. Friend to use all his power and influence to help the efforts being made by the industrial development associations and local authorities to look at the problems as a northern region.

I thank both my hon. Friends again for the opportunity to take part in the debate.

1.4 a.m.

The Under-Secretary of State for Employment (Mr. John Fraser)

There is precious little time left for me to reply. Perhaps I may begin by telling my hon. Friend the Member for Manchester, Blackley (Mr. Rose) that, as somebody who has lived in Cumberland, whose wife is from Salford and who spent his last holiday on the Leeds to Liverpool canal, I have a knowledge of the area and have considerable sympathy with those experiencing the problems not just of Lancashire but of the whole North-West.

I cannot answer my hon. Friend's detailed comments about ICI dyestuffs, which are mainly a matter for the Department of Industry, but I shall make sure that his remarks are drawn to the attention of that Department.

My hon. Friend also raised the question of the HS146 aircraft. The Government are financing a considerable amount of work at HSA Hatfield to maintain a sufficient tempo of effort so that it is feasible fully to relaunch the project if and when that seems to be justified. The Organising Committee for British Aerospace, and later the Board, will give high priority to that question.

I fully accept that unemployment in the North-West is unacceptably high. Moreover, it is bound up with a number of special regional situations—some areas are cut off, like parts of Cumberland, for example. The regional unemployment figures mask considerable variations within the area. The Government recognise, for example, that Merseyside in particular has an extremely serious unemployment problem, and we are fully committed to bringing down the present unacceptably high level of unemployment.

Although unemployment in the North-West has increased proportionately less than in the country as a whole, this is in part a reflection of the fact that even a year ago unemployment in the region was extremely high. I accept, therefore, that a great deal more needs to be done, not only to bring down unemployment in the short term but also over the longer term to reduce regional disparities.

My hon. Friend welcomed the reduction in the unemployment figures announced this week. It does not amount to a great deal in the North-West, but it is good to see a turn in the tide. But we have not turned the tide completely. We still have a long way to go, and my right hon. Friend the Secretary of State for Employment was right to point out the real hardships for those who become unemployed through no fault of their own and that we must not be complacent about the recent welcome but very modest change in the figures.

A great deal of concern has been expressed about unemployment in terms of prospects for young people—rightly so, because they have their vision blunted most by the effect of unemployment. The Government share this concern because it is important to a person's self-esteem to be able to get a job quickly on leaving school or college, and we know how demoralising prolonged unemployment can be. This is why the recent Government measures were deliberately angled to help young people.

Those measures do not solve the basic long term problem of unemployment, but it was right in things like the job creation programme to do what we could to mitigate the worst effects and to ensure that when the upturn in world trade comes the country is well placed to benefit.

The North-West has had a considerable benefit from those measures. In the job creation scheme up to 12th March, 177 projects had been approved in the North-West, providing 2,318 jobs at a cost of £3.21 million. I must reject my hon. Friends suggestion that this is simply a matter of digging holes and filling them in. The programme is much more helpful, constructive and satisfying than that. There is no reason why the sort of Operation Eyesore projects he mentioned should not be undertaken under the programme.

Under the temporary employment subsidy scheme, up to 19th March 91 applications had been approved, saving 8,533 jobs in the North-West at a total cost of £4.09 million. The recruitment subsidy for school leavers up to the end of February resulted in 5,749 applications being approved.

We expanded the Community Industry Scheme, and the region now has 500 places spread between Liverpool, Knowsley, Manchester and St. Helens. I accept, however, that in relation to the total number of unemployed in the North-West the numbers helped under these schemes have risen relatively small, but they have brought some relief to the area and have proved of particular benefit to young people.

In August last year over 26,000 young people were unemployed in the region, and the present figure is 3,714. That fall gives some idea of the success of young people concerned in finding employment and of the considerable impact of the Government's measures.

Again, a measure not aimed exclusively at young people but also looking at our future prospects was the increase of £70 million to strengthen and accelerate the training programmes, both to alleviate the effects of high unemployment by increasing training opportunities for individuals and to help industry safeguard the long-term supply of skilled manpower. In all, over 40,000 people will benefit from these measures, many of them young people.

On 12th February this year, as part of a set of measures designed to reduce unemployment, the Government allocated a further £55 million for special training in industry. It is hoped that this will produce an extra 30,000 to 35,000 training places in industry in 1976–77. The combined effect of both sets of measures will be to provide between 60,000 and 65,000 extra training places within industry and to increase the target of the number of people to be trained under the Training Opportunities Scheme in 1976 by over 12,000. In addition, training allowances have been increased.

The North-West is likely to benefit substantially from the measures to support training in industry. It is not possible at this stage to give precise figures of the allocation of grants and awards to particular regions. However, it was recently estimated that over 1,700 awards or grants have so far been made in the region.

Under the Training Opportunities Scheme, a total of 10,661 trainees were trained in the North-West Region Training Services Agency in 1975. The target for 1976 for the North-West is 12,700. A substantial proportion of this training is carried out in skillcentres. The North-West already has a more than proportional share of skillcentre places in relation to its population compared with Great Britain generally. There are eight skillcentres and two annexes in the region. A further two at Rochdale and Preston are expected to be operational in late 1976 or early in 1977.

The recent measures to stimulate training should not only benefit the North-West in the short term but should help to ensure that the region has the requisite skilled men and women available when the upturn comes.

Perhaps I may turn to the problems of particular industries and to those measures which the Government have taken to help them. The region should also benefit from the recently announced schemes for the modernisation of particular industries and for selective assistance to encourage companies to bring forward deferred capital projects.

The recent measures to help the construction industry should also be of benefit to the region. Of the £24 million allocated to the English regions on 24th September, just over £6 million is going to the North-West. The region is also to receive £8 million of the £50 million allocated to improvements on public sector housing.

The Government have, of course, recently introduced further restraints on imports of textiles, clothing and footwear. In addition, the Government are providing £20 million to the clothing industry to raise productivity through modernisation and re-equipment.

The Government have undertaken schemes of Stockbuilding. The National Enterprise Board is already discussing with the machine-tool industry ways of providing for the finance for the stockpiling of machine tools of types which are expected to be needed during the recovery. In regional development grants, £40.7 million was paid out in 1974–75 and £22 million in the first half of 1975–76 towards the cost of investment in industrial machinery and buildings.

Twenty-seven million pounds was paid in 1974–75 on the regional employment premium. Payments this year are expected to be around £40 million. There has been assistance under Section 7 of the 1972 Industry Act. Thirty-nine advance factories have been allocated to the North-West in the six programmes announced in July 1974. In addition, the Department of Industry has received authority to purchase land against future advance factory requirements in Tame-side, Oldham, Rochdale, Colne and Bury/Heywood.

The dispersal of Civil Service posts to the regions is, of course, an essential component of regional policy. Between 1963 and October 1975, 4,200 existing Civil Service posts were dispersed from London to the North-West Region and 850 new posts were created. In fact, the has done best of all the English regions. Current plans provide for the dispersal of about 4,500 more posts and some 600 new posts are also to be set up in the region. In addition, the headquarters of the Equal Opportunities Commission has been established in Manchester and will be employing some 400 staff by 1978.

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

Adjourned at fourteen minutes past One o'clock.