§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Stoddart.]
§ 12.3 a.m.
§ Mr. Gordon Wilson (Dundee, East)I initiated this Adjournment debate on declining employment prospects in Dundee for two reasons. The first is that the city is facing severe problems of a major nature which will have adverse effects on employment and the lives of my constituents. The second is that, until recently, the Government have failed to show any real and urgent appreciation of the extent of the problems.
At the outset, I must make it clear that Dundee, in my opinion, has a tremendous industrial potential. The city occupies a strategic position and has an excellent location, a good reservoir of skills and fair communications. The long-term future should be good, provided that we can plan and act now in a constructive manner.
There has been a mistaken assumption by the Government and by some commentators that the whole East Coast of Scotland is prosperous as a result of the recent oil boom. Unfortunately, that is not the case in respect of Dundee and, for that matter, Tayside as a whole and parts of Fife. The problems of Dundee in dealing with industrial structure mirror more closely those of West Central Scotland than the plusher areas like Aberdeen and Edinburgh. The situation facing Dundee and Tayside is not of recent origin, but, as I shall indicate later, it is becoming more serious.
Compared with Great Britain as a whole, Tayside, of which Dundee forms part, is an area of low earnings and deteriorating unemployment rates and has had a poor record in recent years of creation of new job opportunities. In the recent report submitted by the regional council to the Scottish Office about employment prospects I understand that reference was made to the jobs which could be developed over the coming years, and I understand also that the Scottish Office thought that the prediction of the regional council was too optimistic.
1606 It is a pity that this has happened in contrast to the magnificent environmental attractions with which the region and the city itself are endowed. Many of our difficulties have emerged from Dundee's traditional dependence on the jute trade and textiles which have been in steady decline over the last few decades. While Dundee has been diversifying considerably—it was particularly successful from the post-war period up to the early 1960s—its success has always been eroded by the constant dripping of job losses encountered from the textile industry and certain other established activities in the town.
During this period, the city failed to secure either by generation or attraction an appropriate share of new manufacturing employment. There has also been no compensating increase in jobs in the service industries and little new employment has, with some creditable exceptions, been generated by oil-related activities. Between 1972 and 1975 there was a loss of 1,500 manufacturing jobs. From 1963 to 1973 employment in Tay-side fell by 8 per cent. compared with a corresponding fall in Scotland as a whole of under 3 per cent. This is largely due to the fact that while the region lost jobs in both manufacture and agriculture, as in Scotland as a whole, there was no corresponding increase in the service industries. Indeed, if latterly there had been no increase in employment in local government, the health services and higher education there would have been an unprecedented fall in the service sector. Cuts in public expenditure now taking place, leading as they will to redundancies, will hardly help to rectify the imbalance. It is against this background that recent events will prove damaging.
The Minister is aware of the announcements in recent months which could lead to an explosion in unemployment in the city, but for the record I shall detail them. In October 1976 there was 9 per cent. male and 6.2 per cent. female unemployment. In the meantime, under the 90-day rule, there is the prospect of 600 redundancies from NCR due to a switchover from mechanical to electronic products, bringing down the work force of about 1,300, 300 construction workers from Dundee District Council labour department, and the loss of 620 jute 1607 workers employed by Sidlaw Industries. In all some 1,520 workers face unemployment this year, and even leaving out of account the prospect of a rundown in the private sector of the construction industry, this could represent an increase of 20 per cent. in the number of jobless in Dundee.
Indeed, such is the job starvation in the city at present that a new and expanding electrical plant manufacturing firm wrote to me in November, saying
Last week we advertised 14 vacancies in the Courier and Advertiser and had more than 400 applicants by 2 o'clock in the afternoon".The Minister is well aware of my view that much of Scotland's problems can be placed at the door of successive Governments and that there is need for new expansionist economic policies combined with investment of Scottish oil revenues in Scotland: but tonight I want to make some suggestions of a positive and what I hope is a helpful nature with the intention of helping Dundee specifically.Quite clearly, however, the overall position would be improved if the Government were to review their cancellation of the regional employment premium scheme and their decision to delay payments of development grants. Regional employment premium in Tayside is worth £4.8 million a year to the region's economy. It is a manpower subsidy and its withdrawal could lead either to further redundancies or to profit levels in the region being eroded, with the effect that investment would fall.
