HC Deb 25 January 1978 vol 942 cc1556-67

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

11.32 p.m.

Mr. David Penhaligon (Truro)

After what must be the most effective speech in this House by a Liberal Member for many years, I hope that my contribution, which will be somewhat longer, will have the same effect on the problem that I wish to raise for my constituents.

The question I wish to raise is unemployment in Cornwall. Cornwall, contrary to the image very often displayed in the newspapers, is the part of this great world where the Industrial Revolution started. Engineering developments there such as the beam engine were very much the start of the Industrial Revolution.

The trouble is that Cornwall is also the first place where the Industrial Revolution ended. It has more industrial wasteland than any other county in the United Kingdom. It has suffered from unemployment for a long time. I have sat here many times listening ironically to other hon. Members complaining about 6 per cent. unemployment in their areas, for we have long regarded 6 per cent. as a problem solved. Cornwall's unemployment is 12.5 per cent. It is 14.7 per cent. for men. There are 16,840 men and women registered as unemployed in an area as small as Cornwall.

Cornwall has the highest rate of unemployment of any county in Great Britain. There are only two special development areas that can boast, if that is the right word, of a greater percentage, and they are North-West Wales and Girvan. In a recent parliamentary Question. I asked the appropriate Minister to list the 20 employment exchanges in the United Kingdom with the highest level of unemployment. It gives me no pleasure to tell the House that Cornwall had six of those exchanges and England had just four. This is a tremendous problem.

Let me give some of the figures applying to Cornwall. The figure of unemployment in St. Ives is 20 per cent., in Helston 20 per cent., Newquay 15 per cent., Camelford 15 per cent., Penzance 14 per cent.. Falmouth 14 per cent. and Wadebridge 13½ per cent. In my constituency, which by Cornish standards is a bright spot in employment terms, there are 1,607 unemployed in the city of Truro and 1,680 unemployed in St. Austell Town. Even in the summer, unemployment in Cornwall is higher than in many special development areas. Statistics which I have seen show that many of the unemployed have been in that situation for more than six months. It is a well-known fact that many of the women who have been unemployed have given up the struggle to obtain employment. Therefore, the figures show the situation in a better light than it actually is.

It was a Labour Government who in the 1960s introduced development area status. This move was much appreciated in my county. Since that time, the situation has been steadily eroded. More special development areas and intermediate areas have been created and there has been a relaxation in the controls in the more prosperous areas. There has been a change of emphasis which has moved help away from the regions in order to give help to particular industries. In that group are Chrysler, British Leyland and British Steel, all of which have received massive amounts of Government money but not all of which are in development areas.

In addition, we have lost the regional employment premium. This has been a dire loss in Cornwall since it is an area where many jobs are labour-intensive. Furthermore, we have also lost regional development grants for mining. I do not see any logical reason for this loss. Meanwhile, the present approach to Cornwall's problems hardly gives any great optimism for the future. There is a good deal of anger in the area at the fact that 12 fishing boats from the Eastern bloc are taking 600 tons a day of mackerel from the Scottish and North of England purse seiners. Those boats have fished out their own waters and have come to Cornwall to fish out ours. There is no doubt that, if controls are not put on the situation soon, the Cornish fishing industry will go down the pan.

We in Cornwall continue to suffer from job centralisation. There has been a centralisation of brain but a decentralisation of brawn. The vehicle licensing operations are now at Swansea, the South Western Water Authority is situated in Exeter, the South Western Economic Planning Group is at Bristol and our road system is planned from Exeter. The Department of Industry operates from Plymouth, Cardiff and Bristol—it is difficult to follow what goes on in those three cities—but none is based in Cornwall. There is now a threat that the Post Office's mechanised sorting operations will mean that further jobs will be stolen from Cornwall as all detailed sorting of mail will be done in Plymouth. The stealing of jobs from Cornwall by other parts of the country is not acceptable.

I suspect that the reason why we have not attracted much attention in the House is that we have not had the massive bankruptcies that hon. Members are used to. That is hardly surprising since there are only 18 companies in Cornwall which employ more than 500 people. We have a small-firm economy. These figures exclude agriculture, but 52 per cent. of those working in industries in Cornwall work for firms employing fewer than 50 people. The figure for Great Britain is 33 per cent.

