UNEMPLOYMENT (DARLINGTON) (Hansard, 3 April 1978)

§ Mr. Ted Fletcher (Darlington)

I wish to draw the attention of the Minister to a number of matters that are likely to affect the employment situation in Darlington. I say at the outset that I realise that employment prospects are much worse in other part of the North-East, particularly in Sunderland and Hartlepool, but recent developments in my constituency seem to confirm that the unemployment position in the town will deteriorate dramatically in the next two or three months.

At the moment there are 3,703 people unemployed in the Darlington travel-to-work area—a rate of 6.2 per cent. In recent weeks, we have had the announcement that the Darlington Wire Works intends to close its factory. A total of 85 workers have already accepted payments for voluntary redundancy and another 150 will become unemployed in the next few weeks. This is an old established firm which began operations in the town as long ago as 1895 and many generations of Darlington people have worked in the factory.

204 Another old established firm, the Darlington Railway Plant and Foundry Company, has also recently announced that it intends to close its works with the loss of up to a further 200 jobs.

Both firms claim that difficult trading conditions and lack of orders are responsible for the closures. Although this is regrettable, I appreciate that there is little that the Government can do in this situation.

However, a third firm, Abex of Newton Aycliffe, has recently announced that it is to close its factory and dismiss its 160 workers. I believe that this is a case in which the Government could and should intervene. This firm manufactures tyre moulds, and it is the only firm to do so in the whole of the country. These moulds are sold to every tyre-making firm in this country—Dunlop, Pirelli, North British and others. It is a profitable company with a full order book for the next two years. The workers are naturally puzzled about why it is necessary for a profitable firm to close its doors and deprive 160 highly skilled men of their employment.

I have made inquiries. I understand that the board of the American parent company, IC Industries Incorporated, which is controlled by Illinois Central Railways, has sold a similar factory which manufactures tyre moulds in Belgium and that a condition of the sale was that the British factory would be closed in order to eliminate competition. Presumably, all the British tyre manufacturers would have to rely on a Belgian firm in a monopolist position to supply tyre moulds.

I can only presume that the firm has received grants from the Government in the past, because it is in a development area. I think that it is disgraceful that that profitable company should now walk away. That shows the ethics of many multinational companies. They present the ugly face of capitalism to the world. If such companies, which can make a profit, can make an even bigger profit by manipulating contracts and doing business abroad, they will do so by depriving people of jobs.

I hope that it will be possible for the Government to intervene, to bring the 205 utmost pressure to bear upon this company and to keep the factory open. If these efforts are abortive, I hope that the Government will accept that the National Enterprise Board should be asked to explore the possibility of taking over this profitable firm which is doing a vital job in supplying tyre moulds to the whole of the tyre manufacturing industry in this country.

The factory is situated in the constituency of my hon. Friend the Member for Bishop Auckland (Mr. Boyden), although in the main the work force comes from Darlington. I know that my hon. Friend would wish to join me in expressing the hope that the Government will take speedy, effective and energetic action to resolve this matter and to keep the works operating.

I want to turn briefly to the possibility of attracting new firms into the locality. It has been the policy of the Government in the vast to steer new industries to areas of high employment in the region, and I have no complaint about that. This has meant that there are no advance factories, but there is a number of vacant premises formerly occupied by firms like Alexandre Ltd., with 80,000 sq. ft., Lockheed with 58,000 sq. ft. and Minories, with 30,000 sq. ft. Also, the local council has trading estates at Yarm Road and Faverdale, where land is available for new industrial development. The multi-storey office block in the centre of the town, built two years ago, is still waiting for its first tenant. That could provide commercial or clerical employment. The local authority and its officers have been and are doing a first-class job in trying to attract industry, but the accommodation is mostly large factories.

I appeal to the Department to consider creating small flatted factories so that we can attract the small employer, employing perhaps half a dozen to 20 people. These experiments have been tried in Birmingham, for example, and could also be done in Darlington. This cannot be left to the local authority, because these firms are in private hands, but the Government could consider giving companies a financial inducement to fit out their premises in small units. It is not too late to suggest that that could be done in the Budget.