Although innumerable efforts have been made to persuade the Government to grant the area special development status, not only by myself and by the hon. Member for Dundee West (Mr. Doig), who is present, but by the Chamber of Commerce, the district council, the region, and the trade unions, nothing has yet happened. The last request I received in this direction was a letter from the chairman of the National Cash Register joint shop stewards' committee on 12th October. So far these requests have been in vain, but I was encouraged to receive a letter from the Secretary of State stating that, although he could hold out no immediate hope, the prospect of special development status had not been entirely ruled out. I hope that in view of what is to happen in Dundee this year the 1608 Government will give further attention to that proposition.
I turn to advance factories. With the jute closures and the surrender by NCR of its factories at Dryburgh, Dunsinane and Birkhill, Dundee will have substantial space for incoming industry. The difficulty will be to find enough footloose industries to fill the factories that have been vacated. With indications that the industrial base of the city might be capable of being widened through the building up or starting of smaller firms, there is, however, a shortage of smaller units.
The Scottish Development Agency has plans for nest units of 2,500 square feet, but no indication is given of the starting date or completion. I should like the Minister to indicate what action will be taken to speed up these smaller units.
I am also told that, due to a shortage of funds, it has not proved possible for the region to supply necessary water, sewerage, landscaping, or grading services for the development of the site at West Pitkerro. These services and access to electrical power are essential to make the site available for early development. Most new towns have 50 to 100 acres of serviced sites always available to industry, and I hope that the same facility could be provided in Dundee through the provision of finance by Government to the regional council and, where relevant, also by the district council.
I should also like to say how appreciative I am to learn from a letter of 22nd December that the Scottish Economic Planning Department will make special efforts to persuade industrialists to seek new locations in Scotland and to visit Dundee with the hope of establishing factories in the city. Any further information that the Minister can provide on this would be welcome.
Help is also required for infrastructural support. While progress is being made in the provision of a road network, there is still room for upgrading communications with the North-East. Economists at Dundee University have stated that the development of Tayside and Dundee could be impaired by lack of better harbour and air facilities.
I ask the Minister to see whether finance can be found for upgrading of the airstrip, so that it can take charter 1609 aircraft to service industry in the city more reliably than at present, when its grass surface is frequently waterlogged. I should also like him to pay particular attention to the future of the Stannergate extension to the harbour, by provision of either roll-on/roll-off facilities or additional North Sea oil industry service quays. It would help if the Government could give a grant to the port authority. These projects, together with a definite promise of funds for the new Grove Academy, which is scheduled for 1978–79 as a replacement for the antiquated, divided and overcrowded premises now occupied by the school, would also be of great help to the construction industry, which is in the doldrums.
Lastly, I should like to refer to the firm of Veeder Root. This firm has been involved in the production of mechanical counting units for petrol pumps and has invested over £1 million in the development and production of a British-made tachograph. Money has been spent in designing, tooling and marketing. The company says that it is prepared to invest another £1 million in the project if it proves successful. Unfortunately, because of a dispute within the TGWU, the tachograph regulations imposed by the EEC have not so far been applied to the United Kingdom, and the investment by Veeder Root has been rendered useless. The company has 50 employees in this sector, but could increase the number by 200 if the Government managed to have the ban lifted.
I read with interest this week that Mr. Jack Jones of the TGWU had been successful in his intervention over the Meriden factory. I hope that the Government may be able to persuade him to use his influence within the union to get it to allow the use of the tachograph and thus bring about 200 additional jobs to Dundee. That would be of tremendous value to the community in the time of stress that we face in the coming year.
The city needs help now. I understand from the correspondence I have recently received from the Minister that the Government have come to the conclusion that urgent action is needed. Considerable pressure has been applied in the city, not only from within the hon. Gentleman's own party but from other 1610 parties and other bodies, calling for action. We sometimes feel in Dundee that we are ignored compared with other areas. If the statements in the Minister's letter are correct, I have hopes that that will not occur in future, but we shall see.
The city and the surrounding localities have all that it takes to build up a good and prosperous future. There is evidence of more local investment and initiative, perhaps more than ever before. Therefore, it would be wrong to be too pessimistic. But the structural difficulties that the city faces are such as to require immediate help from the Government.
§ 12.17 a.m.
