HC Deb 17 February 1977 vol 926 cc791-848

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

7.30 p.m.

Mr. Robert Hicks (Bodmin)

It is a custom of this House for hon. Members to declare their interests. This I do willingly in that I was born in Devon, have had the good fortune to live and work all my life in the West Country, and now represent a Cornish constituency. Thus it both saddens and annoys me that in opening the first debate for some years on West Country affairs on the Floor of the House—the last occasion being when my right hon. Friend the Member for Taunton (Mr. du Cann) did so in 1968—it should be because our region has the most severe unemployment of any part of the United Kingdom.

Let me put this in perspective statistically. At present, the South-West Region has an unemployment figure of 7.1 per cent. compared with the national average of 6.1 per cent. To the casual observer, this may not appear to be too serious a problem. However, it conceals the unfortunate fact that successive Governments have grouped together into our South-West Region two divergent and contrasting areas. The region takes in Gloucestershire, Avon and Wiltshire, whose economic and social structure and geographical considerations are very different from those of the far South-West counties. Indeed, Bristol, our so-called regional capital, is nearer to London than it is to Bodmin. The further west one goes, so the lack of job opportunities increases, the average level of incomes decreases, there is a narrowing of the industrial base, and we become more dependent upon the traditional forms of employment, such as agriculture, horticulture, fishing, mining and quarrying and tourism, supplemented by only scattered pockets of light industry.

Such is the gravity of the position today that the South-West Development Area, which comprises most of Cornwall and North Devon, has an unemployment figure of 11.8 per cent., which is the highest for any United Kingdom development area. Merseyside, the next worst affected, has 10.6 per cent. Scotland, which is third in this unfortunate league table, has 8.4 per cent. Cornwall alone has an unemployment level of 12.8 per cent., while in certain parts of my constituency, such as the Liskeard-Looe employment area, the January 1977 unemployment figure was 14.9 per cent.

Sadly, the unemployment position in respect of school leavers reflects this trend. In the town of Bodmin itself, of all the school leavers unemployed in August of last year, 26 per cent. still have not found jobs.

One of the fundamental messages which I wish to impress upon the Government is that at present it is not only the older industrial areas with very high urban concentrations of populations which are suffering. Rural districts also have equally severe problems. Rural deprivation can be as great as that of the older inner city areas. It is for this reason that I believe that the Government are mistaken in their policy of allocating the country's scarce resources on such a large scale to the inner cities. Just because there are fewer Socialist Members representing rural constituencies that does not mean that our needs and requirements should be ignored.

I recognise that certain of the economic difficulties facing the nation reflect the international situation. But I believe that actions by this Government have aggravated the position in the South-West as a result of their own incompetence and economic mismanagement. For example, the Government's approach to the taxation of smaller companies and the self-employed leaves much to be desired.

The South-West is greatly dependent for its economic livelihood upon these two groups. One in five of the men and women currently at work in my constituency is self-employed. In addition, only if the cash flow situations of these smaller units can be improved and only if the various demands placed upon such companies and individuals by the Government are lifted can we as a country derive maximum output and the subsequent expansion of these business enterprises. The Minister must realise that in the West Country it is the small companies which are the wealth creators and thus the providers of employment. At present, initiative is being stifled and profitability is being kept to a minimum. Unless we reverse the trend quickly, adequte investment will not be forthcoming and future employment prospects will be dampened rather than made better.

Another way in which the Government have accentuated the problems has been the constant changing of taxation rates, the classic case being the introduction of a differential VAT rate, which had an extremely adverse effect on two specific industries well represented in the South-West, namely, boat building and the manufacture of television sets.

I recall the debates in Committee on the Finance Bill when we attempted to bring home to the Government how putting up the top rate to 25 per cent. on these two industries would have very severe and damaging effects on local employment in the South-West. In 1973, a major national manufacturer of television sets was persuaded to come to Saltash, in my constituency. This would have created 400 jobs, many of them quality jobs in the company's research and development division with definite career prospects, especially for younger men and women with good qualifications. Sadly, that company, despite making all the arrangements, including having a factory constructed, had to back out. One of the reasons for that was the Government's action in increasing the rate on television sets to 25 per cent. and the rate on television rentals as well.

More recently, the decision to withdraw the regional employment premium so abruptly had an extremely adverse effect on companies located in the South-West Development Area. Ministers are ill-advised to claim that the effects of the withdrawal of REP, which is worth £4 million to the South-West Development Area, will be offset by the additional resources being allocated through selective assistance to industry, the extension of temporary employment subsidies and job creation schemes.

I say that for the very good reason that many of these programmes are available throughout the country as a whole. They have no regional implications. Thus, areas such as the far South-West may be placed at a further disadvantage compared with the rest of the country.

There is one specific form of economic activity whose present plight is such that I wish to draw attention to it. I refer, of course, to the building and construction industry. Because of its lack of a wide industrial base, the South-West is far more dependent upon this industry for employment than most other parts of the United Kingdom. This is confirmed by the fact that unemployed building workers in the South-West now constitute 1.4 per cent. of the total work force of the South-West Region compared with a figure of 0.9 per cent. for the country as a whole. I think that that illustrates the dependence upon the building and construction industry.

It is important for the Secretary of State to realise that any public expenditure cuts involving construction projects, whether they be local authority housing, roads, schools, health facilities or whatever, have a disproportionately adverse effect on the overall level of economic activity in regions such as the South-West. That is why we believe that the emphasis now being placed on supplying special aid for the older urban areas is so unfair.

We believe that such is the magnitude and intensity of the various problems currently facing the South-West that it is right to bring them to the attention of the Government this evening. The people of the West Country are good, responsible and loyal citizens. They are as bewildered as I am at times by certain trends and developments that are taking place in our society. However, on this occasion they are quite clear and determined in their attitudes. They are annoyed that a Government who claim to represent all sections of the community—I remind the House that in the Bodmin Division alone average earnings are 12 per cent. below national average earnings—are insensitive to the real difficulties that those in the South-West now face.

People are people wherever they live and work. On the basis of any objective assessment, no Minister can deny that the South-West Region is passing through a very serious phase. There is a limit to the level of taxation and bureaucratic interference that Governments can impose upon the business and commercial sections of the community. That applies to employers, employees and the self-employed. In my view the limit has been reached. If the Government wish to assist peripheral areas such as the South-West they should acknowledge that fact and make a clear commitment that they are prepared to take the necessary remedial action as an immediate priority.

The people of the South-West do not wish to be regarded as the forgotten region of the United Kingdom. They are looking to the Government to give them some sort of meaningful encouragement

7.43 p.m.

The Secretary of State for Employment (Mr. Albert Booth)

This is the first occasion on which I have debated with the hon. Member for Bodmin (Mr. Hicks) across the Dispatch Boxes. I congratulate him on the way in which he opened the debate. The hon. Gentleman has displayed a considerable knowledge of the region as well as considerable concern. If he has not been thoroughly objective in the comparative position of his region with others, I can very much understand the reasons for that.

I welcome the opportunity of debating unemployment in the South-West because I am conscious that when we debated North-West regional affairs a fortnight ago the debate was a valuable two-way process that enabled Ministers to respond to some of the major issues being raised and enabled Back Benchers to make Ministers more aware of their concern about unemployment in their region, and in doing so to become more aware of the concern of their constituents.

It is because this will be a relatively short debate that I want to keep my contribution short so that I may listen more to what Back Benchers have to say. I shall be short but not because I have any wish to avoid facing a number of the issues that come up strongly in employment terms in the South-West. I am glad that my hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food, is on the Government Front Bench not only because he is concerned about agriculture in the region and keeps me fully aware of its employment implications, but because he and I in our respective capacities visited the South-West at the same time. Last year we seemed to follow one another around the country. We visited the South-West and considered its problems at the same time.

Although the South-West contains about 7 per cent. of all the employees in the country, it has 8 per cent. of the unemployed persons. That is a measure of the problem that is faced by the region. I readily accept what the hon. Member for Bodmin said about the overall statistic of regional unemployment in the area. I accept that it masks considerable variations. Although unemployment rates are well below the national average in places such as Gloucester, there are pockets of high unemployment in places such as Penzance. Further, the statistics do not reveal the hardship that faces individuals in the South-West.

Clearly, unemployment does not affect all individuals equally. Some people may find another job very quickly. Although their period of unemployment is an experience that they would not wish to repeat, viewed in retrospect it is a short transitional phase between one job and another. But the hardship of unemployment in the South-West is probably better gauged by the number of people who have been unemployed for a considerable period.

A number of the measures that the Government have introduced can help considerably. For example, the Employment Protection Act has given people the right to longer periods of redundancy notice and organised workers the right to be consulted on matters of redundancy and to join with employers in examining the possibilities of a joint application for TES. Nevertheless, many individuals have found themselves thrown out of work as a result of factors that they only partially understand and over which they have no individual control.

Much is made by the Press of isolated cases of scroungers. It is claimed that there are those who do not really want work. I do not deny that such people exist, but they represent a small minority. There are those who try to represent that this is a major problem. They suggest that it is some sort of characteristic of the people of any of the regions of high unemployment. They do a grave disservice to working people.

For most of the people of this country employment is not only a source of income but a way in which they define their rôle in life. For many it is a tangible expression of their own worth to society. For those reasons, unemployment is one of the most soul-destroying forms of deprivation.

Unemployment falls particularly heavily on school leavers. I admit that that is a special problem in the South-West. There can be nothing more demoralising for school leavers than to be faced with a long period of unemployment. They feel either that adult society does not care about their predicament or that it has not been competent in organising society in a way that enables it to employ their talents and their will to work in the interests of society.

In more normal times when we were not struggling for our economic survival in the most serious post-war depression we have ever known, the number of people unemployed were largely comprised of those moving from one job to another, but now in the South-West nearly 22,000 people have been unemployed for more than one year. That is a tragic waste of human potential. The fact that there are many other countries with high levels of unemployment is no consolation to the unemployed person in the South-West or, for that matter, to those who live anywhere else. However, it gives some indication of the nature of the problem with which we are grappling. The complexity of the problem is such that there are no blanket solutions.

Nowhere is that more true than of the South-West where the problem varies from region to region. Therefore, I am conscious of the extent to which by generalising in talking about the South-West I shall lay myself open to fair criticism that I am not reflecting the special problems of Members representing South-West constituencies.

As the region is an area of outstanding natural beauty, many people seem to regard the South-West as a place of agriculture and tourism. That is not surprising, I suppose, when half the area is designated as national parks because of its outstanding beauty, or when 270 miles of its coastline are designated heritage coast by the Countryside Commission. Agriculture is important to the South West—I would hardly say otherwise with my hon. Friend the Minister of State for Agriculture sitting on the Front Bench beside me—but it provides only 3.3 per cent. of the area's total employment. In spite of any general impressions which might exist to the contrary, the South-West is heavily dependent upon manufacturing industry for employment. Fewer than 5,000 people in the South-West are employed in agriculture compared with 426,000 in manufacturing industry.

Mr. Peter Mills (Devon, West)

Surely the Minister agrees that although the number of people engaged in agriculture is small, the number engaged in food processing and manufacturing and in those concerns which service agriculture is enormous. That must be taken into account.

Mr. Booth

I intend to develop this point because it is important. I do not for one moment deny the hon. Gentleman's point about the connection between agriculture and food processing in other jobs. But of the total number of people employed in the South-West, it is undeniable that there is a far greater dependence on manufacturing industry than on any other activity. Put simply. for every one on the land there are eight on the factory floor. That is about the size of the problem. To make a comparison with tourism, for every one employed in hotels or providing accommodation for tourists there are 10 on the factory floor. The size of the construction industry has to bear some relationship to the demand within the area for a whole series of services as well as the level of manufacturing, but even so 88 per cent. more people are employed in that industry than in agriculture.

Therefore, one must bear in mind the importance of manufacturing in terms of jobs. Let us consider the diversity of manufacturing industry in the region. There are electronics, chemicals, pharmaceuticals, plastics, tyres, other industrial rubber production, railway equipment, building materials, diesel engines, aero-engines, agricultural machinery and marine engineering—

Mr. David Penhaligon (Truro)

One of the points that West Country Members would wish to make is that we regard Bristol as an industrial suburb of Birmingham with nothing whatever to do with West Country problems.

