HC Deb 05 December 1978 vol 959 cc1383-94

Motion made, and Question proposed.

That this House do now adjourn.—[Mr. Bates.]

10.49 p.m.

Mr. Tim Smith (Ashfield)

I am grateful for the opportunity to raise the question of employment and industry in Hucknall, which is a matter of considerable local importance in the Ashfield district. Perhaps I could start by giving a little background.

The Ashfield constituency consists of three towns—Sutton-in-Ashfield, Kirkby-in-Ashfield and Hucknall.

On a map of Nottinghamshire, it looks as though Hucknall is a part of Greater Nottingham. It looks as though it is a suburb of the city. Furthermore, for planning purposes Hucknall is treated as such, as part of the Greater Nottingham area. It is described in the draft written statement of the Nottinghamshire structure plan as The Ashfield district, part of the outer area of Greater Nottingham. For employment purposes also, Hucknall is treated as part of Greater Nottingham. In fact, it now forms part of the Nottingham travel-to-work area.

For parliamentary elections also, Hucknall was until 1974 part of Nottingham, North. Since then it has been part of the Ashfield constituency. After the next election, it will be moved around again. It is to be shunted off to become part of a new Sherwood constituency. At any rate, that is the proposal at present with the Boundary Commission.

I think that it can be seen from all this that the people in Hucknall do not feel any particular association with the Ash-field district. Indeed, if a person travels out of Nottingham to the north, he observes continuous urban development all the way until he comes to Hucknall and travels through it. Finally, when he reaches the northern boundary of Hucknall, he reaches some countryside. He then drives through three or four miles of green belt until he comes to the towns of Kirkby and Sutton.

It is worth saying all this by way of introduction because it is essental to an understanding of the unease that exists in Hucknall—the feeling of not quite belonging in the Ashfield district. It could be said that all this is quite superficial. However, when one then discovers that Sutton and Kirkby have intermediate area status for the purposes of industrial assistance and that the town of Hucknall does not, one appreciates that the problem is a little more serious.

It is because of this distinction between the three towns that the district council has inevitably met with more success in encouraging new industry to come to Sutton and Kirkby, simply because they have that intermediate area status and are able to offer the incentives that that status gives to industrialists who are seeking new sites.

Sutton and Kirkby have many new engineering and other companies, which have contributed to a welcome diversification and have reduced the traditional dependence of the two towns on mining and textiles. Unemployment in those towns is low. The shortage of skilled labour, on the other hand, is quite acute in some places.

I wish very much that the same could be said of Hucknall, but it has in many ways been a poor relation. In Hucknall unemployment is relatively high. Because it forms part of Greater Nottingham, it is not now possible to say exactly how high the unemployment is, but there is no doubt that it is considerably higher than in the other two towns—although it is true that in Nottinghamshire in general we are better off in this respect than the national average. Nevertheless, unemployment in Hucknall is relatively high and the population is growing. The prospects are not particularly good.

According to the draft structure plan, Hucknall has limited prospects for employment growth. The report of a survey which was conducted by the district council prior to the production of its draft district plan noted that There is a heavy dependence on coal mining and Rolls-Royce for male employment, and textiles and clothing for female employment. It follows from this that in Hucknall, as in the other two towns, diversification of industry is absolutely essential for the future.

The report to which I have referred also commented that local authorities are restricted in the degree to which they can influence the local level of employment. The performance of Hucknall's economy … is to a large degree dependent upon the overall state of the national economy and upon decisions made by a range of commercial, industrial and governmental organisations. Obviously, that is stating the obvious. Nobody is suggesting that local authorities can create wealth or jobs, but it seems to me that in the same way as a Government can create the conditions in which output and employment can improve, so a local authority can assist or hinder a local economy.

In this respect, it is my view that the Ashfield district council is failing in its duty to Hucknall. Small enterprises in the district are looking for small industrial units; larger enterprises, perhaps, want to move premises in order to expand and are looking for slightly larger units in which they can grow. In my opinion all the reports that the district council has produced to date are complacent about unemployment. For example, one says Unemployment… is not a significant factor in Hucknall. Unemployed school leavers in Hucknall will be glad to know that that is the attitude of the district council.

There is another example of complacency in the reports to which I have referred, and that is in regard to the Kodak works which are due to open early next year at Annesley Woodhouse, which is just north of Hucknall. The works are expected to employ about 4,000 people in the longer term, and obviously a proportion of these will come from Hucknall. The district plan makes the assumption that a proportion will come from Hucknall, but it does not say how many.