§ The Minister of State, Scottish Office (Mr. Gregor MacKenzie)We should be grateful to the hon. Member for Dundee, East (Mr. Wilson), who has put his case on behalf of the city of Dundee and environs very clearly tonight. I know from the correspondence I have received from the hon. Gentleman that he has been greatly concerned about the employment position. I have also been in correspondence with my hon. Friend the Member for Dundee, West (Mr. Doig), and have been in almost daily contact with my hon. Friend, who is also here tonight. Both have put to me the city's serious problems.
The hon. Gentleman touched on a number of issues of considerable concern to his constituents. I can assure him of my personal concern and that of my right hon. Friend the Secretary of State, who knows Dundee pretty well. The hon. Gentleman can be satisfied that my right hon. Friend will certainly consider the problem. All of us worry about such problems, not only in Dundee but throughout Scotland. We know them to be the result of a deep and lasting recession, probably the most serious since the war.
The position in Dundee has deteriorated in recent months. It is a matter of much concern to us. However, I was interested to hear recently that in the jute industry there are a number of unfilled vacancies. Therefore, we should bear in mind the hon. Gentleman's point that it is not all gloom.
The hon. Gentleman mentioned the problems of NCR and Sidlaw Industries. In their own way they highlight the serious nature of the problems facing the 1611 city. Apart from the general effects of the recession, the hon. Gentleman and my hon. Friend have often reminded me that NCR is being obliged to reduce its labour force because, with the introduction of the latest technology, fewer people are needed to assemble its products. Sidlaw Industries is seeking to diversify its production in an effort to combat a continuing decline in the traditional jute industry. In order to remain competitive in its present markets and to make a success of its diversification, the company considers that it must rationalise its production and cut costs.
These are difficult problems and they have to be faced if these industries are to survive in Dundee. It is unfortunate that these redundancies have come at a time when unemployment prospects in other industries are severely affected by the recession. I have been closely involved in many of the matters raised by the hon. Member. My right hon. Friend the Secretary of State visited the city in September and discussed the employment problem with the lord provost and representatives of the bodies most directly concerned with the industrial life of the city. Much has been done to try and alleviate the problems.
My officials are currently making a special effort to persuade industrialists seeking a new location in Scotland to visit Dundee. I am grateful for the compliments the hon. Gentleman paid to the work of my staff. They are also engaged on an extensive programme of visits aimed at stimulating employment. Many of the larger companies have been visited to make sure that they are aware of the assistance which the Government can provide. A seminar was held in the city recently which was well attended and well received by local industrialists and at which we informed them of the assistance being offered by the Government.
These special efforts to assist Dundee have been made over and above the continuing encouragement by the Government of new industrial investment in all parts of the country. I emphasise again, as I have done repeatedly in Scotland over recent months, that generous assistance is available through my Department's office in Glasgow for new projects and the expansion of existing facilities.
1612 The problems of Dundee are reflected in many other parts of Scotland and the Government are determined to bring down the level of unemployment in Scotland as quickly as possible. For the present we are unable to follow the traditional road to this end by reflating the economy. We have a balance of payments deficit and a high rate of inflation and these must be put right to provide a sound base for economic growth. Progress has been made and the recent measures will help to divert more resources to industrial investment and assist towns such as Dundee.
In the meantime, much has been done to alleviate unemployment. The temporary employment subsidy, the Job Creation Programme and the recruitment subsidy for school leavers have made a significant impact. These measures have already created or protected over 2,000 jobs in the Dundee and Tayside area. The recently introduced job release scheme will provide further help.
For the longer term, our strategy is to ensure that we direct more of our resources into manufacturing industry. This is essential if we are to remain in the forefront of trading nations. We should stimulate growth and establish an economic climate which should provide better opportunities for the nation as a whole. Dundee, which is of course a development area, will be well placed to benefit from industrial recovery, as it has done in the past. In addition to regional development grants, selective assistance under Section 7 of the Industry Act 1972, totalling £3.6 million has been granted towards capital projects designed to create or safeguard nearly 4,000 jobs in the Dundee area.
We have already announced an increase in the resources of the National Enterprise Board and the Scottish and Welsh Development Agencies. There is also an initial allocation of £100 million for a new selective investment scheme. This is in addition to the £205 million already set aside to stimulate investment in certain key sectors of industry.