Of the various schemes operating in some parts of the country, the small firms employment subsidy could do more for Cornwall than any other. It gives £20 a week for six months for every new job created. It is tailor-made for an economy such as that in Cornwall and could do a great deal of good. Will the Minister consider including agriculture within the scope of the subsidy? I do not see why agriculture and industry should be treated differently. The manufacturing of car wheels and the growing of turnips are both adding value to a basic entity.

The construction industry has been one of the backbones of employment in Cornwall. In 1973, it reached ludicrous levels. If construction had been maintained at that year's level of activity, the whole of Cornwall would eventually be a concrete jungle. Those who manufactured the great building boom of 1973 have much to answer for. It attracted numerous people to Cornwall, and they came under the illusion that there would always be full-time employment for them—when, obviously, there would not.

It is incredible that we can write to Ministers and put down Questions, as my hon. Friend the Member for Cornwall, North (Mr. Pardoe) did recently, asking how much of the £400 million voted to the construction industry will be coming to Cornwall and get no answer. Apparently, Ministers have no idea and they shown no great interest. The Government can produce figures for Scotland. The mechanism ought to exist to enable them to produce figures for Cornwall. We should like to know how much of the £400 million will be coming to us.

The National Enterprise Board exists in every development area except Cornwall. Every other development area has its own board or a regional office. Cornwall does not even have an office in Plymouth—which is where such offices are usually located. Why is that?

Probably the greatest reflection of our unemployment problem is the low wage structure. Wages in private industry are at least £15 a week below the national average, and until the employment problem is put right it is unlikely that any real effective action can be taken on the low wage problem. I recognise the background of economic difficulties that the country has faced in the past 12 or 18 months, and I am proud that some of the efforts of my right hon. and hon. Friends may have helped towards the upturn that we are now seeing. There is spare money around, and now is the time to put it into unemployment areas such as Cornwall.

We should like special development area status, and if we cannot get that we should like at least the small firms employment subsidy. I also urge the Minister to consider extending that scheme to agriculture. One further attraction of special development area status is that many firms in Cornwall would qualify for grants, because standards of size are lower. They do not qualify while the county has only development area status. I have explained already how much Cornwall depends on these small companies for employment.

We would like the advance factory procedure simplified. I must admit that at times I would not mind if someone explained it to me. But certainly we would like it simplified. It takes far too long. The local people in Cornwall feel that they are discriminated against, and I have pursued one or two cases on their behalf.

The real question is why there is no industry department in Cornwall. If the Plymouth office is set up mainly to service the development area in Cornwall, why is not it in the county?

The job release scheme could be improved greatly if a larger sum could be offered to those who wish to retire early. But will it be renewed, and what will be the effects of this in Cornwall? I know that it has been of some use.

Real action is required to help fishing. I cannot emphasise too much that, unless early and dramatic action is taken, there will be no mackerel fishing in Cornwall, and we shall have two and three-year bans on mackerel-fishing, as exist in Scotland for herring, and those engaged in it in the county will be crushed and put out of business.

We ought to have more information about the construction industry.

I put those five factors to the Minister, but most of all I wish to put to him the social problem. I am very much a born Cornishman, as hon. Members will have guessed. The problem is severe. When a young man comes into my surgery, as often happens, asking me for advice on the career that he should pursue, it gives me no pleasure to have to tell him, as one Cornishman to another, "Young man, if you want a career, you had better go to England". For a short while it was not necessary to say that, but the problem is now back with a vengeance. Our youngsters are making good use of the various schemes which are available, but there is not the sort of training and permanence of employment which many of us desire to give them.

I have met hundreds of men who have reached the age of 50 and who have given up all hope of being employed. Twelve months of effort seems to have convinced them that at the age of 50 they are beyond any useful occupation. That is not satisfactory.

In Cornwall I have criticised the county council often enough, and no doubt when I am in Cornwall I shall continue to do so. After all, that is the best place to do it. But it is improving, and I take some credit for the fact that my nagging has caused that improvement. I am hoping tonight that my nagging in this debate may cause some improvement in this House. Can the Minister look forward to greater help for Cornwall? Does he recognise how serious the problem is in Cornwall? Can he assure us that some of the schemes that I have outlined will receive urgent attention? I believe that they are the minimum required to save Cornwall from reaching the 15 per cent. unemployment level that I have been predicting year after year.

11.47 p.m.