Mr. Booth

The hon. Member bears out the point that I make in two ways. First, there are great differences between one part of the South-West and another. That is common ground between us. However, he also bears me out in my contention that the way in which overall industrial strategy succeeds or fails in this country is of considerable importance to employment in the South-West. If one wants to measure, by the test of the aviation industry, the importance of manufacturing industry, it should be noted that in only three centres—Bristol, Christchurch and Yeovil—that industry provides 40,000 jobs.

That fact must be accepted, but that is not to deny that the region is affected by the economic recession in the service industries as well. I accept that the hotel industry has been adversely affected by the tendency of people to take more camping holidays and more self-servicing holidays. However, manufacturing industry, particularly the newer industries such as electronics, packaging and so on, has been particularly badly affected in the downturn. If Government policy is to be relevant, therefore, to the needs of the South-West it must take account not only of the immediate problems of the recession but of some of the structural problems of the region which were outlined and acknowledged by the hon. Member for Bodmin when he described the situation there.

Let me therefore briefly outline some of the Government's measures to mitigate the worst effects of the immediate recession and to deal with the longer-term structural problems of the South-West. In co-operation with the Manpower Services Commission the Government have introduced a wide range of special schemes designed to ameliorate the worst effects of economic recession. Most of these are well known to hon. Members who have engaged in employment debates. They are the job creation scheme, the work experience programme, the youth employment subsidy scheme, the job release scheme, and the temporary employment subsidy. While a majority of these are short-term counter-cyclical schemes, they have proved especially cost effective in providing and saving jobs.

In the South-West these measures have assisted 19,000 people. I refer only to Department of Employment measures and I take no account of industrial support or training. They have been effective in assisting young people, and I acknowledge that that type of unemployment is a particular problem of the South-West. However, the situation has changed considerably with the introduction of a wide number of measures especially designed to assist young people. Unemployment among school leavers has dropped from 12,000 last August to the present figure of 2,800. Admittedly the number is still far too high, but no one will deny that the drop has been dramatic.

The impact of the temporary employment subsidy in the South-West is considerable, and 11,000 jobs are now sustained in the South-West region by TES. The job creation programme is currently providing 4,500 jobs at a cost of about —4¼ million. One of the things which fascinates me about the job creation scheme is the way in which people of good will and initiative can use that scheme not only to provide jobs but to meet the needs of their own areas. We can benefit by looking at some of the more successful and ambitious projects run under job creation.

It has been important in the current recession to sustain the level of training in the South-West. That is why we have sought to ensure that the training opportunities scheme should be steadily and consistently expanded from over 4,300 who were trained in the South-West in 1965 to 6,300 in 1976, and a further expansion is now taking place. These measures to stimulate training will benefit the South-West in the short term in enabling people to spend time that would otherwise be spent in unemployment in upgrading existing skills or acquiring new skills, thus ensuring that the region has the requisite number of skilled men and women available when the upturn comes.

Perhaps I may now consider the longterm structural problems. There is an absence in the South-West of a tremendous dependence on a single industry, a dependence which one finds in other regions of high unemployment where a recession in steel, shipbuilding or mining has led to massive unemployment. A diminution of employment prospects in some of the older industries has taken place against the background of newer industries coming in and bringing a far greater diversity of manufacturing activity.

I entirely accept what the hon. Member for Bodmin said about the way in which industry has been located in the South-West. The further one goes towards the south-western tip of the peninsula, the sparser becomes the location of industry, the lower the activity rates, the higher the unemployment, the lower the earnings and the harder it is for the married woman to obtain work. Of course, this is a special feature of the problems of the area.

It was in recognition of that special feature that in 1966 the regions of Cornwall and North Devon were designated development areas. In recognising that, we did so knowing that these areas were not like other regions of high unemployment where there is a necessity to locate massive factories providing many jobs. That sort of action is not needed in the South-West. Instead there is a need for small firms to be located there —firms that will take root, and expand in order to meet labour and employment requirements of the area. This was a point that I discussed with Manpower Services Committee of the South-West the last time I was down there.

That is why the advance factory programme of the South-West is particularly significant. Many of these factories are small and they provide the opportunity that is needed. Of the 29 Government advance factories in the area, 15 have been allocated to occupants, seven have been completed and are ready for occupation, and another seven are under construction. I welcome the decision of the Development Commission to set up two more advance factories in the South-West. All this is very helpful.

In addition, regional selective assistance is important and it has resulted in considerable headway being made. A total of £6.2 million of regional assistance has been allocated for 139 projects in the South-West and this has helped to safeguard a further 7,000 jobs, at least until the 1980s. Regional selective assistance is a weapon that can be used effectively against unemployment in the South West.

Mr. Jerry Wiggin (Weston-super-Mare)

Will the Secretary of State tell me how I can answer a shop steward from my constituency whom I met only last week? I am not in a development area. He asked me how his workers who were hard working and maintaining a high level of output could compete with factories just down the road which were receiving Government assistance and which were unable to sustain such a high level of economic output?

Mr. Booth

I do not think that is a hard question to answer. The fact that there are advance factories standing empty in these areas shows that at the depth of the recession there is not a lot of footloose industry around, and there are not a lot of people who are ready to uproot themselves from factories such as those from which the shop steward came to go into other areas. That is a problem of the development areas during a recession. It is harder to draw people into these areas to establish new industries so that when the upturn comes the full benefit of the development areas status can be felt.

It is encouraging, in a rather serious picture, to see the success of the accelerated projects scheme in the South-West. This scheme is offering grants to companies to make an earlier start on investment projects that they have in prospect in order to help the South-West. Assistance totalling £3 million has been offered in respect of 11 projects, which will mean £33 million worth of assistance in the South-West. This will create 1,700 jobs. This is a measure of the extent to which industry, even in places where it is set up in relatively small units, is becoming more and more capital intensive. In those projects under the accelerated projects scheme, the amount of investment per job works out on average at £20,000.

While I understand and sympathise with the efforts of hon. Members from the South-West to press for more to be done to establish industry in the South-West, I think that we should be misleading the House if we said that we see the establishment of this new industry—which we want to see—as offering instantaneously a massive number of jobs.

Because industry is becoming more capital intensive it will be able to expand production more rapidly only if there is an overall increase in productivity and more and more jobs are brought in. We have no choice. We cannot choose as an alternative an antiquated labour-intensive industry, because it could not survive in competition with world markets or with imports from other countries. In knowing what we must aim for, we must have our eyes open to the limits that can be achieved in any situation other than a boom in which the level of manufacturing output increases much faster than productivity.

Mr. John Watkinson (Gloucestershire, West)

I think that my right hon. Friend has developed the very important argument. The logical development of that argument is that if we know primary employment is diminishing and secondary employment is in a situation in which capital investment in it is diminishing, the only area left is tertiary employment—in service industries or in the public sector.

Mr. Booth

Looking at the logical outcome to the argument that I am developing, we must find a way of expanding employment in the services sector. We must have that expansion of output in manufacturing industry in order to create the wealth which is necessary so that it can be diverted by taxation or some other means to create effective services employment. We cannot do it the other way round. By expanding the services activity we shall not increase the amount of manufacturing industry.

The measures I have spoken of tonight, particularly Section 8 schemes under the Industry Act, have brought £3.2 million worth of assistance to projects in the South-West. That has had a considerable effect. In fact, the combined effect is such that there are more jobs in the South-West today than there were in 1971, 1972 or 1973. The mid-year figures, seasonally adjusted on exactly the same boundary areas, show an increase in the number of jobs in the South-West and against the background of a world recession that is a considerable achievement.

The high birth rate of the early 1960s, coupled with the increased proportion of married women seeking work, has led to an increase in unemployment despite the fact that there are more jobs. In terms of job expansion we must run much faster before we solve the problem. Despite all that has been done to diversify the economy of the South-West, there is a long way to go in solving the structural problems of employment.

But the solitary fact that there are more jobs shows that the many measures that have been brought to bear in this area have led to a considerable improvement, and these can be used very effectively in future. We must realise that there are limits to the effects the measures can have. There are limits to the effects of any regional policy in a recession, but there is every reason to believe that, as economic activity picks up, the South-West will recover very quickly.

Mr. Jeremy Thorpe (Devon, North)

The Secretary of State is giving very sympathetic consideration to our case. Would he mention communications? Hitherto Government policy—and this policy has been followed by successive Governments -has been that roads should be built where the density of employment dictates. In the South-West we are in the obverse position. Because of the scarcity of employment, we need roads to open up the opportunities. The Devon and Somerset County Councils and hon. Members from all three parties representing these areas have agreed that the overwhelming priority should be the spur road into North Devon. Can we rely on the Secretary of State's support and influence with his right hon. Friend to keep this as a top priority?

Mr. Booth

I have asked my hon. Friend the Minister of State to deal in more detail with transport matters, with which I have not time to deal now, but I accept that communication is an essential part of the infrastructure in the development of industrial employment

I welcome the fact that communications in the South-West have been and are continuing to be improved. Above all, I look to the future and to the fact that increasingly people desire to place their business and investment in areas that are favoured by the kind of advantages that exist in the South-West. I am not merely talking about the beautiful countryside and the pleasant climate of the South-West, but of the history of good industrial relations that exists in that part of the country. I also have in mind the ability of the people of the South-West to adapt themselves to run a whole range of diversified manufacturing industries and services.

For that reason we have every reason to expect that, once economic activity picks up generally, the South-West will be one of the first areas to benefit.

8.12 p.m.

Mr. Edward du Cann (Taunton)

I join the Secretary of State in paying tribute to my hon. Friend the Member for Bodmin (Mr. Hicks) on obtaining this debate. My hon. Friend made a fine introductory speech. This is a timely debate. I did not realise until a few moments ago that the last occasion when the House discussed this subject was when I initiated a debate many years ago. Therefore, my hon. Friend is right to choose this important subject for debate tonight.

The whole House is grateful for the presence of the Secretary of State for Employment. We know him to be an honourable and sincere man. Nobody would disagree with the sentiments expressed by the right hon. Gentleman or, indeed, with his general comments. We agree that his diagnosis of the situation was accurate. Let the right hon. Gentleman take credit for what has been done. There is no quarrel between us on that score. We are striving for the same ends. We disagree only about the means.

Let me outline the areas in which my hon. Friends and I disagree with the Secretary of State. The right hon. Gentle- man was right to emphasise the significance of small firms in the economy of the South-West and, indeed, in the national economy. But if he feels as strongly as I do about their importance, let me remind him of what has happened to small firms. A number of penalties have been placed upon them and their activities, and they have been totally discouraging to businesses whose only crime apparently is that they have owned and developed businesses in the United Kingdom.

If I speak briefly, the brevity of my remarks can be taken to be in inverse proportion to the intensity of my feelings on this subject. If the position on unemployment is gross in the United Kingdom as a whole, as it is at present, undeniably the situation in the South-West is far graver. Does the Secretary of State appreciate how rapidly the position has deteriorated in recent times?

Let me quote some figures. Between 1970 and 1974 the average figure of unemployment in the South West totalled roughly 40,000. In 1975—these are official Government statistics—the average figure rose to 74,000, in 1976 it rose to 96,000 and in January 1977 it was 105,000. That is a legacy of the Labour Government. During Labour's period of office, unemployment in the South-West has multiplied two and a half times.

This situation has some fearsome aspects. The speech made by my hon. Friend the Member for Bodmin amazed me because of its moderation. It is a matter not only of the concealed amount of unemployment which we all know to exist in our local villages and towns, but of the fact that we all know of areas in which rates of unemployment are as high as 14 per cent.

Mr. Thorpe

In some places the figure is 19 per cent.

Mr. du Cann

The right hon. Member for Devon, North (Mr. Thorpe) instances a figure of 19 per cent., and there are many places where the figure is even higher. In my constituency of Taunton, the total number of unemployed is over 2,000. I exclude West Somerset from that figure but it is still unacceptable, a disgrace and, what is more, unnecessary.

It is a matter of bitter complaint in the South-West that from time to time our problems are made more difficult because of careless Government action. Such factors tend to aggregate. Let me refer to my own county town of Taunton. Some time ago there was a reorganisation of local government boundaries—and I express no party political point, because some of us expressed doubts on that score at the time. Somerset was reduced from the third largest county in the United Kingdom to the third smallest That has meant a substantial contraction of the county's wealth, particularly in the richest part of the county, part of which has gone to form the new county of Avon. Employment in the county town has shrunk, and that is a serious matter. One would have thought that the Government would have said "We shall look upon Taunton as an area with special care", but not a bit of it. What do the Government propose to do about the situation? We have lost our country regiment and are about to lose in the county every vestige of a military presence which has been with us for centuries. It is being done apparently without any thought. It is a logistic absurdity to concentrate the whole of the British Army in one place—namely, Salisbury Plain. It is absurd to take the Army away from local centres of population when over the years the Army has identified itself increasingly with the local civilian population.