The hon. Gentleman asked about factories and small nest units. The timing here is primarily a matter for the judgment of the Scottish Development Agency. I have noted his remarks and shall bring them to the attention of the Agency. No 1613 doubt the chairman will write to the hon. Gentleman on this subject. The chairman and the chief executive of the Agency have visited Dundee in recent months to see the situation at first hand and I am told that they hope that another Agency factory in Dundee will be occupied soon and that it will provide another 100 jobs. The Agency has also had discussions with the district council about the important problem of clearing derelict land.
The hon. Gentleman raised the issue of special development status for the Dundee area. Many people feel that certain difficulties are best solved by increasing the status of the area. I have never believed that that is the panacea for all our ills. I sometimes wonder whether the granting of special development area status might be a little counter-productive. In the current situation it is worth bearing in mind that the real problem is not the incentives that the Government can give but the number of industries that may be steered into assisted areas. We shall take all these considerations into account.
Unemployment is a factor in the degree of development area status but not the only one, as the hon. Gentleman well knows. These areas are constantly being monitored by the Scottish Office and the Department of Industry. The hon. Gentleman will not expect me to comment on the matter tonight.
The hon. Gentleman asked about some specific problems in respect of Dundee harbour and the development that is proposed to take place at the Stannergate to accommodate a roll-on/roll-off terminal. This is a good concept. Authorisation for a project of this kind is a matter for my hon. Friend the Secretary of State for Transport. I understand that no formal application has yet been lodged, but I know that Department of Transport officials in Edinburgh will be happy to help in assessing any such proposals and discussing ways in which the viability of the scheme might be improved.
The hon. Gentleman mentioned the development of the airstrip. He was referring, no doubt, to the proposal made by the regional council for a development which would cost almost £1 million. This has already received careful consideration by the Scottish Development Department. The regional council has recently 1614 been informed that in our view there is no justification on general aviation grounds for further development of the airstrip for air transport purposes at present. However, as I think the House will know, the Government are now considering the whole future of airport development in the United Kingdom in the light of the response to the consultative document on airport strategy in the United Kingdom. The Tayside Regional Council has submitted its views on the matter.
The hon. Gentleman referred to Veeder Root and tachographs. This is a worrying situation that has been raised both by the hon. Gentleman and my hon. Friend the Member for Dundee, West. They will appreciate that there is much difficulty. I am sorry that the company is faced with uncertainty. It might offer very little comfort to the hon. Gentleman and my hon. Friend, but it is a matter that has much concerned me and my colleagues in the Department of Transport. I promise that I shall keep the hon. Gentleman and my hon. Friend closely in touch with the situation and that I shall report to them.
The hon. Gentleman spoke about the general problem of the withdrawal of regional employment subsidy. I have to say that in deciding upon the abolition of REP the Government took into account the premium that is paid automatically to manufacturing establishments. We believe that for the most effective use of our limited resources a move to a more selective system of aid is necessary. Much of the money given out in REP goes to firms that would be competitive without it.
It is surely better to spend the money selectively on schemes such as I mentioned earlier that we know will create investment and thus reduce unemployment. In addition, there is evidence that industrialists—I know this from my personal experience, having spoken to various organisations concerning developments in the region and regional employment grants—consider selective financial assistance towards the capital costs of projects a much more attractive incentive than REP.
The hon. Gentleman naturally raised the problem of the jute industry. I am aware of the general concern felt on Tayside about the level of imports. The 1615 hon. Member for Dundee, East did not raise that matter tonight, but both he and my hon. Friend the Member for Dundee, West have raised it with me from time to time. Measures for preventing abuses have been considered by my right hon. Friend the Secretary of State for Trade. I understand that he is in close touch with the interests concerned about this matter in the city of Dundee and that he will continue to keep a close watch on the situation.
On the last point made by the hon. Member for Dundee, East—a matter constantly brought to my attention by my 1616 hon. Friend the Member for Dundee, West—all is not total gloom. I have seen great improvements in the city of Dundee. It is an attractive place. I understand the problems mentioned by the hon. Member for Dundee, East. However, given an upturn in the economy—there are signs that it is now under way—I believe that Dundee is well placed, with the facilities that it has available and planned, to benefit quickly from the upturn to which we all look forward.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes to One o'clock.