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

The hon. Member for Truro (Mr. Penhaligon) has rightly spoken with passion about the problem of unemployment in Cornwall, and I begin by giving him the assurance that we recognise the problem and that we shall take notice of what he said about the extension of schemes to see whether we can help towards its solution.

The Government share the hon. Gentleman's concern. The figures are frightening. In Cornwall as a whole, in January there was an unemployment rate of 12.5 per cent. and, as the hon. Member says, the male unemployment rate was 14.7 per cent. Even at the height of the summer season, in August, the figures were 10 per cent. and for males 12.4 per cent. and the figures for youth unemployment are also very bad. This month, there were still 2,478 young people unemployed in Cornwall, 374 of them school leavers.

Cornwall is suffering from the present world recession, but the recession, however harmful, cannot be the only explanation of the very high figures. Nor is the unemployment entirely seasonal, although this factor is important, otherwise the figures for August would not be so high. A 10 per cent. level of unemployment in August cannot he dismissed as being due to the recession or seasonal factors. The Government have no intention of so dismissing it.

Nor—although it is a small factor—can we claim that a major cause of the problem is that occupational pensioners are going to live in Cornwall and registering as unemployed. It could be that many of the unemployed are much younger people who have travelled to Cornwall in search of work and have preferred to be unemployed there than elsewhere. Certainly no one can blame them if that is true, although the Department has no evidence to prove or disprove it. In any case, if it were true, there is nothing we could do about it, because people must be free to live and work where they wish. What we must try to achieve is jobs for Cornish people, particularly the youngsters who wish to work in Cornwall.

In my maiden speech I expressed concern that the bright young people of North Staffordshire had to leave their home area to find suitable careers, so I understand and sympathise with the hon. Gentleman's demand for Cornish people the right to obtain good jobs with good pay and prospects in their own locality.

I also understand the strength with which the hon. Gentleman defends Cornwall against Whitehall, and I shall try to respond tonight with all the understanding that a provincial Member can bring, although I must say that every locality I visit believes itself to be the most neglected. That includes parts of London which themselves face enormous problems.

We do want the young and adults of Cornwall to have regular jobs and I shall try to help in the creation of those jobs. In the meantime, we want Cornwall to keep taking advantage of the Government's special measures. I note what the hon. Gentleman said about the job release scheme, although I had hoped that even more advantage would have been taken of it than has been taken so far. I appreciate the argument that can be advanced about the level of the payment. Nearly 8,000 people in Cornwall have benefited from the Government's special measures so far, but there is still scope for much greater effort on the part of employers, particularly as regards the schemes for young people.

I very much enjoyed visiting Truro Garages with the hon. Gentleman last year to see its successful work experience scheme, which has helped a number of young people. I was particularly glad to hear that four of the youngsters concerned have since been offered permanent jobs by the company.

On the same visit we saw the Probus village hall job creation project. I am delighted that the hall has now been completed. The Government are ready to provide money for projects of this kind in Cornwall. I hope that employers, trade unions and local groups will continue to support these schemes, which help both young people and the locality.

We have done much in the past year for which the hon. Gentleman pressed in the debate on employment in the South-West last February. We have reduced tax on the lower paid. Changes in personal tax allowances last April removed 2.1 million lower earners from tax altogether.

On the question of employment, I am delighted to report that the prospects for china clay in the hon. Gentleman's constituency are good, particularly in the long term.

Tonight the hon. Gentleman has raised the question of grants to tin mining. I understand the importance of this industry to Cornwall, but I believe that, if prices and the ore content hold up, prospects are good. We cannot give subsidies, which are the taxpayers' money, to firms which do not need them. The hon. Gentleman would need to present a very strong case on employment grounds for the subsidy that he claims. I say in passing that the regional employment premium was scrapped because it was thought by industry itself not to be giving value for money in terms of jobs. This we must try to do. As an aside, may I say that regional employment subsidy was not defended until after it had been abolished? Beforehand it was continually attacked and criticised. No one defended it.

Mr. John Pardoe (Cornwall, North)

I hope that the Minister will not spread that remark over the whole of the forces in this House. The Liberal Party has long advocated this form of subsidy to labour-intensive industries, and we stoutly defended it. We were appalled when the Government, who fought the last General Election on the basis of keeping the subsidy—opposing the Conservative policy of scrapping it—reversed their decision.