The effects on Taunton will he enormous, and I should like to quantify them. There will be redundancies of 250 clerical staff and 233 industrial staff. Because of Government action, at a stroke of the administrative pen, the present total of 2,000 unemployed is likely to be swollen by almost 500. Therefore, the number of unemployed locally may rise by 25 per cent. What consultation was there between Departments, and what discussions took place between the Secretaries of State for Defence and for Employment before decisions were taken? The reality is that Government actions are indivisible. One cannot separate one arm of the Government's activities from another.

I hope that the Secretary of State will ensure that he keeps in close contact with his colleagues in the Government when reaching decisions that affect local employment adversely. I hope he will represent to his colleagues that these cuts should be cancelled. They are bad in themselves and involve immense hidden costs. For example, because of the lack of expenditure by the Army in Taunton the area will be made infinitely poorer. Where is the sense in that course?

It is right to emphasise that we have special problems in the South-West. We are not a rich area and we have problems of geography. We in the rural areas need special help. Does the Secretary of State realise how bitterly the new governmental policy involving priorities for the urban areas is resented in rural areas? If it is continued and pressed, if more emphasis goes into that policy—and one knows the difficulties and is not unsympathetic to large urban areas such as Liverpool, Manchester and London—and it is pursued to its ultimate, the countryside of England will become a new slum. We strongly object to that and we object to the apparent casualness of the Government to that possibility. Places such as West Somerset, Dulverton and Exmoor already feel that the future is bleak enough. There is no work for school leavers there and the need to move out is compulsory if worthwhile careers are to be pursued by young people.

I acknowledge with gratitude the work that has been done by the Development Commission and COSIRA, with which hon. Members will be familiar. I must ask the Secretary of State whether he will give consideration to the proposal that West Somerset should now have assisted area status. I emphasise the point for this reason. In future it is likely that towns such as Plymouth and Bridgwater will become comparatively prosperous cities while the countryside will continue to decline. We must arrest that trend.

It has been the habit of hon. Members who have the honour to represent West Country constituencies to press continualy the need for good communications. It is as a result of earlier debates and the pressure applied by my hon. Friends and myself that we have had the building of the M5, the improvement of the A38 as far as Plymouth, the construction of local bypasses and so on. How warmly I echo the remarks made in an intervention by the right hon. Member for Devon, North, who said how urgent it was that we should build the North Devon spur. I am pleased that the right hon. Member, my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) and I are making common cause in that regard. Equally important is the need for bypasses for some of our smaller West Country villages.

Listening to the catalogue of minor changes that the Government have made, it seemed to me that all those changes in the aggregate are by no means worth as much as would be an announcement by the Government that in the South-West they would henceforward embark on a great public works programme—as Keynes suggested—to build roads and hospitals. My hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) urgently needs a hospital in his constituency, as I do in mine. It was promised 40 years ago and even now is not within sight. Surely the establishment of works of permanent value that would be of particular help to the construction industry—to which reference has already been made and which is in a serious position in the South-West—would be better than any temporary measures of job creation. If anyone complains that I am advocating further Government expenditure, I say that it is necessary for us to re-examine our priorities in Government expenditure. Let me give one example to the Secretary of State that is particularly relevant to his Department. It is an example with which a number of hon. Gentlemen will be familiar.

During the last Session, the Public Accounts Committee examined the Manpower Services Agency. I do not know whether the House recalls our report, but the expense of the Agency in putting 1,000 jobcentres in the High Streets of the United Kingdom has risen from £100 million three years ago to £424 million in the current year. Is such expenditure really necessary? Everybody knew where the old employment centres were—in the back streets. Such centres do not have to be in High Streets. Could we not use that money on the North Devon spur, the Wiveliscombe bypass, the Weston-super-Mare and Taunton hospitals and the like? Would not the money be better spent in that way?

Mr. John Nott (St. Ives)

We have a borrowing requirement of £11 billion at the moment, and my right hon. Friend should pay some attention to public expenditure in making his points. I have never interrupted him in such an abrupt and rude way before, but he must justify his comments on increased public works.

Mr. du Cann

If my hon. Friend the Member for St. Ives (Mr. Nott) would like me to list the items of public expenditure that could be cut out altogether I shall do so, but not on this occasion. But when we are spending huge amounts of money let us spend it in the wisest and most productive ways. Otherwise the money is a total waste.

Mr. Ron Thomas (Bristol, North-West)

Does the right hon. Gentleman consider the proliferation of private employment agencies throughout major cities—all of them in High Streets—to be a waste of money?

Mr. du Cann

Those are not paid for by public money—vast amounts of it at that.

Another reflection that I had while listening to the Secretary of State's speech was that he was underrating agriculture. Fifty thousand people are employed in that industry. I hope that the Secretary of State and his right hon. Friends, when they are in Brussels making the point that when unemployment is as high as it is throughout Europe people cannot afford to spend large amounts of money on food —all of which is true, accurate and reasonable—will add that, none the less, farmers in the South-West, who are at subsistence level, cannot afford not to receive proper returns on their labour and investment. I hope that we shall see a generous price review.

As the Opposition spokesman and the Secretary of State have both said, and as we all know, there are all the skills and talents in the South-West. There is the necessary environment. It is a dreadful thing that unemployment in our part of the world has grown so much faster than in other regions. I hope that the Secretary of State's presence here tonight indicates that the practical suggestions that we have made in the debate will be acted on and that our region will become far from what we feel it is now—the forgotten region.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

It might be helpful to the House if I mention that the debate will stop at 10 o'clock and that there will be two winding-up speeches, but I have a list of 17 hon. Members who would like to catch my eye. My mathematics do not, unfortunately, supply me with the answer, but perhaps the House will give me such assistance as it can.

8.29 p.m.

Mr. Arthur Palmer (Bristol, North-East)

I shall pay attention to the Chair's request and I shall be as short as I can. I agree with much of what was said by the right hon. Member for Taunton (Mr. du Cann). He shocked his hon. Friend the Member for St. Ives (Mr. Nott), but that does not mean that he was wrong—it probably means that he was right.

But I could not agree with much of what the right hon. Gentleman said at the beginning of his speech when he was so worried and troubled about what had happened to Taunton, the county town of Somerset, as a result of local government reorganisation. I hope that he does not blame the Labour Party for that, because we in Bristol now live under the domination of Avon County, which was inflicted upon us and which I hope we shall end as soon as possible.

Mr. Wiggin

The Labour Party refused to vote against the Third Reading of the Local Government Bill. Had it done so it might have received some strange support.

Mr. Palmer

If the hon. Member for Weston-super-Mare (Mr. Wiggin) wishes to join us now in getting rid of Avon, I am sure that we shall be delighted.

There is a great temptation for hon. Members from Bristol constituencies tonight to speak on Bristol's problems—the aviation industry, the need to maintain defence contracts and so on. But I shall not succumb to that temptation and shall concentrate on the broad subject of the debate.

The hon. Member for Truro (Mr. Penhaligon) talked disparagingly about the interest of Bristol Members in the debate. I do not know whether he thinks that Cabot sailed from Southend or that the "Great Britain" was built in Sheffield, but Bristol has every claim to be regarded as a great city of the South-West, historically and in fact. We all of us in Bristol know the South-West pretty well; indeed, I was born in North Devon.

One rather surprising fact emerges from a study of the unemployment figures in the South-West. Of the seven counties in the region, only three have unemployment rates above the national average—though I am not, of course, saying that the present average is anything to be proud of. Gloucestershire, Somerset and Wiltshire have unemployment rates which are rather below the national average. The two worst hit counties by unemployment are Devon and Cornwall, and this is obviously because so many people there are employed in the seasonal tourist trade.

Where there is a fair balance and mix of employment in, for example, the holiday trade, agriculture, light industry and food processing, reasonable levels of employment can be maintained in good times and bad. Somerset, Avon, Wiltshire and Gloucestershire have much of that balanced mix of industry. The rest of the area, particularly the far West, is not so fortunate. In those areas there is always a social conflict which centres around the representation on local authorities, few, if any of which are Labour controlled. There are those who wish to maintain the areas as isolated rural backwaters or, at best, seaside playgrounds and those who see the constant need for a greater injection of industry.

The election addresses of Labour candidates in the local council elections in the West Country always stress the need for greater industrial development. That is a continuing theme of the propaganda of the Labour Party in the far West and it is a great pity that more of our candidates are not elected-but there is still time.

It is unfair nonsense for the Conservative Party to pretend that high unemployment in the South-West is caused by the fact that we have a Labour Government here. I was taken by the figures of the right hon. Member for Taunton, but I have a fact to quote to him. During the short-lived expansionist boom time of the last Conservative Government the percentage unemployment in To[...]bay still reached double figures in the winter. This problem of structural unemployment is not dependent upon the colour of the Government at Westminster.

Mr. Alan Clark (Plymouth, Sutton)

On a point of order, Mr. Deputy Speaker. With no disrespect to yourself or to the hon. Member for Bristol, North-East (Mr. Palmer), do you consider it to be in order for the House to have to listen to generalised ramblings ranging many hundreds of miles from the hon. Gentleman's constituency when you have appealed to us for brevity on this subject?

Mr. Deputy Speaker

We are being brief on the motion for the Adjournment. I have little power to do what the hon. Gentleman suggests.

Mr. Palmer

The subject of the debate is unemployment in the South-West and I am fully in order to talk about that and the general economic problems of the South-West. Perhaps the hon. Member for Plymouth, Sutton (Mr. Clark) will have an opportunity to speak later if he takes up less time intervening.

I wish to refer to the part theme of the hon. Member who opened for the Opposition: the difficulties of the construction industry in the South-West. It has been particularly hard hit by the recession. I raised the matter on the Adjournment of the House last year. More recently, on last Friday evening, I was disunited on a platform with the hon. Member for Gloucestershire, South (Mr. Cope) and we spoke to representatives of the same industry. Building and construction employees are experiencing more than their fair share of unemployment. The industry has gone into reverse since the peak of property speculation building four or five years ago. Every section is affected—labourers, skilled men. large and small employers, architects and planners.

The trade union view is clear. Trade unions want more public expenditure to stimulate building employment. They are well aware that national and local government are probably the largest single customers of their industry and they believe that that is where expansion should take place in a time of depression. The difficulty is that the employers are caught in a dilemma. On the one hand they want public spending economies but on the other hand they want more orders for their firms.

In that respect I agree with the right hon. Member for Taunton. This is a time for expenditure on productive capital works for the future. If there is a falling back in immediate private consumption, that is all the more reason why we should take advantage of the opportunity to expand our stock of long-term productive equipment.

My list would include new housing schemes and schools, especially those concerned with technical and technological training. We need better provision for new interconnected waterworks of all kinds, particularly in the South-West as it went through a difficult time during the summer drought. Roads have already been referred to. I also suggest that we look seriously at the electrification of the railway system all the way from London to Exeter. We should initiate a feasibility study into the possibilities of construct- ing the Severn Barrage. That is a matter on which the Select Committee on Science and Technology will soon report. There are no real technical problems about the Barrage. Only the will is needed to begin.

The hon. Member for Bodmin (Mr. Hicks) was strong on destructive points but weak on constructive points. I hope that my suggestions have been more helpful.

8.38 p.m.

Mr. Robert Cooke (Bristol, West)

I shall draw the attention of the House to more practical matters than the academic problems to which the hon. Member for Bristol, North-East (Mr. Palmer) referred.

In April 1976 we had a conference on economic development which was called by the Labour Party. It was organised under the Lord Mayor of Bristol and was carefully stage-managed. I made the point that we must do something to help small enterprises to set up in business. Even the Imperial Tobacco Company began as a small family affair, mainly in Bristol. Small enterprises are often prevented from beginning business by the lack of premises, yet the city of Bristol owns countless empty properties, including all the buildings in dockland, which amounts to a vast corporate estate. These properties could be made available to those who want to start up with two or three or 10 or 20 employees. This would have an immediate impact on the problem. Cumbersome Government intervention, conferences and all the rest do no immediate good. The immediate impact could be felt now, if the city of Bristol would address itself to this problem.