It is outside the scope of the debate to refer to the long-term unemployment 206 which affects the whole nation. I have previously suggested a number of matters, such as early retirement, a shorter working week, import controls, and especially an increase in public expenditure, to help alleviate unemployment. But we must deal with the existing situation.

I hope that the examples which I have given will induce the Minister to consider the problems involved in a town like Darlington. It has by no means the worst unemployment record, but there is concern about whether unemployment will rise over the next few months.

Something else which has a big impact on employment prospects in the North-East and in Darlington and Teesside in particular is the White Paper proposal to make Teesside Airport a category C airport. That will make the attraction of employers—particularly internationally minded employers—very difficult. This first class airport will now be demoted and be able to handle only aircraft with up to 25 seats, catering primarily for local needs. Many multinational companies have been attracted to the area. The oil companies have established headquarters in Darlington and Teesside, many of the products of the oil industry are manufactured in the locality, and a tremendous trade is carried on between Europe and Teesside.

I know that this is not the responsibility of my hon. Friend's Department, but I should give him early warning that there will be a tremendous outcry against categorising Teesside Airport as a C airport, and he can expect opposition not only from the local authorities in the region but from the chambers of commerce, from the organised trade union movement, and, within the next few weeks, from a campaign that is to be mounted to get the Government to change their mind. This will make a significant contribution to the efforts of local authorities and others to attract industry to the region.

I hope that consideration will be given to my points, particularly between new and the end of June. Many of the firms that I have listed as having given notice that they will close their works will finally, having served the statutory notice period, close their doors in June. It is not too late for the Government to do everything possible to attract other industries to Darlington, which is a catchment area 207 for many of the small towns and villages from 20 to 30 miles around. We must avoid drifting into the position where unemployment is not slightly above the national average but, like Sunderland and Hartlepool, double the national average.

It is because we want to safeguard the position of Darlington and increase its employment prospects that I ask the Minister to consider the points that I have made.

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

My hon. Friend the Member for Darlington (Mr. Fletcher) has done his constituency a good service in drawing the attention of my right hon. Friend the Member for Wakefield (Mr. Harrison), whom I am delighted to see here, and myself to the level of unemployment there. My hon. Friend is concerned, as the Government are, with the number of redundancies that have been announced recently.

On the particular case of Abex Engineering Products, I am told by the Department of Industry that the NEB is about to enter into discussions with the management of the company concerning any possible NEB involvement. We shall certainly draw attention of my right hon. and hon. Friends at the Department of Industry to my hon. Friend's plea for flatted factories, and we shall certainly draw the attention of my right hon. and hon. Friends at the Department of Trade to his request in respect of Teesside Airport.

The problems of Darlington are those facing the country as a whole. Unemployment in the Darlington travel-to-work area in March was 6.2 per cent. compared with the national average of 6 per cent., although male unemployment is less in Darlington and female unemployment correspondingly worse than for the country as a whole. In Darlington nearly half the people registered as unemployed are under 30 years of age, and that is a very serious problem.

In March there were 112 unemployed school leavers in the Darlington travel-to-work area, which includes Newton Aycliffe, and 95 in Darlington itself. On youth unemployment, I should tell my hon. Friend that next year we have placed 208 upon the Manpower Services Commission the responsibility to ensure that no Easter or summer school leavers who remain unemployed the following Easter should remain without the offer of a place in the youth opportunities programme.

Already within the Darlington travel-to-work area much advantage has been taken of the Government's special measures. There have been 789 places in the job creation scheme, 257 in work experience, 719 through the youth employment subsidy, and 351 through the recruitment subsidy for school leavers. We hope that similar support will be given to the new area board which will be running the new youth opportunities programme and the special temporary employment programme. We certainly urge upon unions and employers the need to support the programme, particularly in respect of work experience.

