NEWPORT (DEVELOPMENT AREA STATUS) (Hansard, 20 June 1977)

§ Mr. Roy Hughes (Newport)

I welcome the opportunity to raise the need for development area status for Newport, even though the hour is late. My first and basic point is that the present development area boundaries are grossly unfair to Newport. Only a small area of Wales is not included in the development area 1060 —the coastal resorts in North Wales and what one might call the Wye Valley in Gwent. One does not associate those areas with industrial development.

The area in South Gwent which is represented largely by Newport is the only industrial area that does not enjoy development area status.

The situation for Newport has deteriorated considerably in recent years. I raised the issue on 6th October 1974 when I was told by the then Minister of State that a close watch would be kept on the situation in Newport and that he and the Government were prepared to be flexible. He said: If we become convinced of the need for further changes in the boundaries we shall not hesitate to take action."—[Official Report, 6th November 1974; Vol. 880, c. 1214.] I am still waiting for this action for Newport. Newport Corporation, the Gwent County Council and the people of that county, particularly those who are unemployed, are still waiting for action.

I raised the matter on that occasion because of the announcement in August 1974 of Cardiff's inclusion in the development area. Over the years there has been considerable rivalry between these two towns, not least on the rugby field, but certainly in regard to industrial development. The announcement therefore came as a great shock to Newport, particularly since it is now encircled by towns and villages enjoying development area status—Cardiff on one side and the mining valleys of Gwent on the other.

What further evidence is needed to justify Newport's inclusion? Facts have been supplied over the months and years. It is on a par with Cardiff in terms of unemployment. There has been a wrangle over the dispersal of several thousand defence jobs from London. The Welsh Office has twisted and turned in every way to ensure that they went to Cardiff, although the staff were anxious to go to the admirable site of Tredegar Park in Newport. The matter is still in the melting-pot. Because of the recent public expenditure cuts, this costly project will probably not now go ahead, but if the staff's agreement at the time had been accepted, it might by now have been well under way.

Presumably the decision to give Cardiff development area status was based on the 1061 supposed forthcoming closure of East Moors steel works, but that closure is now in the melting-pot again, at least until 1980. Cardiff has numerous advantages as a capital city, as its rateable values testify. Relatively, it is more prosperous than Newport. Under the present arrangements, therefore, Newport is at a distinct disadvantage.

On 14th April this year, the Government announced that Shotton in North Wales and Humberside were to be given development area status. Before the announcement, why was not Newport Corporation alerted to the fact that these matters were again in the melting-pot? New evidence could have been brought forward to advance Newport's case. But, again, it was a bolt from the blue.

There is a further dilemma in that the possible inclusion of Humberside could be highly detrimental to Newport. There is a certain project—an industrial development proposed by an international consortium that wants to establish a factory somewhere in the United Kingdom to make insulating material. It was apparently considering Newport. I have not been concerned with the intimate negotiations, but I have a letter dated 5th May from the chief executive of the Newport council—a man who is very experienced in these matters. He says: The problems besetting Newport are well illustrated by the following case. Over the last two years an international consortium has been carrying out an intensive survey throughout the United Kingdom into setting up a factory to produce insulating materials. The factory would employ 350 people and occupy a 30-acre site. After long negotiations we were very optimistic that the consortium would settle on the Reevesland Industrial Estate at Newport. The major factor was its easy access to the motorway which would ensure that the company's vehicles could deliver its products to its major distributors in the South-East and West Midlands and return in the same day. However, because Humberside, an Intermediate area, like Newport until recently, has just been granted Development Area Status, the consortium is now likely to establish the proposed factory there. This is the observation of the chief executive of the Newport council about a project that could be very advantageous to South Wales as a whole.

Many of these jobs would go to people in towns and villages such as Crosskeys, Blackwood and Abercarn, towns that are already in the development area, and 1062 areas that have always been very loyal to Labour. Are they to be told that their people can remain on the dole because the Labour Government are not prepared to give development area status to the area where this factory could be sited?