What did the Labour city fathers do? They eventually set up an economic development board in June 1976. It took them until 1st February this year to get hold of an industrial development officer. I rang him up today. I got through to him fairly quickly and he was out working this morning. He is an extremely live wire who comes from Leeds. He admits that he does not know much about our part of the country. However, he has inherited only eight potential clients from outside the city who might be interested if the city can help them. But no consideration has been given so far to the small beginner about whom I was talking, though I am delighted that there is at last to be a meeting to consider the subject.

For heaven's sake, let the city fathers get on with this. We have lost a year quite needlessly. We have the powerful influence of Labour Members for Bristol constituencies, sitting here in their serried ranks—except the right hon. Member for Bristol, South-East (Mr. Benn), the most powerful of all. I hope that he will be able to get something done. This is not a matter on which we can tolerate another moment's further delay.

8.41 p.m.

Mr. Ron Thomas (Bristol, North-West)

It never ceases to amaze me that in any debates in this House on unemployment we hear the blatant hypocrisy of Conservative Members. It is the Conservative Party that has demanded more and more public expenditure cuts, creating more and more unemployment, and has been demanding the use of unemployment as an economic regulator. However, when it suits the area of a particular group of Conservative Members, they talk about increasing public expenditure. That hypocrisy cannot be found more clearly than in some of the areas of the South-West.

Let us first take up the question of industrial development in the South-West. It is my considered judgment that Tory councils, acting almost like little Mafias, have done all that they possibly can to prevent any industrialisation and extension of job opportunities in the South-West. They are there primarily to represent hoteliers and similar interests, and that is what they do. [HON. MEMBERS: "Rubbish."] One can see case after case in which they have done all that they can to stop any kind of industrial development.

They create a situation in which seasonal workers are employed for about five or six months of the year and are then thrown on to unemployment benefit or social security payments. We hear nothing about that.

I should welcome the Secretary of State examining the costs, in public expenditure terms, of unemployment benefit and social security payments to keep the hotels of the South-West of Britain in the way in which they are kept, and an inquiry into the low wages that they pay.

My right hon. Friend talked about good industrial relations in the South-West. I want to tell him why industrial relations in Devon and Cornwall are good. It is because there is one form of employment—the hotel industry. [HON. MEMBERS: "Rubbish".] Workers are trapped within that form of employment. In great stretches of the South-West the only employment is in the tourist industry.

Miss Janet Fookes (Plymouth, Drake)

Will the hon. Gentleman give way?

Mr. Thomas

I remind my right hon. Friend of the famous dispute at Fine Tubes. That will go down in trade union history. I should like him to look at some of the rates of pay offered in the South-West. Last year an employer in the South-West with a five-star hotel had the gall to go on television and ask for workers at 50p an hour. Some employers in that area were paying even less. At the same time, the Tory Mafia in control of Tory councils in the South-West, when offered every kind of inducement by the Labour Government, refused to build more houses. If some of them had done what the Labour council of Bristol did, there would certainly have been far more work in the construction industry.

But what hypocrisy it is to talk about the problems of the construction industry when there are a number of Conserative Members present who attended a meeting in this House with representatives of both employers and trade unions from the construction industry in the South-West, and one of the things that came out of that meeting was the fact that Tory councils in the South-West were not taking advantage of all the opportunities being offered to them, whether in housing or in other works of construction, which would have had quite a considerable impact on the unemployment in the construction industry.

I turn now to the situation in Bristol. Over the years, Bristol has had a more or less balanced economy and therefore was not affected by the ravages of the inter-war period, but in recent years the position has altered considerably. There is now a growing concern about imbalance in the economy in Bristol and about the loss of manufacturing jobs in the city. It is true that as an economy advances there are fewer people employed in manufacturing industry and more in service industries, but I suggest that the change in Bristol has been much more acute and has been accelerating faster than elsewhere. In 1961, 40 per cent. of the population of Greater Bristol worked in manufacturing industry, but by 1973 this figure had dropped to 31 per cent., and the decline has continued. This is a faster decline than has taken place in the rest of the United Kingdom.

The loss in manufacturing jobs has not been offset by an increase in opportunities in other sectors. There are no longer opportunities open to school leavers, and the variety of potential skills coming on to the labour market is no longer matched by job opportunities. There are long-term dangers in employment being more and more dependent on the service industries and commerce. The massive new blocks occupied by insurance and banking firms can be supported only by a sound manufacturing, wealth-creating base.

In the light of these problems, resulting from the changing balance in the Bristol economy, I appeal to my right hon. Friends the Secretaries of State for Employment, Trade and Industry, and others, to look at the whole philosophy which underlies the Government's attitude towards industrial development certificates and the granting of financial incentives of all kinds to industry. I think that the Government's present attitude is based more on the Bristol of the past, which had a balanced economy. I wholeheartedly support the concept of national planning of industrial resources, but there is a case for considering what the Government can do to meet the changed circumstances.

It is all very well for the hon. Member for Bristol, West (Mr. Cooke) to make fun of what the Labour council in Bristol has done, but it was a considerable step forward to set up an economic development conference which later went on to establish an economic development board. It is a great pity that some of the Tory local authorities in the South-West did not take similar action.

In terms of employment, my right hon. Friend will know that the aerospace industry is very important to my constituency and that of my hon. Friend the Member for Bristol, North-East (Mr. Palmer). In fact, the Bristol area has the largest concentration of employment in the aerospace industry in the whole of Britain. The skills and talents of those workers continue to push forward the frontiers of technological advance. The aerospace industry is exactly the kind of industry in which we should be pushing forward, because of its high, value-added export performance, technological spin-off and so forth.

I say to Conservative Members and to that unelected group along the Corridor that there will be considerable anger among Bristol aircraft workers when they hear of today's hybridity decision of the House of Lords. The Tories and their poodles along the Corridor are frustrating and thwarting—or have attempted to frustrate—the will of this elected Chamber, and they have already put the jobs of tens of thousands of workers in jeopardy.

Mr. John Cope (Gloucestershire, South)

Is the hon. Gentleman suggesting that the Officers of this House and the House of Lords are the poodles of the Tory Party?

Mr. Thomas

The question of hybridity would not be being discussed at the moment if the Bill had not been held up by that unelected crowd along the Corridor. It would have been an Act of Parliament by now. This House decided that it was not a Hybrid Bill.

Mr. Robin Maxwell-Hyslop (Tiverton)

It did not.

Mr. Deputy Speaker

Order. The matter which the hon. Member for Bristol, North-West (Mr. Thomas) is entering into is not related directly to the subject of unemployment in the South-West, and I ask him to return to that subject.

Mr. Maxwell-Hyslop

On a point of order, Mr. Deputy Speaker. The hon. Gentleman is attributing to Mr. Speaker the exact opposite of what Mr. Speaker said. The House of Commons has never decided that the Aircraft and Shipbuilding Industries Bill was not hybrid. The House, by a majority—

Mr. Deputy Speaker

Order. This is not relevant to the subject of the debate, and, indeed, the Minister has no responsibility for it either. Can we now return to matters within the Minister's responsibility?

Mr. Thomas

Unemployment in the South-West cannot be divorced from the present economic situation and the intolerable level of unemployment throughout the country. Many of us on these Benches do not accept that the Government's policy, almost of laissez-faire and of a non-interventionist approach to the economy, can even begin to solve the intolerable level of unemployment.

Attention has been drawn, rightly, to the fact that about 16 million workers are unemployed in OECD countries. This is a crisis of capitalism, not of Socialism. I hope that any hon. Member opposite who follows me will give examples of Socialist policies which the Government have used to deal with unemployment—I say that in all sincerity. But in my judgment the Government are not adopting the kinds of policy set out in our election manifesto and by the TUC—Socialist policies based on planning our economy and industrial resources. Until they do that we shall not even begin to deal with the intolerable level of unemployment.

8.53 p.m.

Mr. David Penhaligon (Truro)

I apologise for upsetting Bristol Members by suggesting that Bristol was part of the Birmingham industrial complex, but having listened to the hon. Member for Bristol, North-West (Mr. Thomas) I think that the West Country would welcome Barrow-in-Furness in its midst as opposed to his views. I must tell the Secretary of State that, through my end of the telescope, the level of unemployment and our difficulties in the South-West are somewhat worse than his speech conveyed, although I am not claiming that he tried to cover up the basic points.

Unemployment in Cornwall is over 12 per cent. In places like Helston, St. Ives, Wadebridge and Ilfracombe the level, if not at 20 per cent., is as near to it as not to matter. In some parts of the South-West, and in the development area of Devon and Cornwall, unemployment is not temporary but endemic, and it worries me greatly.

It is a frightening experience as a Member of Parliament to go to a school and talk to 15- and l6-year-olds and hear them ask "What do I do when I leave school?" As a Cornishman, it gives me no pleasure to have to tell young Cornish people once again that if they want a career with scope they have to go to England.

Government action has been taken, but I still do not understand the logic of scrapping the regional employment premium. The Government say that they want a transfer of resources into industrial production, which I applaud—we should have started on that trail some years ago. But to say that in one Budget and then, in the next, scrap the encouragement that had been given to industrial development in the far South-West is difficult for me to swallow.

My constituency is rather industrial. The China Clay Company in my constituency is probably as industrially profitable and successful as any other company in the United Kingdom. If we had a few dozen more such companies, I suspect that we would not now be discussing unemployment.

The Government have also scrapped investment incentives to the mining industry. One of the few good things which has happened in the South-West over the past few months or years has been the revival of the tin industry. We like the tin industry because, no matter what Government we have in London, at the end of the day the tin industry cannot be taken away. Once a hole has been dug, it remains there 600 ft. or 700 ft. deep, and there is a great incentive to carry on through good and bad days. To take away investment incentive from that industry is a tragic mistake. It is an industry which once again has started to grow and could have made a useful contribution in the far South-West.

The Liberal Party has long argued that the national insurance stamp should be varied regionally. It could be used to encourage a transfer of employment opportunities to less privileged areas of the country. An extra 2 per cent. did not help at all in that direction. Whether or not the Government take the view that their attitude to small business in the West Country is justified, it is the fact that many small businesses are not expanding because people believe that what has already happened to the economy is a foretaste of more to come. There has been a great deal of pulling in of horns.

I turn now to the question of farming. I am glad that the Minister was here for the discussion on farming. I can understand why the green pound has not been revalued. It has not had the effect of bankrupting farmers, but farmers throughout the South-West are reducing production and output. That, by definition, means a reduction of employment.

I shall not enter into a debate about the importance of agriculture for the United Kingdom's balance of payments. I can see the Government's dilemma, and I am not particularly critical of their action. They had to make some arrangements such as those that were announced today.

On the other hand, I should not criticise the Government for not building advance factories. It is a great embarrassment, as I drive from my home on the other side of Truro, to see the advance factories. The Minister boasts about building more of them. I am not against encouraging that process. If we are to waste money, let us waste it in the West Country. The argument for more advance factories in my area is not strong. But we could enter into communication with Cornwall County Council, which has spent the miserably pathetic sum of —3,500 a year on a world advertising campaign to exploit the facilities already available in Cornwall. That is an appalling condemnation of the council.

Mr. David Mudd (Falmouth and Camborne)

I think that fundamentally the hon. Gentleman is missing the main point of Cornwall's problems. Traditionally, firms which have no connection with the county have constantly been drawn for the purpose of bounty hunting. Surely the attitudes towards industrial development in Cornwall should be directed solely to the expansion of industries which will use our traditional skills and aptitudes and which are associated with our industrial traditions.

Mr. Penhaligon

I have a great deal of sympathy with that proposition. As one Cornishman to another, I think that we know our own patch, although we might disagree about detail on occasion.

My hon. Friend the Member for Cornwall, North (Mr. Pardoe), who apologises for not being here—an untimely death in the family has meant that he has to attend the funeral today in Bridgwater—recently asked the Minister what was the level of male unemployment in the South-West. The figures are even more horrifying than the overall figures generally quoted. Male unemployment in Cornwall is 15.4 per cent. My hon. Friend also wanted the male unemployment figures in Cornwall expressed as a percentage of the United Kingdom average.

Mr. Ron Thomas

Will the hon. Gentleman tell us what were the figures in Cornwall in the middle of the summer rather than in the winter?

Mr. Penhaligon

I see no logical reason for doing that. I shall give the figures for January 1950. That is a long time ago. I take them from that date because I have no wish to get involved in a party political narrow battle. This issue is more important than that.

Unemployment in Cornwall, expressed as a percentage of the United Kingdom average, was 48 per cent. in 1950. In 1977, after all the effort which has gone into development in the South-West, it was precisely 48 per cent. It is tempting to dismiss the Government's regional development policies as a complete failure, but that would be a mistake.