As such a large number of people are involved, it seems to me that it is not possible to assess the remaining proposals unless the plan is more precise. The proposal is extremely long-term because only 200 people are expected to be employed there initially, and it has in mind a 25-year plan. It is complacent to rely on such a plan. The remaining proposals are that 48 acres of land will be allocated for industrial purposes over an 18-year period from now until 1996.

Two county and district councillors who represent Hucknall, Councillors Morley and Parker, have been trying to persuade both authorities to give a little more priority to the district. The county council, to which I have written, assures me that there are a number of negotiations in hand which, if successful, will offer much brighter prospects for the town. In particular, the council mentions that schemes under discussion could result in the construction of advance factories and unit workshops. The district council policy is based on the draft plan, and I do not think I need say more about that.

In August this year Councillors Morley and Parker wrote to the Department of Industry about this matter. They said that in their opinion the anomaly is that Hucknall, although incorporated in the Ashfield district since 1974, does not have the intermediate area status of the remainder of Ashfield. It is the only non-intermediate pocket north and north-west of the city of Nottingham, and consequently it is at a disadvantage in attracting industry. In effect, the councillors were saying that the inclusion of Hucknall in the intermediate zone would not be an extension of that zone but rather a way of making the whole of Ashfield attractive to industry. Thus, they said,there is a strong case for giving intermediate area status to the district. In support, they sent the July report of the district careers officer, which underlined the difficulties facing Hucknall school leavers compared with those in Sutton and Kirkby.

The hon. Member for Keighley (Mr. Cryer), who was at that time Under-Secretary of State for Industry, replied that the decision to designate Hucknall as an intermediate area would not be justified. Predictably, he blamed the worst world economic recession since the 1930s, and then referred to the Government's special measures to stimulate investment and alleviate unemployment. This, he said, could benefit Hucknall directly.

These measures could also damage Hucknall directly. It depends entirely on the direction that they take. Let me give an example in Hucknall of a company, Intermotor Ltd., which employes over 200 people and is in the business of manufacturing motor car spares. In 1970 it employed 10 people. It now employs 200 people, which gives an idea of its growth rate. The expansion in those eight years has been achieved through retained profits. As far as I am aware, the Government have contributed nothing to the growth of that company. As well as employing 200 people in Hucknall, the company assists the United Kingdom's balance of payments both by exporting and by import substitution.

On the other hand, in Lancashire there is an American-owned company—a competitor of the company to which I have referred—which is inefficient and loss-making. Recently—I think in September —that company announced that it would be closing in March. Immediately, those who were involved with the company rushed to the Department for assistance. I do not blame them for doing that. As long as that kind of assistance is available, that is clearly the right course of action. I have no idea what attitude the Department of Industry proposes to take towards that company—I do not intend to name it in the debate—but the chairman of Intermotor Ltd. wrote to me saying that, if it were granted, it could mean that subsidised employment and products at Blackburn may lead to unemployment at Hucknall…Such a form of subsidy will be only to the detriment of Intermotor Ltd, who are a well run and profitable small company with hard-working and loyal employees. I have no doubt that Government policy in this area is well intentioned, but in some respects I consider it to be misconceived. Why on earth subsidise a badly run and unprofitable company at the expense of a well run and profitable company? It seems to be a short-term palliative that is a long-term recipe for disaster.

So much for Government policy in this area. I am not convinced that the Govern-men's overall economic strategy will assist Hucknall.

Perhaps I may return to the Ashfield council's attitude. I believe that it is equally well-intentioned but that it is complacent. It is complacent because, as long as Sutton and Kirkby have intermediate status and Hucknall has not, it should make a conscious effort to ensure that Hucknall does not suffer in the process. Hucknall is too dependent on coal-mining, textiles and Rolls-Royce. It requires a diversification of industry and of employment. But industry will come to Hucknall only if sites are made available.

That takes me back to what I said earlier. There is no way in which a local authority can create jobs or wealth, but it can create the conditions that will attract industrialists to the district. At the moment industrialists who want to open new plans and factories in the district are going elsewhere because of the lack of suitable sites. The obligation on the district authority is to make available suitable sites. Only the district and the county council can do so. I believe that they should do so as a matter of urgency.