Of course, I realise that these are only an alternative, although, I would argue strongly, a very useful alternative, to regular employment. I understand the need to retain jobs, and to increase the number of jobs, particularly in manufacturing. Between June 1966 and June 1976, the total employment in the Darlington employment office area rose by some 2,500 jobs. Service sector employment rose by 3,100 and construction rose by 1,500, whilst manufacturing fell by 1,800 and the primary sector fell by 300.

But the number of extra jobs has not kept pace with the numbers wanting work. This has increased markedly over the last few years—and will continue to do so at the national level by about 170,000 a year. The improvement in the job release scheme will, of course, help to reduce the numbers. Under the present scheme, 208 people in the Darlington travel-to-work area have taken the opportunity which it gives to retire a year early. From this month the scheme is being extended to cover the whole country, and from July the allowance for a married person with a dependent husband or wife will be increased to £35, with the present rate of £26.50 continuing for a single person and for a married person whose spouse has an income of more than £8.50 a week.

But we still need to retain and create jobs. Again the Government's special 209 measures have helped. In the Darlington travel-to-work area 1,235, and in Darlington itself, 1,096, jobs have been maintained by the temporary employment subsidy. Our regret is when firms decide—as they have every right to do—that jobs cannot be saved by this subsidy.

But we have not only to protect but to create manufacturing jobs. Darlington is, of course, already a development area, having the substantial advantages that this brings. Our Northern Region in the middle of last year estimated that between mid-1977 and mid-1979 800 new jobs would be created in Darlington itself.

The extension of the small firms employment subsidy to Darlington on 1st July could help create many more new jobs. Under this scheme a subsidy of £20 a week can be paid for up to 26 weeks where new jobs are created in small manufacturing firms. At present this scheme is confined to special development areas, but from July it will be available in all the assisted areas as well as inner city partnership areas, and for firms with fewer than 200 employees, compared with the present size limit of less than 50 employees.

I certainly think that the small firms employment subsidy will help the expansion of existing industry and so is in line with the Darlington economic study on the industrial structure and employment prospects in Darlington, published a year ago now. I shall not now deal with all of that study but I shall say a word or two about industrial training because I am particularly concerned with the conclusion that there is a need to improve the labour situation in Darlington by more closely relating the output from training facilities to employers' present and future needs. I was disturbed to learn of the difficulty that Carreras Rothman was having in recruiting mechanical fitters.

Although I think a "borough" manpower plan would be too narrowly-based, I must say I was pleased to learn that the MSC's training services division will consider any realistic proposal put for- 210 ward for a local study of training needs commissioned, say, from Durham University. At the same time, I noted from the report that about half the firms in the town have no formal training. To quote from the report, it appears that some employers could themselves be expected to do more than they currently do. Of the 200 or so apprenticeships offered each year by the manufacturers surveyed, half were provided by only three companies. Twelve of the manufacturers apparently took on no apprentices, and nine others took on only one or two. There appears to be no shortage of candidates, since one company alone had 200 applications for 12 vacancies May I add that the Government themselves have committed £41 million to the support of training in industry nationally in the coming year, that is 1978–79. This programme, like those of previous years, should enable employers to maintain their recruitment of apprentices and other longterm trainees despite the recession.

But the report is also critical of the skillcentre, and I do not wish to brush aside the real concern about this. The Manpower Services Commission is undertaking a comprehensive review of its TOPS programme. The Government certainly want to see a fuller use of skill centre facilities.

I have spoken about training because I, too, think it of crucial importance for the future of Darlington. Whilst I recognise the real problems facing the town at the present time, I am not pessimistic about Darlington's future. As the British economy recovers, so, too, will the prosperity of Darlington and our ability to offer everyone there a regular job. That has to be our objective.

I conclude, as I began, by saying that my right hon. Friend the Member for Wakefield and I express our appreciation for the way in which the case for Darlington has been put tonight and that the Government will consider the points that have been made.