As the hon. Member for Falmouth and Camborne (Mr. Mudd) implied, we have a satellite economy in our area. Any new industry going to the area is by definition a high risk industry. However, I maintain that Cornwall has been better off because of it. Some of the industry is sticking through these hard times, and that I welcome.

The trouble is that we apparently do not recognise the basic dilemma in the far South-West—a steadily increasing population. We have more jobs now than we had 15 or 20 years ago, but the one attitude appears to be "If I am to be unemployed, I might as well be unemployed in Cornwall as in Birmingham." I can understand that attitude. I take the view that to a certain extent we shall not bring down unemployment in Cornwall and Devon, including North Devon, to the level of the rest of the United Kingdom without population control. That means limiting the freedom of people to move to various areas, and that is a solution for which I would not vote. However, if we recognise that that is the problem, we can start to deal with it.

One problem is that we in the West Country call the gradual centralisation of brain and the decentralisation of brawn. For example, I understand that in the not too distant future letters for delivery in Cornwall will be sorted at Plymouth. That will take many jobs out of Cornwall. There was employment in Cornwall in processing vehicle licensing, but all those jobs have now gone to Swansea. I now have to write to East Kilbride—I shall find out where it is one day—about my constituents' tax problems. Regional health is now administered from Bristol.

I had an interesting conversation with a water board official recently. When I asked him for comparisons of the numbers employed, he pointed out that until amalgamation, which was about the most awful thing that ever happened in the West Country—I shall save that for when I get home—there were 85 boards and they all employed people in their own patches. They went to local solicitors because they did not employ any. They also went to local plumbers, and so on. Those jobs have now been taken from Cornwall.

Teacher training is also to be centralised out of Cornwall. This trend towards centralisation continues, but it is rarely recognised in this place. I hope and pray that the Government will do something to stop it.

Mr. Dennis Skinner (Bolsover)

The hon. Gentleman voted for the Common Market.

Mr. Penhaligon

I certainly did. I sometimes think that Cornwall and the South-West have an economic future which might have more to do with Brittany than with other parts of the United Kingdom. However, that is a subject for another occasion.

I warn the Government that if the full blast of technology in fishing is let loose, the mackerel fishing industry in Cornwall as we know it will cease to exist. Instead of employing the 1,000 people who are now involved in mackerel fishing in Cornwall, before many years are out we shall see six or eight purse seiners employing 50 people whilst the other 950 are on the dole.

There are six things that I want the Government to do.

Mr. Skinner


Mr. Penhaligon

Yes, six. I have been criticised for having no ideas. I am about to suggest six. I should like to see a substantial encouragement of locally-based export co-operatives. At substantial effort, I have tried in the South-West to make a serious investigation of the idea of exporting the high-quality pottery made in the area. They are mainly little companies—what I would call "one man and a dog" companies—but that is in a strange way the appeal of the product. Individually, however, they cannot take on the EEC.

A typical comment in Cornwall is that attention must be paid to taxation on low pay. Only last weekend I was visited by a constituent who earns £30.75, of which the Government consider that he should pay £3.50 in tax. It is time that the Government considered subsidising jobs rather than unemployment. It would be interesting to try saying to the farmers in the South-West "If we give you a subsidy, will you take on extra people?" There is no doubt that they could increase their productivity.

The right hon. Member for Taunton (Mr. du Cann) said that labour-intensive schemes should be investigated. I agree. By that I mean dropping the normal financial criterion of the cheapest quotation for the job and considering instead the number of people employed in doing it. I also want a general halt to centralisation, and I would prefer regional national insurance contributions.

There is an air of despair in the South-West. The feeling is that London does not care. That breeds the worst form of nationalism. No one should laugh at nationalism in Cornwall. It is a possibility. Already people are talking about setting up armies of greenshirts to march the streets and cause trouble. That is the sort of risk we take if we cannot be more successful—in solving the unemployment problems of the far South-West.

9.7 p.m.

Mr. Peter Mills (Devon, West)

I wonder whether, Mr. Deputy Speaker, when I have had my five minutes, you would shout "Order", and then I shall sit down.

I am grateful for the opportunity afforded by this debate. My constituency naturally suffers, like all the other constituencies in the South-West. We sometimes say that when the country catches a cold, we in the South-West have a terrible fever. That is certainly true about unemployment. The situation is very sad and unfortunate. Many people are suffering, and we are not exaggerating.

One thing we are experiencing is the drift away of our better and more intelligent young fellows who are looking for technical jobs. Another effect is the cost of getting to work. If one lives 12 or 15 miles from one of the small towns where there is a little work, the cost of travelling sometimes makes a job uneconomic. The social security benefits are nearly the same as the wage offered. Because we have few buses, travel is very expensive.

I have two suggestions for what the Government could do without spending a great deal of money. First, we need a little more flexibility in the boundary lines of development areas. In some places the line could go into the development area and in others it needs to come out. For example, in Winkleigh, one side of the road is in a development area and the other side, where there is an old airfield, is not. Someone wants to set up a new factory there. His Press advertisement attracted 200 replies seeking jobs in that remote area. However, the firm cannot get a grant because it is 200 yards from this wonderful development line.

Secondly, we must also consider agriculture. The Minister is quite wrong. Agriculture plays an enormous part in the South-West because of all the businesses which serve agriculture. We have agricultural engineers and industries concerned with transport and haulage as well as food processors, such as Unigate and Express Dairies. This is something the Government can do without spending a lot of money.

Because our food production is dropping, we are relying more and more on imported food. But where we have an area like the South-West, which can produce this food, we should give it a little encouragement. As well as the farmers and the consumers, all those who process food in the South-West would benefit. That is something we can do without spending a lot of money.

Mr. Maxwell-Hyslop

Will my hon. Friend remind the House that because of the slashing of £5 million off the Government contribution to the county council our road system will fall into disrepair and that will make it very difficult for many of the remotest farmers to remain in business?

Mr. Mills

That is so. I am certain that the Minister will remember what my hon. Friend has said. That is an important point which the Government should take into account.

Lastly, we in the South-West depend on small businesses. These people need to be encouraged. The Government have not helped by creating an economic climate in which they can flourish. Again that is something they can do.

My time is up but I hope that the Government will try to do the things that they can do without spending a lot of money.

9.12 p.m.

Mr. Terry Walker (Kingswood)

I pay tribute to the hon. Member for Bodmin (Mr. Hicks) for the way in which he opened the debate. He drew attention to the very grave problems in his constituency. There are certainly very great problems in the far South-West. The hon. Gentleman also drew attention to the fact that this is the first debate we have had on the South-West since 1968. That is a disgrace.

From talking to trade unionists from the far South-West there is no doubt that some local authorities in Cornwall and Devon are very much influenced by tourists interests. My hon. Friend the Member for Bristol, North-West (Mr. Thomas) mentioned that. In his reply perhaps the Minister will comment on this, because in the past these local authorities have been concerned about keeping industry away from tourist areas. They have always argued the case on the grounds of preservation of the environment. There is also some anxiety that industry would create a different approach to remuneration. That would inevitably happen to the tourist industry. There are also indications that people in some parts of Cornwall are likely to react strongly against the arrival of Celtic oil men, because if that happens, it is felt, it will create an entirely new situation on the Cornish scene.

When local interests in the region talk about what ought to be done to bring jobs to the South-West they sometimes cannot understand the resentment about industry coming into the area. That is something which needs to be explained. They cannot understand why in the past planning permission has been refused.

The hon. Member for Devon, West (Mr. Mills) talked about agricultural land. But what is needed in the region is jobs. That has been a problem in the past and it has yet to be overcome. Last Friday I met the local CBI group in my constituency. It was certainly concerned about the situation in the area, because we are made up of very small businesses many of which are involved in light engineering. Many of them rely for 30 per cent. of their business on aircraft work.

We see what is happening today to the aircraft industry in the Bristol area. It is of concern to us that, as work on the Concorde dries up, many small businesses in my constituency will be affected by the reduction in work which at the moment keeps their heads above water. If places like the British Aircraft Corporation factory at Filton were put in jeopardy, quite a number of small business in my constituency, which rely on work from it, would be hurt seriously.

In the past, efforts have been made to ease our reliance on the aircraft industry. We are perhaps far too reliant on it. I remember well the Severnside Study which hoped to bring into the South-West other industries and so reduce our reliance on aircraft. However, all that we got was a few warehouses on Severnside employing too few people. Very little heavy industry resulted from the study. This subject needs to be looked at again. If we see any retraction in the aircraft industry, or even the possibility of its going out of the area altogether, we must have something on which to fall back, and the efforts of the Government must be attuned to that end.

In my constituency we used to have a strong footwear industry. Some 20 years ago we had about 10 factories producing boots and shoes. Today, due to the problems of the footwear industry, we have only one factory employing 800 workers. All the rest have gone to the wall. The hon. Member for Wells (Mr. Boscawen) has raised this matter in the House on a number of occasions when we have had debates about footwear. If we are to survive and keep old crafts and skills available, attention must be given to problems of this kind.

Industrial estates and small businesses have to be encouraged in the South-West. But, if assistance is given to the South-West, it must come in the provision of jobs. A stable basis of employment for people living in the area must be of the highest importance.

Everyone in the South-West is gravely concerned, and the speeches which have been made by hon. Members in all parts of the House draw attention to the serious problems we have in the South-West. Too little attention has been paid to the problems of a vast region in which, for example, the distance from my constituency to Bodmin is further than the journey from Bristol to. London. I hope that the Government will give their attention to the grave problems of the region.

9.18 p.m.

Miss Janet Fookes (Plymouth, Drake)

I intervene only briefly because I know that a number of other hon. Members wish to speak. But, if nothing else, I must refute what I thought were the disgraceful remarks of the hon. Member for Bristol, North-West (Mr. Thomas) who made a sweeping generalisation to the effect that the powers that be in the West Country have tried deliberately to prevent industry from coming into the region.

This is a grave slur on the city of Plymouth, which set out as a matter of policy to diversify job opportunities after the war. Its present industrial base is proof of this. If we consider how important and large the city of Plymouth is in the West Country, it becomes clear that any generalisation which leaves it out of account is entirely wrong. I hope that the hon. Gentleman will apologise for misleading the House.

The encouragement of small businesses and firms, which has already been mentioned, is especially important in the West Country. The Government did them untold damage when they altered the rate of VAT. The increase to the so-called luxury rate of 25 per cent. did no help to boat building, which is important in the West Country. It did no help to the consumer electrical goods sector, which is also important in the area. It is true that the Government saw the red light and reduced the rate to 12½ per cent., but I suggest that they improve the situation further by considering the reduction of VAT so that there is one uniform rate. I suggest that that would give a little boost.

The very small firms might be assisted if the exemption rate for VAT were increased. Inflation justifies giving a small boost to raise exemption to £10,000 or even £15,000. That might give a little encouragement without the Government spending enormous sums.

The other anxiety that we have in the West Country springs from defence, which is especially important in Plymouth. We are always anxious when the Government seek to reduce expenditure. That is because we see an immediate reduction in jobs and job opportunities. I trust that job implications will be considered. The previous Secretary of State for Defence recognised this aspect and said so. I am not sure that the present Secretary of State has taken the matter on board. 1 hope that it will be forcibly rubbed into him.

I feel that I should not say any more save that I hope that the points I have made will be taken into consideration by the Minister.

9.23 p.m.

Mr. John Watkinson (Gloucestershire, West)

In the context of this debate it is important that we remember that the problems of the South-West are not unique. There are special problems relating to the South-West, but there is also a national problem.

In his thoughtful speech I think that my right hon. Friend the Secretary of State indicated that there are facets to the problem of unemployment that go deeper than a temporary recession. Although I do not have time to develop the argument now, we in this country and those in the rest of the West must be thinking seriously about the problem of overtime and the control of overtime—in other words, work sharing.

Another subject that we must view with a much greater intensity is the whole question of early retirement. Do not we all agree that it is much better that young people should be in work rather than persons over the age of 60? It is important that our debate be placed in a wider context.

I agree with those who have spoken about the problems of agriculture. I represent an agricultural constituency. Through telephone conversations today I am aware that farmers in my area attach great importance, as do the Government, to changes in the way in which farmers pay their taxes, which would help to safeguard the prosperity of farming interests. It is also vital to try to keep down the interest rate structure. One of the few things on which I agree with the Opposition Members is that interest rates are now too high and could come down. A reduction would be of benefit not only to the farmers in our area but to small businesses and businesses generally.