Mr. Golding

The voices raised in support of REP were not very loud. Those of us who had defended it thought that there was general criticism. It is not the case that we are not prepared to give assistance to Cornwall. That is why the bulk of the county was given development area status. This made it possible for the Government to announce the building of 11 advance factories which will provide 320 new jobs when they are fully operational.

I shall pass on to the Department of Industry the criticisms made by the hon. Member about procedure. Our policy has enabled us to give financial assistance totalling £46 million to the South-West assisted area since 1972. It is not true, therefore, that the money always goes elsewhere. Some £3.2 million of the £46 million was regional selective financial assistance which has provided about 3,200 additional jobs and safeguarded a further 500.

The Department of Industry advertises extensively in the national Press concerning the availability of Government incentives for firms wishing to move to or expand in the assisted areas. The advertising covers the availability of advance factories, and in 1977 there was a good response from firms interested in the South-West assisted area. In Cornwall in the past five years the average period that advance factories have remained vacant between completion and allocation has been about 12 months. That is not a bad record.

I know that the hon. Member wishes the Government to go further and grant special development status to the area. This is a matter for the Department of Industry. and I know that the Minister of State is receiving a deputation on 16th February to discuss this question. I do not hold out any hope that that status will be granted.

One important question raised by the hon. Member referred to the small firms employment subsidy. I shall certainly draw to the attention of my right hon. Friend the Secretary of State the case that has been put tonight. At present, my right hon. Friend is reviewing the scheme. I am sure that he will take account of tonight's debate. Although I am not sure that there can be an extension of assistance to agriculture, I can say that there is certainly a realisation that small firms are important to Cornwall. The hon. Member knows that the Government, and particularly my right hon. Friend the Chancellor of the Duchy of Lancaster and my right hon. Friend the Under-Secretary of State for Industry, the Member for Keighley Mr. Cryer, are devoting much energy to this cause.

Let me cite a few things that have been done in the past year, since the time of the last debate on the South-West. There have been a number of tax concessions in favour of small firms, including relief from capital gains tax. The rate of interest on loans from the Council for Small Industries in Rural Areas has been reduced. The Small Firms Counselling Service has been extended. I understand. indeed, that that scheme began in the South-West because of the importance of small firms in that area—from which it will be seen that the South-West is not left out of consideration. In addition, there are now loans available for 50 per cent. of initial overhead costs to help exporters develop overseas markets.

In Cornwall, the Council for Small Industries in Rural Areas and the Development Commission have been active. That is because we realise the great importance of tackling rural unemployment. I have discovered on travelling around the country what a great problem rural unemployment is, especially for young people living in villages and small towns. The Development Commission plans to build 39 advance factories in Cornwall, and these are expected to provide about 370 additional jobs. Loans by the Council for Small Industries in Rural Areas for tourism in the first nine months of the financial year had already reached £277,000 compared with £220,000 for the whole of 1976–77. Its loans to small industries have increased sharply from £25,000 in 1976–77 to £103,000 in the first nine months of this year.

The hon. Gentleman is interested in the export of fine pottery. Of course, I have always claimed that the finest pottery is made in North Staffordshire. However, I understand that the British Overseas Trade Board is in touch with the Cornwall Development Association about its plans to set up an export co-operative along the lines that the hon. Gentleman suggested in the debate last year. The BOTB has offered to assist the cooperative with its marketing plans.

I have talked so far about the development of industry and rural crafts, but tourism has still to provide needed jobs and incomes to Cornwall. We have as a Government made a great effort to help Cornwall in this respect. The area from Bude to Wadebridge in North Cornwall is one of the three districts chosen for a pilot scheme to promote the tourist industry by developing high-quality accommodation, by providing activity centres and by introducing more effective promotional marketing.

This will be the first time, Mr. Deputy Speaker, that you have ever heard me finish on time in an Adjournment debate. I shall have no time to talk about fishing or agriculture, but perhaps when I visit Cornwall later in the year I shall get a chance to talk about those subjects. I shall certainly draw the attention of my right hon. Friend the Minister of Agriculture, Fisheries and Food to all that has been said about fishing and agriculture.

Tonight I want to thank the hon. Gentleman for allowing me to express my concern at Cornwall's plight, and I do so sincerely. There is a terrible problem in Cornwall, and I assure the hon. Gentleman that the Government are anxious to help.

Question put and agreed to.

Adjourned accordingly at two minutes past Twelve o'clock.