11.3 p.m.

The Under-Secretary of State for Industry (Mr. Les Huckheld)

As is his right, the hon. Member for Ashfield (Mr. Smith) has drawn attention to the industrial and employment position in Hucknall. To sum up what he said, I can only say that I found it rather stronger on feeling than on fact.

The hon. Gentleman will recall that my hon. Friend the Member for Keighley (Mr. Cryer), the then Under-Secretary of State, recently gave serious consideration to the representations which he had received from three members of the Nottinghamshire county council and the Ash-field district council for intermediate area status for Hucknall. I am sure that the hon. Gentleman has seen the reply that my hon. Friend sent to them. Indeed, I shall repeat some of the points made by him.

Before doing so, I should like to sketch in the background to what I am about to say, and particularly to put in some of the figures that the hon. Gentleman chose to omit.

It is true that regional policy has to give priority to the area of highest and most persistent unemployment. For example, Merseyside has a current unemployment rate of 11.5 per cent. There are 86,685 people without jobs on Merseyside.

My right hon. Friend the Member for Sunderland, North (Mr. Willey), who recently had a Private Member's motion on the subject, told of the situation in his constituency. There are problems also in Scotland and Wales. It is because these tend to be the areas of highest and persistent unemployment that the Government have rightly given priority to them.

The hon. Gentleman said that my hon. Friend had told him that frequent changes in the Department's view of its regional policy would not assist investors to remain confident in those policies. To ensure this confidence, which stems from continuity, we are reluctant to make significant changes to the assisted area boundaries unless as part of any future general review.

We are going through perhaps the worst economic recession since the 1930s and we believe that it is better to leave the present pattern of assisted and intermediate areas until at least the economy picks up and the upturn comes. We also have major structural problems in the economy, with which regional policy of itself will not deal. We have other measures for dealing with them.

The coverage of the assisted areas is already extensive; they cover 40 per cent. of the population and 65 per cent. of the land area. The more extensive the coverage, the less effective the status is for those areas which already have it. I am sure that the hon. Gentleman does not support increased Government expenditure. If we give this status to a new area without taking it from another area, we shall increase public expenditure. I am sure that he will consider that when the time comes for such a choice.

The hon. Member paid eloquent tribute to the success of our assisted area policy. When Sutton-in-Ashfield was designated an intermediate area in March 1970, its unemployment rate was 3.5 per cent.; that in Hucknall was 2.8 per cent.; and in the country as a whole is was 2.6 per cent. The fact that Sutton-in-Ashfield is in a better position now is testimony to the effectiveness of our regional policies.

If the hon. Gentleman thinks that Hucknall has a case for intermediate area status, what does he think of Telford, with an unemployment rate of 7.9 per cent., Sheerness, with 9.6 per cent., Whitby, with 9.8 per cent., and Bristol, Corby and Swindon, which have recently applied and which all have more serious unemployment than Hucknall? Those are the comparisons that we have to make when we receive these applications.

The hon. Gentleman referred to the differences in local authority designations between those parts of the area which came under Nottingham for many pur- poses and those which did not. He made a strong case for Hucknall being treated as an essential part of the Nottingham travel-to-work area. In many of these respects it is treated as such. Both the hon. Gentleman and I know of cases in which the local authority boundary does not coincide with the travel-to-work boundary.

Certainly, if we were to have employment areas coincident with local authority areas, there would be many complications. I am glad that the hon. Member testified to the fact that Hucknall is very much a part of Nottingham, because I shall give him some figures to show that the area around Nottingham has certainly benefited from my Department's policies.

Under the Industry Act the Department has given assistance to a total of 46 projects in the Nottingham travel-to-work area, which includes Hucknall. They have been offered assistance worth nearly £2.8 million towards total estimated investment of more than £18.2 million. That represents a significant amount of industrial investment.

Since 1974, no industrial development certificates have been refused—I know that there is a great mythology on the Conservative Benches about IDCs—and a total of 109 have been issued for more than 3.6 million sq. ft. of floor space. We expect that these developments will lead ultimately to the creation of nearly 2,850 new jobs. One of the IDCs was issued four months ago to a development in Hucknall. When completed it is expected to employ 120 people. If all those jobs went to local inhabitants, this would reduce significantly the number of unemployed. In November, 528 people were out of work in Hucknall. Thus, the figure could be reduced by about 20 per cent.