I agree strongly with what the right hon. Member for Devon, North (Mr. Thorpe) said about the problem in the South-West still being that of access.

Mr. Maxwell-Hyslop rose

Mr. Watkinson

No, I will not give way. I was referring to the former Leader of the Liberal Party. Even though my constituency is bordered by two motorways, there is still difficulty in getting into the area. The access roads and the roads over the River Wye are so narrow that lorries are unable to get in. Firms are being put off coming into my constituency because of the transport difficulties.

I wish to make a passing reference to the textile industry, which is active in my area. The Minister dealt with this problem at length when he spoke in the debate on the North-West. One of the principal employers in the Gloucester area is ICI at Brockworth, and it is under tremendous pressure because of the problems with textiles.

Tourism is an important element in the economy in my constituency. I cannot say that it yields enormous revenues, but it is important both in my area and in the South-West generally. I note from the report prepared by the South-West planning organisation that the support we get from the English Tourist Board is not nearly as great as that given to Scotland and Wales, yet the area devoted to tourism in our region is equal to that devoted to tourism in those other two countries.

The position of the construction industry has been referred to. There is one point that I hope my right hon. Friend will bring to the attention of my right hon. Friend the Secretary of State for the Environment. The building societies were to have moved in to replace the mortgage funds which local authorities were no longer able to give in certain areas. This has not happened in my area, and that has ment a serious cutback in the number of houses being built in West Gloucestershire.

I wish to make one point in favour of bureaucracy. A jobcentre was opened in the Lydney area of my constituency and as a result there was an initial increase of 40 per cent. in the number of people finding jobs. That has now settled down at an increase of 20 per cent. above the previous level. I therefore urge my right hon. Friend to study the beneficial effects of the jobcentres, because in areas such as our those benefits can be enormous.

9.27 p.m.

Mr. David Mudd (Falmouth and Camborne)

Inevitably we have all had to truncate our speeches tonight, and we have been denied the opportunity of developing our arguments to the full. I had hoped to refer exhaustively to a statement by the Secretary of State for the Environment. I received his agreement that I should use it, but I feel that it would be improper to take up three or four minutes dealing with that item. I hope, therefore, that the right hon. Gentleman will forgive me if I do not use it tonight but instead use it against him on another occasion, when I shall press the point with increased fervour.

It is misleading to talk about unemployment in terms of percentages. Cornwall is regarded generally as a happy sunshine county where people sit on the kerbstones and eat pasties while sheltering from the sun under large umbrellas. However, Cornwall is facing its gravest unemployment problem in living memory. There are 16,000 people there looking for work. My hon. Friend the Member for St. Ives (Mr. Nott), if he had the chance to speak this evening, would explain that his constituency encounters the same trouble. He would have referred to 19. per cent. unemployment in Penzance, 32.4 per cent. male unemployment in St. Ives, and 20.2 per cent. male unemployment in Helston. I can refer to 12 per cent. unemployment in my constituency.

That percentage means that out of 100 men and women in my constituency who have the right to the dignity of work 12 have to stay at home and be deprived of what is a basic right in a civilised country. Against this problem it is not sufficient to be told that the Government are pumping in millions of pounds in job creation and retraining. We want action now.

I speak with particular bitterness. In the early 1950s I sampled unemployment in Falmouth. Attending week after week at the local employment exchange, I met men who told me that in the 1930s when they were boys their fathers pushed them in their prams to this employment ex. change. Then, in the 1950s, they were pushing their children to that same labour exchange. In 1977 the children of the 1950s intake, the grandchildren of the unemployed of the 1930s, are coming up to this continuing spiral, this repetitive cycle of unemployment in Cornwall.

That explains why I want the Government to tackle the problem in two ways. First, they must do all they can to bring about an immediate solution. Secondly, they must reconsider their overall economic strategy for Cornwall. I agree that this will take longer. There is a very straightforward and immediate solution that I can suggest. The crux of the unemployment problem in Cornwall is to be found in the problems of the building and construction industry. This happens at the very time when the greatest social problem in the country is the problem of homelessness. People are crying out for houses and those who could be building the houses are signing on at the employment exchanges. For heaven's sake, could the Government not set the builders to work at the task of providing homes, and two essential needs could be met in one solution.

I urge the Government to have a more leisurely look at Cornwall's problems, and to consider again the rôle of the service industries. They should consider the potential for the building industry, the educational services, the administrative services and the advancement of decentralised computerisation. I urge the Government not to give their industrial support to helping the bounty hunters who go in search of grants, but to the traditional industries in which we have the skills and which are the back bone of our economy and employment. Imported industry may well complete the picture but it is not the mainstay.

I hope that the Government will let us have specific details about the way in which the selective investment scheme is designed to help applicants in Cornwall. Let us see greater recognition of Cornish producers, who are prepared to meet the demands of exporting their produce. Let us see greater help given to those who reduce imports by providing more goods and services necessary for our own needs. We shall never succeed in getting new industries to replace those that are dying and decaying unless we develop the creative instincts of the businessmen who have the ability to create new outlets and opportunities.

Genuinely new businesses which will satisfy local skills are far more important in terms of security and job opportunity than the regional outposts of the national or multinational organisations. The more the Government can do to encourage people to launch these businesses in Cornwall, the more they will help the nation, and the more they will help to solve the continuing and repetitive cycle of unemployment in our country.

9.32 p.m.

Mr. John Hannam (Exeter)

As my hon. Friend the Member for Bodmin (Mr. Hicks) said, this debate is long overdue. Unfortunately, it is too short to allow many of us to develop the theme that we would like to develop—that is, that there is positive discrimination against our region in Government policies. We accept that the overall situation in the country is serious, but we see increasing evidence of discrimination in Government policies affecting our area.

There is a popular misconception that we live in beautiful countryside with a lovely coastline and that most of our time is spent in fleecing tourists. In fact, we are hardworking people who earn on average £7 a week less than the average industrial wage of the rest of the country. We have increasing evidence now that discrimination has been practised by the switching of resources from housing programmes in the South-West to other areas. The theme I want to develop concerns this switch of resources to the urban stress areas.

The building construction industry is one of the largest employers in Devon and Cornwall—

Mr. Maxwell-Hyslop

Was one of the largest.

Mr. Hannam

As my hon. Friend says, it was one of the largest. A year ago I led a delegation of builders, architects and representatives of local authorities and trade unions to No. 10 Downing Street to plead the case for more help to the construction industry in our area. The unemployment rate at that time was 21.8 per cent. in Cornwall and 14.5 per cent. in Devon, with pockets of more than 40 per cent. in some communities. But what did the Government do? Just a few months after that delegation, the Prime Minister announced in July that there would be a major switch of housing resources from our already distressed area to urban stress areas.

The result was that between July and December of last year, of 1,047 dwellings in Devon for which contracts would have been let, only 297 could go ahead. In other words, as a direct result of that one programme introduced by the Government, two-thirds of the Devon building programme went by the board. That information was based on a ministerial reply given to me on 3rd November.

Mr. Maxwell-Hyslop

Will my hon Friend reaffirm that he is talking of the present Prime Minister and not of Lady Falkender's protégé?

Mr. Hannam

I am, of course, refer. ring to the present Prime Minister, since the event to which I refer happened only in July last year.

When I asked again on 26th January for up-to-date figures to give an indication of the latest situation of the disaster facing our building construction industry, I was informed by the Under-Secretary of State for the Environment that no scheme had been cancelled, and that as to the programme up to 31st March the matter was being discussed with the local authorities. In other words, on this occasion the Government were so afraid of the figures that they would not even announce them in answer to my Question. So much for the open government of which we hear so much from the Secretary of State for Energy.

The facts are that the industry is in a state of collapse and that there are no jobs for many skilled and unskilled workers in the South-West. I understand from the Chairman of the Devon and Cornwall Emergency Committee for Construction that the latest information is that there has been an increase of 23 per cent. in the number of craftsmen unemployed since the last full figures of August 1976. The Department of the Environment in its National Consultative Council's quarterly report in December gave a depressing forecast of a 50 per cent. reduction in work load as against the previous year's already depressed figure. The report continued: The guarded optimism of last summer was destroyed by the Government's July switch of resources and the next six months will be desperate. I should like to have given other examples of the discriminatory nature of the Government's policies in respect of the South-West, but I have not the time to do so. We are earning much less in the South-West, and our costs of living are higher than in other parts of the country. For example, a person who lives in the South-West pays 8.1 per cent. more for his coal and electricity than do those in other parts of the country. The inhabitants of the South-West pay more to maintain their standard of living and they face higher transport costs because of the fuel costs in our region. There is evidence that we are a region of high costs and low wages, and we now face the discriminatory policies of a Labour Government.

I conclude by quoting the words of a trade union organiser who lives in my constituency. The man in question came to the House on Monday as part of a trade union delegation protesting at the decision of the Post Office not to carry out certain equipment installations. My constituent ended his letter to me by saying: To be without work is a social injustice! The biggest injustice of all is for our members to be made redundant because of a cut-back in Post Office spending in the South-West with its very bad record of unemployment. This is, to say the least, an example of the Government's contempt for the people of Devon and Cornwall.

9.39 p.m.

Mr. Jerry Wiggin (Weston-super-Mare)

In the three minutes that are available to me for making my contribution to this debate, I shall briefly touch on two significant statistics.

I wish first to refer to the fact that the South-West is about 1 per cent. of employed persons above the average national unemployment figure. I am concerned at the fact that this trend is expanding. The figure was 1 per cent. above national average in 1976, and this year the figure has risen to 1.1 per cent. That trend is extremely worrying. The Weston-super-Mare area has always been about 2 per cent. above the regional average. The figure is now nearly 11 per cent. for men.

It was once said that Weston-super-Mare was a nice place in which to be unemployed. An hon. Gentleman on the Government side said that in seaside towns there was therefore artificial unemployment. In January 1974 there were 292 vacancies in Weston-super-Mare. This year there were only 76, and most of them were for skilled men. There is no longer any artificial unemployment in seaside towns in the South-West or anywhere else.

What is being done to help young people who leave school and who are apparently not prepared, or in some cases not even clever enough—this deeply concerns me—to start doing even the most basic artisan training, whether in building, engineering or anything else? They seem unwilling and, frequently, incapable of taking on this task.

I mentioned to the Minister in an intervention the problem created in areas such as my constituency by nearby development areas. In our case the development area is South Wales, which seems to receive a substantial part of our national resources in almost every field to, I assume, the disadvantage of our region. My companies and industries have to compete on grossly distorted terms with those other parts of the country. Listening to the debate, and taking into account what the Minister said about empty advance factories, I wondered whether the regional employment premium and other such forms of assistance have been truly effective and whether we should not seek a different way of helping areas of high unemployment.

A young man who came to my interview session on Saturday had done well for himself. He had come off the shop floor and he was a sales engineer. He had worked for a company for a year and a half before receiving his notice. He pounded my desk and said: "Will you somehow tell the Government that it is the actions of the Government in taxation, legislation and general discouragement that have put my company in a position that means that I have to be laid off?" I told the young man that I should make that point tonight. There are thousands of young men like him in the South-West.

9.42 p.m.

Mr. James Prior (Lowestoft)

I agree wholeheartedly with what my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) has just said. A number of the measures that the Government have taken over the last three years have contributed enormously to the problems that the country would be facing in any case. The Employment Protection Act, lack of incentive and fear of capital taxation are affecting small businesses, and if small businesses do not run properly in such parts of the country as the extreme South-West there will be no businesses there at all.

People such as the hon. Member for Bristol, North-West (Mr. Thomas) do more damage to employment prospects than is done by anybody else. They frighten businesses and they frighten people from starting in business. They drive initiative out of the country.

Talking about hypocrisy, I shall quote some real hypocrisy from the right hon. Member for Huyton (Sir H. Wilson) just before the October 1974 General Election. He said: We will not have our own people out of work … unemployment represents the difference between our two parties. He can say that again. It does indeed represent the difference between our two parties. Since that time unemployment has more than doubled, and in many parts of the far West it has trebled.

As my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) fairly pointed out, every person out of work is a man who is losing dignity and respect for himself. It does not matter about the percentages. We know that the percentages are high, but the number of people unemployed is also high.