I remind the Government that each day 20,000 people travel down from the valleys to work in Newport. Following local government reorganisation, the whole issue of industrial development no longer rests solely in the hands of the Newport council. It is partly the responsibility of the Gwent County Council. Mr. Gordon Probert, the county planning officer for that authority, has pointed out recently in a report that Gwent will require 30,000 new jobs in the next 15 years. So many of the unemployment problems of the mining valleys of Gwent could be solved by Newport, if it were given the right Government backing to which it is entitled.

People in Gwent are coming to the conclusion that everything is going West—in the Welsh sense. First, there was the announcement a few weeks ago that no less than £850 million was to be invested in the steel works at Port Talbot. The mind boggles at such a figure. Yet the unemployment in the town and in the surrounding area is roughly comparable with that of Newport, and has been over the years, as the employment statistics bear out. There is no justification for Port Talbot being in the development area and Newport not being in it.

Further along the coast, in Llanelli, the employment situation over the years has been superior to that in Newport. We have never received a straight answer when we have asked why Port Talbot and Llanelli are in the development area but Newport is not. There is no rhyme or reason to it.

Newport has had more than its share of industrial difficulties. We had the closure of the tube works, with a loss of 1,500 jobs; the closure of the British Aluminium factory, with a loss of 450 jobs; and the loss of the iron ore trade in the docks. Now there is a new list of smaller establishments on the closure list—half of the Whitehead works now owned by the British Steel Corporation; the pipe mill at Llanwem; Westing-house; Connor and Davies; and the bus depot, with a loss of 60 jobs to the town.

1063 Newport has the motorway, but it has not prevented closures over the years. As to expenditure on major road projects in Wales, the development along the coast to West Wales—the M4—has scooped the pool. I have the official document "Roads and Transport Document, Wales", which lists schemes costing over £250,000. I do not see any mention of Gwent in the whole of this sheet. The vast bulk of the expenditure is going on the M4 extension, but even in the trunk road schemes there is no mention of Newport, let alone Gwent as a whole.

Ebbw Vale is suffering thousands of redundancies. Roads are badly needed up there. Road works at Aberbeeg, the Risca bypass and the Cwmbran bypass should receive high priority, yet Gwent is well back in the queue.

There has even been an allegation recently that Gwent County Council has had to take money earmarked as a subsidy for public transport to keep up road maintenance and perhaps some minor new works. If we had a Welsh Assembly, the Gwent representatives would have something to say about the situation. I cannot believe that in these matters the Welsh Office is giving Newport and Gwent the backing we should be receiving. After all, 20 per cent, of the people of Wales live in Gwent. South Wales should be treated as a single industrial entity. It is grossly unfair to isolate Newport, the only industrial part of South Wales not in the development area.

I repeat that all the evidence points to the fact that Newport is being discriminated against and has been discriminated against in recent years. This in turn is detrimental to job opportunities, not only for Newport but for the valleys of Gwent as well. The vast bulk of investment, both industrial and for roads, is going West. It is time that the whole of Gwent woke up and realised what was happening.

The Minister is a fair-minded man. All that we are asking for is a bit of fair play. Let us have a bit of Welsh chwara-teg.

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

First, I thank my hon. Friend the Member for Newport (Mr. Hughes) for giving us the opportunity for this discussion. I know 1064 from looking at Hansard how vigorously he has fought over the years for his constituency. The issue to which he has returned tonight is one about which he genuinely feels very strongly and one that he puts forward sincerely.

I should like to make certain basic points to my hon. Friend. The first thing to remember about the objective of regional policy is that it is not intended to deal with the unemployment caused by recession. It is intended to deal with underlying structural unemployment. One of the difficulties that have confronted the Government when we have had to consider our scheduling of areas has been to assess how far the needs and difficulties of the areas in the worst economic recession the Western world has known since the war are because of a deep-seated underlying malaise and how far they are a reflection of what we hope is a temporary recession which will gradually abate and then leave the areas with far more normal levels of unemployment. That is the first consideration—whether it is a long-standing structural difficulty from which an area suffers.