These are examples of Industry Act assistance benefiting the areas for which the hon. Member has been pleading tonight.

I am glad that the hon. Member mentioned the Kodak project, at Annesley Woodhouse and that ultimately it could employ 4,000 people, because that, too, will benefit his constituency. I understand that the first 63 people will be recruited by February and 100 more by the summer. This must be a welcome prospect for his area.

In addition, there are the temporary employment measures of the Department of Employment. These schemes have already assisted more than 11,500 people in the Nottingham area. They include schemes aimed specifically at school leavers, particularly as part of the youth opportunities programme.

Then, of course, there is the small firms employment subsidy. From 1st January 1979 this will be extended to the whole country. This offers a £20 a week subsidy to manufacturing firms in the private sector with fewer than 200 employees on 9th November 1978, for up to six months. In fact, the firm that the hon. Member described as not benefiting from any of my Department's policies might be eligible for that subsidy. He should ask the firm to have a look at it.

It is because priority is given to areas of highest unemployment that firms in these areas naturally will have recourse to other measures of financial assistance. The hon. Member will recognise, however, that my Department operates a small firms information service and a counselling service, and recently the Government announced more flexibility for local authorities—particularly district councils—in the operation of local industrial development certificates.

I can only say that the hon. Member made a better case than I could have done tonight for treating Hucknall as part of Nottingham. He said that the two were contiguous. The figures that I have given for the Nottingham travel-to-work area show that his constituency, including Hucknall, has benefited from the assistance given to the Nottingham travel-to-work area.

The hon. Member has put a case tonight that was stronger on feeling than on figures. He must realise that he not only has to convince me of that case—he has to convince his own Front Bench as well. It is our understanding that if the Conservative Party came to power—God forbid—it would do its best to wind down most of the regional incentives and regional policy that my Department has set in being. The hon. Member for Pembroke (Mr. Edwards) said, at the Welsh Conservative conference this year, that it is his policy and that of his right hon. Frends—this is our understanding—to reduce the number of assisted areas. I hope that the hon. Gentleman will have a word with some of his Front Bench colleagues.

It it our understanding that it is the policy of the hon. Gentleman's party to cut spending on regional development grants. According to recent reports in newspapers such as the Financial Times, the Conservatives would cut such spending by between £200 million and £300 million. If the dilution of grants and the reduction of the number of assisted areas is the policy of the hon. Gentleman's party, I wonder why he pleads for his constituency to be upgraded so that another part becomes part of an assisted area.

If the hon. Gentleman wants to talk about the policy of his party, I can only refer him to the policy that has been enunciated, adumbrated and repeated throughout the country by his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph). In the debate on employment that took place in July, the right hon. Gentleman said: In aggregate, we believe that these subsidies and grants do more harm than good. The right hon. Gentleman went on to say: We believe that subsidies and grants and, indeed, the industrial strategy, distract management and workers. He added: Anyway, these grants and subsidies may rescue some jobs but only at the cost of other jobs. On the next page the right hon. Gentleman continued: No party should be able to justify from the unique occasion of Rolls-Royce the panoply of grants, subsidies and rescues that have been going on."—[Official Report, 4th July 1978; Vol. 953, c. 255–258.] I am glad that the right hon. Gentleman mentioned Rolls-Royce.

Those are the policies of the Conservative Party. Those would be the sort of policies that his party would carry out. I can only refer the hon. Gentleman to what my Department has already done in his constituency. I hope that the hon. Gentleman will at least reflect on that.

Mr. Tim Smith

The argument that I was advancing was also advanced by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph). It is possible to subsidise one company and to preserve jobs while at the same time jobs are lost elsewhere. That is what is being threatened in my constituency. That is not a policy that I would support. To encourage profitable industry to come into an area by giving it intermediate status is another matter. There is a distinction to be drawn between profitable and unprofitable companies.

Mr. Huckfield

I have already mentioned the benefits that have accrued to the hon. Gentleman's constituents, es- pecially those in Hucknall, under the policies of my Department and the Department of Employment. I hope that the hon. Gentleman will put it fairly and clearly to his constituents so that they may compare the records of my Department and the Department of Employment under the Labour Government with the future that his constituents would have under any policies that the hon. Gentleman's party put into effect.

Question put and agreed to.

Adjourned accordingly at eighteen minutes past Eleven o'clock.