I was disappointed by the Minister's speech, because although he opened the debate with a speech of conciliation and care he had no new ideas. If I were writing a report, I should say that he was good on analysis and emotion but short on remedies. One of the things I should do, and which has been concentrated upon in the debate, is to develop the traditional interests of the area more than has been done previously. The Minister talked about the area being mostly a manufacturing one, but if he goes into Devon and Cornwall he will find that manufacturing is bound up with agriculture and fishing. We cannot have agricultural and fishing areas which do not feed and feed off processing and other ancillary industries. That is an important point. As my hon. Friend the Member for Devon, West (Mr. Mills) said, we are seeing a retrenchment in the agriculture industry, and that will affect employment prospects.

My right hon. Friend the Member for Taunton (Mr. du Cann) said that there was no disagreement about the end but only about the means. We do not believe that the policies pursued by the Government in the past three years are the answer to the nation's problems. They are proved not to be working because the situation is getting worse.

Let us help small industries more and give them the support they need, let us give the self-employed a chance to take on extra people, and let us support the traditional industries of the area. Above all, let us tell people such as the hon. Member for Bristol, North-West to shut up once and for all, because they are doing damage all round.

9.46 p.m.

The Minister of State, Department of Employment (Mr. Harold Walker)

I commiserate with hon. Members who have not been able to catch your eye, Mr. Speaker, or who, because of the limitation of time, have not been able to participate in the debate. I was astonished to hear the right hon. Member for Lowestoft (Mr. Prior) suggest that the answer to the problems of the South-West was to develop the traditional industries of agriculture and fisheries. A few moment's reflection will make it clear that, because of the size of the problem and the numbers of people unemployed, it is inconceivable that merely building up agriculture and fisheries would remedy the problems.

The House will understand that I cannot answer all the points made in the debate in the short time available to me. I shall do my best and I shall give careful consideration to those points upon which I do not touch and, where appropriate, I shall bring them to the attention of other Ministers.

I congratulate the hon. Member for Bodmin (Mr. Hicks) on his appearance at the Dispatch Box and I am sure that he will be there again, but I am astonished that he chose this debate to attack the Government's policy on inner cities and seemed to brush aside in a cavalier fashion the serious problems emerging in major conurbations such as London and Liverpool. He seemed to sneer at the Goverment's concern and our attempts to remedy those problems. I think that he and the hon. Members who supported him will have to live with that for some time to come. I hope that I am not correct, but I must assume that his view is a reflection of the official Opposition attitude.

Mr. Robert Boscawen (Wells)

Will the hon. Gentleman give way?

Mr. Walker

No, I shall not give way. The hon. Gentleman has not been in the House for the whole of the debate.

Mr. Boscawen

On a point of order, Mr. Speaker. Is it in order for the Minister to say that I have not been in the House for the whole of the debate when I have been sitting here for every single moment of it?

Mr. Walker

If that is the case, I apologise to the hon. Gentleman. I beg his pardon if I have done him an injustice and readily give way to him.

Mr. Boscawen

The Minister says that he does not understand the resentment felt in rural areas about the substantial transfer of resources from those areas to innercities. That is a point which must be got home to him.

Mr. Walker

That was not the point that was made by the hon. Member for Bodmin. If he intended to make that point, he did not express it in those terms. The hon. Member might care to look in Hansard tomorrow to see what he said.

I now turn to the specific points made by a number of hon. Members. The hon. Member for Bodmin raised the question of withdrawing the regional employment premium. When deciding on the withdrawal of REP the Government had to take into account that the value of payment has been eroded by inflation and the proposed harmonisation of rates for men and women. In the current economic situation a considerable increase would have been required to restore the original value of the premium. In the present circumstances that is not on. I am sure that the House will understand that.

At its existing value it is doubtful whether the premium was achieving its original purpose of generating and maintaining employment in the regions. Owing to the non-selective nature of the payments, a large proportion of the money was going to firms that would have stayed in the area anyway. We thought that it was better to use the available money in a more cost-effective and selective way. We have decided to make an additional £80 million available in each of the next two years for further selective assistance for industry. That will enable a new selective assistance scheme to be introduced. It will make available more money for the National Enterprise Board and for selective schemes designed to improve certain industries.

Mr. Peter Emery (Honiton)

Will the Minister try to ensure that assistance is given to pockets of unemployment in areas that are not development, or assisted areas that are sometimes only towns that at present get nothing?

Mr. Walker

I understand that request, because assistance under Section 7 of the Industry Act is limited to assisted areas. I shall draw the attention of the Secretary of State for Industry to that because I know that it has been put to him on several occasions. The representation made by the hon. Member for Honiton (Mr. Emery) will reinforce those that have been made already.

I return to regional employment premium. I do not want to make a political point, but I remind the House that the Conservative Party opposite when in office indicated a firm intention to withdraw REP. Recipients have therefore had two years that they did not expect in which to draw the premium.

Agriculture is another important industry in the area. Because of the time I can say little about it. But we recognise the importance of agriculture to the economy as a whole. It is one of the country's major industries and in the South-West it makes a particularly important contribution to economic activity.

Despite the set-backs suffered last year, mainly because of the drought, the prospects and profitability in the industry as a whole are reasonable. Given normal weather, net profits should recover in 1977-78. The House will be gratified that a Minister from the Department of Agriculture, Fisheries and Food has been present during the debate.

My hon. Friend the Member for Gloucestershire, West (Mr. Watkinson) raised the problem facing the textile industry, among other matters. I shall not go into detail about that subject because when we had a debate on the North-West on 3rd February I dealt in detail with the present position and the Government's response to it. I hope that my hon. Friend will be satisfied to read that debate in Hansard.

The aerospace industry is important in the South-West, particularly in Bristol and Gloucester. Again, this is a major industry that is facing difficulties, but there are signs that the market for civil airlines will pick up soon. The Government are anxious that the industry should share in the profit that this revival will bring. I stress the importance of reaching a decision about the Aircraft and Shipbuilding Industries Bill. I shall not say anything about what has been hap- pening in the other half of the building, except to express concern that the interests of many thousands of workers are at stake. Neither their Lordships nor anyone else in Parliament should play around with the future of those workers.

Likewise, my hon. Friend the Member for Kingswood (Mr. Walker) has a strong constituency interest in the footwear industry. He will know that the report of the Footwear Study Group is in the final stages of preparation. A decision on publication will be taken when the report is complete.

I should like to say something about another matter that was raised by a number of right hon. and hon. Members—roads. Good communications, we recognise, are crucial to the South-West—as to everywhere, but perhaps more particularly so here. Good progress appears to have been made. The M5 is open as far as Exeter. Traffic can move into the South-West by motorway from the extreme north-east or north-west of the country. The last section, which will bypass Exeter, should open in the spring. From there the A38 dual carriageway trunk road runs on to Plymouth, and the A30, the shortest way from Devon to Cornwall, is being comprehensively improved.

A major proposal, to which the right hon. Member for Devon, North (Mr. Thorp) referred, is the road link with the M5 to North Devon. I understand that my right hon. Friend the Secretary of State for Transport is currently considering a submission from Devon County Council, which has been reinforced, I understand, by other right hon. and hon. Members. My right hon. Friend will give full weight to the potential contribution that this road development could make to the development of the region when he is assessing its merits. Certainly I shall ensure that all the remarks made in the debate on this subject are drawn to my right hon. Friend's attention.

I should like briefly to touch on a point raised by the right hon. Member for Taunton (Mr. du Cann). That was defence cuts and, in particular, the defence cut that affects his constituency of Taunton where, as he rightly pointed out, nearly 400 jobs will be lost. However, I think that I am entitled to draw his attention to the fact that the major part of the job losses, as I understand it, will not occur anyhow until 1980–81. Some, it is true, will occur in 1977, but as I understand it the major burden of redundancies will take place in 1980–81, so there is a breathing space and an opportunity for some wastage to take place.

It is a matter of great regret that a very important matter to which I had hoped to have time to refer to more fully is small firms. Member after Member, on both sides of the House, has expressed his anxiety about small firms. That anxiety is shared by the Government. I think that we have done more than any previous Government to reflect that anxiety for small firms. Indeed, my hon. Friend the Under-Secretary of State for Industry, the Member for Keighley (Mr. Cryer), has been present during most of the debate. He has special ministerial responsibility for small firms, and the House will know the vigour with which he is carrying out his responsibility.

Among other things that we have done is the introduction of a pilot counselling service in the South-West. I think that my hon. Friend the Under-Secretary opened it in November last year. He has also brought into operation a scheme to encourage small firms to consider collaboration in areas of mutual interest,

and thereby to cut overheads and to increase productivity.

As I said in the debate a fortnight ago, large firms, too, can help small firms. One of the big problems facing small firms is the shortening of credit terms and the growing practice of bigger firms to try to improve their own liquidity by delaying the payment of small firms' bills. I hope that big firms will see themselves as having some responsibility to help small firms.

My final point is that it is a surprising fact that, notwithstanding the rise in unemployment, and the proper and legitimate concern about that, over the last five years the number of jobs and the number of people in employment in the South-West have actually grown. In 1971 there were 1,429,000 people in employment there. In 1976, the number was 1,517,000. In other words—and this in no way diminishes our concern about unemployment, nor about the hardship that it causes—this suggests that there are demographic factors that are influencing the level of unemployment.

Question put, That this House do now adjourn:—

The House divided: Ayes 257, Noes 275.