A further point that we must bear in mind is that assisted areas are already extensive, as my hon. Friend has intimated in relation to Wales. Forty-three per cent, of all employees and 65 per cent, of land area already come within assisted areas. About half the employees in assisted areas are in the special development and development areas. I know that my hon. Friend will accept, even if not in relation to his own constituency, that the more one extends the boundaries without compensatory cutback of the boundaries elsewhere, the more one dilutes the assistance that is going to areas of need. Therefore, in considering any extension of boundaries one must bear in mind its impact on other areas which are already scheduled and which may have greater need.

I fully appreciate the point which my hon. Friend rightly made about Newport as a focal point in commuting terms. Equally, as he and I are very familiar with the Gwent valleys, for reasons of family background, I know that he will accept the counter-point that can be made. He said that we should give the status to Newport because Newport would then provide jobs for the valleys. It could well be that those representing 1065 the valley constituencies would say in response "Give this status to Newport and it diminishes the opportunities of the valley communities to attract the industry that they need within their own boundaries". It is an argument which can be made either way.

My hon. Friend asked why Newport was not alerted to the fact that the recent changes were being contemplated, so that it had the opportunity to present new information. I assure my hon. Friend that no authorities were specially alerted. So many have applied for development area status over the years that it would have been administratively impossible to cope with the bus-loads of deputations that would have beaten a track to the Department's door, only to repeat points that were known to the Government anyway.

Furthermore, we had indicated on more than one occasion that regional policy was under continuous review. That is still so. I am to see two deputations tomorrow, and I saw several last week from authorities that feel they should be upgraded. My hon. Friend is welcome to bring a deputation should he wish. He can then make his case in more detail than is possible in 15 minutes.

My hon. Friend asked, "Why not do some downgrading in Wales?" That is for him to assess. I looked at the employment situation there and felt that, in present circumstances, I would not be justified in any downgrading. But I did downgrade certain areas in, for example, North Yorkshire and Scotland.

The fact that certain areas were not included in the recent announcement and were invited separately to submit representations did not mean that they were not considered. Officials of various Departments carry out a detailed analysis of the situation in all areas which conceivably could merit a change in designation, be it a change to a higher or to a lower grading. All the areas which were in contention were looked at and considered even before the matter reached Ministers.

When making changes, we have to bear in mind statutory requirements. Under the legal situation, the Secretary of State has to have regard to all the circumstances, actual and expected, in- 1066 cluding the state of employment and unemployment. Unemployment is a factor, but it is not the sole factor. Present unemployment is a factor, but possible trends in the future also have to be taken into account.

I want to draw attention to certain favourable things which have happened in my hon. Friend's constituency, be cause, rightly, he listed certain disadvantages from which it has suffered. We have to bear in mind, to begin with, that the move by the Government towards greater selectivity in the use of support to industry is a favourable trend in Newport. Under our industry schemes, for example, Newport is eligible for the same level of grant as in other development areas. Six firms which have received grants under the ferrous foundry scheme have received them on the same basis as firms in development areas.

In addition, Newport still remains eligible for regional development grants for building for advanced factories, and for regional selective assistance, and the Welsh Development Agency and the European Regional Development Fund are also sources available to Newport.

Under Section 7 powers—regional selective assistance—offers valued at £1,250,000 have been made for 11 projects in Newport, involving a total expenditure of £28 million, and these are expected to create or safeguard 1,600 jobs. A Government advance factory has been built at Rogerstone and has been provisionally allocated. We hope that the jobs will arise from it within the next two years. The Welsh Development Agency in March announced its first major venture in investment, a loan of £150,000 to N. Mole & Sons Limited, the tool-making company, to enable it to purchase new plant and to provide working capital. Furthermore, the WDA is proposing to undertake two land reclamation schemes in the constituency.

The European Regional Development Fund has supported three infrastructure projects, two in relation to the provision of industrial estates and the third in relation to the supply of electricity to industry. Under Section 8, the national scheme for financial support, three offers totalling £79,000 have been made to projects in Newport under the ferrous foundry scheme. Since 1975, six industrial development certificates have been 1067 approved for Newport, giving a total of about 650,000 square feet of extra factory space.

Our estimate is that approximately 1,600 manufacturing jobs are in the pipeline for Newport in addition to the jobs which Newport will obtain as a result of Government dispersal. My hon. Friend will accept that, although St. Mellons may not be in Newport, it is accessible as an employment centre to people from Newport.