Division No. 78.] AYES [10.00 p.m.
Adley, Robert Channon, Paul Fletcher-Cooke, Charles
Aitken, Jonathan Churchill, W. S. Fookes, Miss Janet
Alison, Michael Clark, Alan (Plymouth, Sutton) Forman, Nigel
Amery, Rt Hon Julian Clark, William (Croydon S) Fowler, Norman (Sutton C'f'd)
Arnold, Tom Clarke, Kenneth (Rushcliffe) Fox, Marcus
Atkins, Rt Hon H. (Spelthorne) Clegg, Walter Fraser, Rt Hon H. (Stafford & S')
Awdry, Daniel Cockcroft, John Freud, Clement
Baker, Kenneth Cooke, Robert (Bristol W) Fry, Peter
Beith, A. J. Cope, John Galbraith, Hon T. G. D.
Bell, Ronald Cordle, John H. Gardiner, George (Reigate)
Bennett, Sir Frederic (Torbay) Cormack, Patrick Gardner, Edward (S. Fylde)
Bennett, Dr Reginald (Fareham) Corrie, John Gilmour, Sir John (East Fife)
Benyon, W. Costain, A. P. Glyn, Dr Alan
Berry, Hon Anthony Critchley, Julian Godber, Rt Hon Joseph
Biffen, John Crouch, David Goodhart, Philip
Biggs-Davison, John Crowder, F. P. Goodhew, Victor
Blaker, Peter Dean, Paul (N Somerset) Goodlad, Alastair
Body, Richard Dodsworth, Geoffrey Gorst, John
Boscawen, Hon Robert Douglas-Hamilton, Lord James Gower, Slr Raymond (Barry)
Bottomley, Peter Drayson, Burnaby Grant, Anthony (Harrow C)
Bowden, A, (Brighton, Kemptown) du Cann,Rt Hon Edward Gray, Hamish
Boyson, Dr Rhodes (Brent) Durant, Tony Grieve, Percy
Braine, Sir Bernard Dykes, Hugh Griffiths, Eldon
Brittan, Leon Eden, Rt Hon Sir John Grist, Ian
Brocklebank-Fowler, C. Edwards, Nicholas (Pembroke) Grylls, Michael
Brotherton, Michael Elliott, Sir William Hall, Sir John
Brown, Sir Edward (Bath) Emery, Peter Hall-Davis, A. G. F.
Bryan, Sir Paul Eyre, Reginald Hamilton, Michael (Salisbury)
Buck, Antony Fairbairn, Nicholas Hampson, Dr Keith
Budgen, Nick Fairgrieve, Russell Hannam, John
Bulmer, Esmond Farr, John Harrison, Col Sir Harwood (Eye)
Burden, F. A. Fell, Anthony Harvie Anderson, Rt Hon Miss
Butler, Adam (Bosworth) Finsberg, Geoffrey Hastings, Stephen
Carlisle, Mark Fisher, Sir Nigel Havers, Sir Michael
Chalker, Mrs Lynda Fletcher, Alex (Edinburgh N) Hayhoe, Barney
Heath, Rt Hon Edward Miller, Hal (Bromsgrovs) Scott, Nicholas
Hicks, Robert Mills, Peter Shaw, Giles (Pudsey)
Higgins, Terence L. Miscampbell, Norman Shelton, William (Streatham)
Hodgson, Robin Mitchell, David (Basingstoke) Shepherd, Colin
Holland, Philip Monro, Hector Shersby, Michael
Hordern, Peter Montgomery, Fergus Silvester, Fred
Howe, Rt Hon Sir Geoffrey Moore, John (Croydon C) Sims, Roger
Howell, Ralph (North Norfolk) More, Jasper (Ludlow) Sinclair, Sir George
Hunt, David (Wirral) Morgan, Geraint Skeet, T. H. H.
Hunt, John (Bromley) Morgan-Giles, Rear-Admiral Smith, Dudley (Warwick)
Hurd, Douglas Morris, Michael (Northampton S) Speed, Keith
Hutchison, Michael Clark Morrison, Charles (Devizes) Spence, John
Irving, Charles (Cheltenham) Morrison, Hon Peter (Chester) Spicer, Jim (W Dorset)
James, David Mudd, David Spicer, Michael (S Worcester)
Jenkin, Rt Hon P. (Wanst'd & W'df'd) Neave, Airey Sproat, Iain
Jessel, Toby Nelson, Anthony Stainton, Keith
Johnson Smith, G. (E Grinstead) Neubert, Michael Stanbrook, Ivor
Jones, Arthur (Daventry) Nott, John Steel, Rt Hon David
Jopling, Michael Onslow, Cranley Steen, Anthony (Wavertree)
Joseph, Rt Hon Sir Keith Oppenheim, Mrs Sally Stewart, Ian (Hitchin)
Kaberry, Sir Donald Page, John (Harrow West) Stokes, John
Kershaw, Anthony Page, Rt Hon R. Graham (Crosby) Stradling Thomas, J.
Kimball, Marcus Page, Richard (Workington) Tapsell, Peter
King, Evelyn (South Dorset) Parkinson, Cecil Taylor, R. (Croydon NW)
Kitson, Sir Timothy Pattie, Geoffrey Taylor, Teddy (Cathcart)
Knight, Mrs Jill Penhaligon, David Tebbit, Norman
Knox, David Percival, Ian Temple-Morris, Peter
Langford-Holt, Sir John Peyton, Rt Hon John Thatcher, Rt Hon Margaret
Latham, Michael (Melton) Pink, R. Bonner Thomas, Rt Hon P. (Hendon S)
Lawrence, Ivan Price, David (Eastlelgh) Thorpe, Rt Hon Jeremy (N Devon)
Le Merchant, Spencer Prior, Rt Hon James Townsend, Cyril D.
Lester, Jim (Beeston) Pym, Rt Hon Francis Trotter, Neville
Lewis, Kenneth (Rutland) Raison, Timothy van Straubenzee, W. R.
Lloyd, Ian Rathbone, Tim Vaughan, Dr Gerard
Loveridge, John Rawlinson, Rt Hon Sir Peter Viggers, Peter
Luce, Richard Rees, Peter (Dover & Deal) Walder, David (Clitheroe)
McCrindle, Robert Rees-Davies, W. R. Walker, Rt Hon P. (Worcester)
Macfarlane, Neil Renton, Rt Hon Sir D. (Hunts) Wall, Patrick
MacGregor, John Renton, Tim (Mid-Sussex) Walters, Dennis
Macmillan, Rt Hon M. (Farnham) Ridley, Hon Nicholas Warren, Kenneth
McNair-Wilson, M. (Newbury) Ridsdale, Julian Weatherill, Bernard
McNair-Wilson, P. (New Forest) Rifkind, Malcolm Wells, John
Madel, David Rippon, Rt Hon Geoffrey Whitelaw, Rt Hon William
Marshall, Michael (Arundel) Roberts, Michael (Cardiff NW) Wiggin, Jerry
Marten, Neil Roberts, Wyn (Conway) Winterton, Nicholas
Mates, Michael Rodgers, Sir John (Sevenoaks) Wood,Rt Hon Richard
Maude, Angus Ross, Stephen (Isle of Wight) Young, Sir G. (Ealing, Acton)
Maudling, Rt Hon Reginald Rossi, Hugh (Hornsey) Younger, Hon George
Mawby, Ray Rost, Peter (SE Derbyshire)
Maxwell-Hyslop, Robin Royle, Sir Anthony TELLERS FOR THE AYES:
Mayhew, Patrick Sainsbury, Tim Mr Nigel Lawson and
Meyer, Sir Anthony St. John-Stevas, Norman Mr Carol Mather
Abse, Leo Butler, Mrs Joyce (Wood Green) Davies, Denzil (Llanelli)
Allaun, Frank Callaghan, Rt Hon J. (Cardiff SE) Davies, Ifor (Gower)
Anderson, Donald Callaghan, Jim (Middleton & P) Davis, Clinton (Hackney C)
Archer, Peter Campbell, Ian Deakins, Eric
Armstrong, Ernest Canavan, Dennis Dean, Joseph (Leeds West)
Ashley, Jack Cant, R. B. Dell, Rt Hon Edmund
Ashton, Joe Carmichael, Neil Dempsey, James
Atkins, Ronald (Preston N) Carter, Ray Doig, Peter
Atkinson, Norman Carter-Jones, Lewis Dormand, J. D.
Bagier, Gordon A. T. Cartwright, John Douglas-Mann, Bruce
Barnett, Guy (Greenwich) Clemitson, Ivor Duffy, A. E. P.
Barnett, Rt Hon Joel (Heywood) Cocks, Rt Hon Michael Dunn, James A.
Bates, Alf Cohen, Stanley Dunnett, Jack
Bean, R. E. Coleman, Donald Edge, Geoff
Benn, Rt Hon Anthony Wedgwood Colquhoun, Ms Maureen Edwards, Robert (Wolv SE)
Bennett, Andrew (Stockport N) Concannon, J. D. Ellis, John (Brigg & Scun)
Bidwell, Sydney Conlan, Bernard English, Michael
Bishop, E. S. Cook, Robin F. (Edin C) Ennals, David
Blenkinsop, Arthur Corbett, Robin Evans, Fred (Caerphilly)
Boardman, H. Cowans, Harry Evans, Ioan (Aberdare)
Booth, Rt Hon Albert Cox, Thomas (Tooting) Evans, John (Newton)
Bottomley, Rt Hon Arthur Craigen, Jim (Maryhill) Ewing, Harry (Stirling)
Boyden, James (Bish Auck) Crawshaw, Richard Faulds, Andrew
Bradley, Tom Cronln, John Fernyhough, Rt Hon E.
Bray, Dr Jeremy Crowther, Stan (Rotherham) Fitt, Gerard (Belfast W)
Brown, Hugh D. (Provan) Cryer, Bob Flannery, Martin
Brown, Robert C. (Newcastle W) Cunningham, G. (Islington S) Fletcher, Ted (Darlington)
Brown, Ronald (Hackney S) Cunningham, Dr J. (Whiteh) Foot, Rt Hon Michael
Buchan, Norman Davidson, Arthur Ford, Ben
Buchanan, Richard Davies, Bryan (Enfield N) Forrester, John
Fowler, Gerald (The Wrekin) Lyons, Edward (Bradford W) Roper, John
Fraser, John (Lambeth, N'w'd) Mabon, Rt Hon Dr J. Dickson Ross, Rt Hon W. (Kilmarnock)
Freeson, Reginald McCartney, Hugh Ryman, John
Garrett, John (Norwich S) McDonald, Dr Oonagh Sedgemore, Brian
Garrett, W. E. (Wallsend) McElhone, Frank Selby, Harry
George, Bruce MacFarquhar, Roderick Shaw, Arnold (Ilford South)
Gilbert, Dr John McGuire, Michael (Ince) Sheldon, Rt Hon Robert
Ginsburg, David MacKenzie, Gregor Short, Mrs Renée (Wolv NE)
Golding, John Mackintosh, John P. Silkin, Rt Hon John (Deptford)
Gould, Bryan Maclennan, Robert Silkin, Rt Hon S. C. (Dulwich)
Gourley, Harry McMillan, Tom (Glasgow C) Sillars, James
Graham, Ted McNamara, Kevin Silverman, Julius
Grant, George (Morpeth) Madden, Max Skinner, Dennis
Grant, John (Islington C) Magee, Bryan Small, William
Grocott, Bruce Mallalieu, J. P. W. Smith, John (N Lanarkshire)
Hamilton, James (Bothwell) Marks, Kenneth Snape, Peter
Harrison, Walter (Wakefield) Marquand, David Spearing, Nigel
Hart, Rt Hon Judith Marshall, Dr Edmund (Goole) Spriggs, Leslie
Hattersley, Rt Hon Roy Marshall, Jim (Leicester S) Stewart, Rt Hon, M. (Fulham)
Hayman, Mrs Helene Maynard, Miss Joan Stoddart, David
Heffer, Eric S. Meacher, Michael Stott, Roger
Hooley, Frank Mellish, Rt Hon Robert Strang, Gavin
Horam, John Mendelson, John Strauss, Rt Hon G. R.
Howell, Rt Hon Denis (B'ham, Sm H) Mikardo, Ian Summerskill, Hon Dr Shirley
Hoyle, Doug (Nelson) Millan, Rt Hon Bruce Swain, Thomas
Huckfield, Les Miller, Dr M. S. (E Kilbride) Taylor, Mrs Ann (Bolton W)
Hughes, Rt Hon C. (Anglesey) Molloy, William Thomas, Jeffrey (Abertillery)
Hughes, Robert (Aberdeen N) Moonman, Eric Thomas, Mike (Newcastle E)
Hughes, Roy (Newport) Morris, Alfred (Wythenshawe) Thomas, Ron (Bristol NW)
Hunter, Adam Morris, Charles R. (Openshaw) Tierney, Sydney
Irvine, Rt Hon Sir A. (Edge Hill) Morris, Rt Hon J. (Aberavon) Tinn, James
Irving, Rt Hon S. (Dartford) Moyle, Roland Tomlinson, John
Jackson, Colin (Brighouse) Murray, Rt Hon Ronald King Torney, Tom
Jackson, Miss Margaret (Lincoln) Newens, Stanley Tuck, Raphael
Janner, Greville Noble, Mike Urwin, T. W.
Jay, Rt Hon Douglas Oakes, Gordon Varley, Rt Hon Eric G.
Jeger, Mrs Lena Ogden, Eric Wainwright, Edwin (Dearne V)
Jenkins, Hugh (Putney) O'Halloran, Michael Walden, Brian (B'ham, L'dyw'd)
John, Brynmor Orbach, Maurice Walker, Harold (Doncaster)
Johnson, James (Hull West) Orme, Rt Hon Stanley Walker, Terry (Kingswood)
Johnson, Walter (Derby S) Ovenden, John Ward, Michael
Jones, Alec (Rhondda) Owen, Rt Hon Dr David Watkins, David
Jones, Barry (East Flint) Padley, Walter Weetch, Ken
Jones, Dan (Burnley) Palmer, Arthur Weitzman, David
Judd, Frank Park, George Wellbeloved, James
Kelley, Richard Parker, John White, James (Pollak)
Kerr, Russell Pavitt, Laurie Whitehead, Phillip
Kilroy-Silk, Robert Pendry, Tom Whitlock, William
Kinnock, Neil Perry, Ernest Willey, Rt Hon Frederick
Lambie, David Phipps, Dr Colin Williams, Rt Hon Alan (Swansea W)
Lamborn, Harry Prentice, Rt Hon Reg Williams, Alan Lee (Hornch'ch)
Lamond, James Price, C. (Lewisham W) Williams, Sir Thomas (Warrington)
Latham, Arthur (Paddington) Price, William (Rugby) Wilson, Alexander (Hamilton)
Leadbitter, Ted Radice, Giles Wilson, Rt Hon Sir Harold (Huyton)
Lee, John Rees, Rt Hon Merlyn (Leeds S) Wilson, William (Coventry SE)
Lever, Rt Hon Harold Richardson, Miss Jo Wise, Mrs Audrey
Lewis, Arthur (Newham N) Roberts, Albert (Normanton) Woof, Robert
Lewis, Ron (Carlisle) Roberts, Gwilym (Cannock) Wrigglesworth, Ian
Lipton, Marcus Robinson, Geoffrey Young, David (Bolton E)
Litterick, Tom Roderick, Caerwyn
Loyden, Eddie Rodgers, George (Charley) TELLERS FOR THE NOES:
Luard, Evan Rodgers, Rt Hon William (Stockton) Mr A W Stallard and
Lyon, Alexander (York) Rooker, J. W. Mr Frank R White
Question accordingly negatived.