HC Deb 09 March 1978 vol 945 cc1792-804

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

12.16 a.m.

Mr. James Sillars (South Ayrshire)

The people of Doon Valley are very grateful that this subject should have been selected for debate this evening. For them the development status of the area.

with implications for future levels of employment, is a matter of supreme importance.

The constituency of South Ayrshire covers 700 square miles, and has a number of communities in different areas, all of which fact: considerable problems over employment. We already have two special development areas—one of long standing covering the Girvan district in the south, and one in the north at Cum-nock, the designation of which is of more recent origins, and is relevant to the subpect of the Doon Valley.

I emphasise that I do not and nor does anyone else in the Doon Valley object to the designation of Cumnock as a special development area. Although Cumnock is not the subject of the debate this evening, unemployment is high there too. There is constant anxiety about future developments and the special development area status is fully justified and should be retained. There is no question of Cumnock versus Doon Valley. My contention is that both areas justify special status, and my complaint is that only one area of need has been recognised.

It is a tribute to the fair-mindedness of the people of the Cumnock district that they have expressed shock at the exclusion of Doon Valley and that they give full support to its inclusion. There are anxieties and problems in most parts of South Argyleshire, but one could find unanimous agreement that the area with the greatest number of problems, and that which faces, the most acute jobs crisis, is the Doon Valley.

My purpose is to prove the case that the Doon Valley should be included in the special development status given to Cumnock just under a year ago. To make the case I want to sketch in some of the background and provide details of the character of the problem confronting us now.

The main villages are Dalmellington, Bellsbank, Patna, Rankinston, and Dalrymple. The total population is about 10,000 in these villages. The coal deposits underlying most of the area gave rise to the rapid development of the Valley, starting around 1840, when the iron masters moved in to exploit the mineral wealth. Exploit them they did, and they exploited the labour, too.

Ironfounding declined from the turn of the century and by the 1920s it was coal mining that dominated the Valley. It is still coal mining, with only one pit left—Pennyvenie colliery—that dominates employment. One pit, and still no alternative work for men.

It is not as though this situation that we face is new. There have been six colliery closures since 1952. In 1960, total colliery manpower was 2,034, which, together with associated activities, gave us a male work force of 2,202. By 1970 that had declined to a total work force of 1,056, and we are now down to just around the 500 level. In the past eight years, since I became the Member for the area, the needs of the Doon Valley have been raised several times in similar debates, and the local authorities and interest groups within the area have persistently pressed for action.

What I have described is a pattern of exploitation which has been the curse of the Doon Valley—namely, all give and no take, and the extraction of wealth with no retention or return of industrial investment to secure the future of the people without whose effort the wealth would never have been produced.

It has been pointed out to me with some force by Tom White, the district council's area officer, that the pattern of exploitation continues. The NCB opencast executive is now working on the Beoch area, above Dalmellington and, with an annual output of around 192,000 tons in a highly profitable operation, is taking the last of the coal-based wealth from the valley. Again the valley gives.

Because of the dominant position of the coal industry in the area, and because coal has been in public ownership for 30 years, the Doon Valley and its people have, in effect, been in public ownership. They are entitled to expect from that situation, to which Socialists strive, better treatment than they have received.

Had the iron masters remained in control these past 30 years and ripped off the wealth of the area and left it in a state of decline and demoralisation, they would rightly stand condemned. The fact that they were replaced by a publicly-owned industry, with Government assuming public responsibility, in no way lessens the condemnation. Indeed, the degree of condemnation increases because the replacement of private by public control is supposed to avoid what the valley is now going through.

The position that we now face is grim. The local councils—Strathclyde Regional Council and the district council—have appointed an area co-ordinator. This post for the Doon Valley has been set up on an experimental basis for three years to tackle the worst effects of multiple deprivation.

This initiative comes after the publication by the district council of a special report on the Doon Valley, which was published in September 1976. That report highlighted the priority category of the valley. I quote from paragraph 3.3: The most recent blow to the employment situation came from the closure of the Minnivey Colliery, which stopped production in November 1975, with the loss of 290 jobs. The only remaining colliery at Pennyvenie has an employment force of 440 but the reserves in this colliery are not expected to last for more than four years at the outside. The number of new jobs required to absorb the labour available from this pit closure alone is evidence of the need for immediate action if the existing communities are to remain viable. Later the report went on to state, in paragraph 7.2: Very briefly, it is clear that the failure to act quickly and attract industry to the Doon Valley will result in a considerable blow to the communities involved. One very possible scenario would include a rapid fall in population due to out-migration, the increase in unemployment rates, the decreased likelihood of entrepreneurs investing in the area, an ageing population, the declining viability of schools, shops and other essential services, the gradual worsening of public transport, etc. Cause and effect may be difficult to establish, but all factors would serve to mutually reinforce each other in an inevitable and vicious downward spiral. That is what is happening now. We are in a downward spiral. With constant fears about the life-span of Pennyvenie, unemployment rising, an absence of any moves on a new industrial base, morale among the people is sagging again.

I shall show figures to prove that I do not exaggerate. These were presented at a meeting called by the area co-ordinator, held in Patna on 26th January. They are the figures for male unemployment based upon a 17 per cent, sample of the village communities. They are as follows: Rankinston, 29.8 per cent.; Patna, 19.7 per cent.; Dalrymple, 21.6 per cent.; Dalmellington, 33.2 per cent.; Bellsbank, 25.2 per cent.; and the Doon Valley as a whole, 25.2 per cent. If anything happened to the Pennyvenie colliery, the figures would leap upwards, with some areas having male unemployment of between 30 per cent, and 40 per cent.

I understand that it is not the remit of the Department of Industry to answer for Pennyvenie. I have already sought assurances from the Department of Energy and the National Coal Board about the life of the colliery. Everyone knows that there is limited life there, and that makes it imperative to get new industry in with male jobs.

Given the levels of unemployment, the pronounced decline in mining, the precarious position of the last pit, the need to demonstrate that the people of the valley are not forgotten and the known views of the district council for special treatment, it came as a stunning blow to be excluded when the Cumnock designation took place.

Cumnock and Doon Valley district is in two distinct parts. To extend special development area status to one part and exclude the other more depressed area is obvious nonsense. Moreover, it is dangerous nonsense, as it totally undermines the strategy adopted by the regional and district councils. It puts the Doon Valley at a serious disadvantage when everyone states without equivocation that it needs to be advantaged.

Since that remarkable error of judgment I have been to both the Minister of State, Scottish Office, and the Minister of State, Department of Industry. I have taken local authority deputations to both Ministers. I have written on a number of occasions to the Minister of State Department of Industry. I am told by him in correspondence dated 2nd March that he is still considering the representations about Special Development Area status but I do see considerable difficulties in making any further substantial upgradings at this stage. What no Minister has yet explained, and the people are entitled to know is why the Doon Valley was excluded in the first place. Given the facts of the situation, it was an incredible blunder. That point requires an answer tonight. Did the Department make the necessary inquiries? Did it know the facts, or did it overlook the valley altogether when making its assessment of where to place the designation of special development area status? We are not talking about making "further substantial upgradings" but of correcting an obvious and glaring injustice to a community of just over 10,000 people.

I hope that when my hon. Friend replies he will not shelter behind the device that the Doon Valley is included in the Ayr employment exchange area, and that this makes it difficult to identify it administratively and thus to give it special development designation. I tell him in advance that to plead administrative problems is not acceptable. Any administrative problems pale into insignificance when compared with the valley's unemployment rate, its bleak economic condition and the needs of the people.

My experience is that where there is a political will—the Government's wages policy is an example—there is an administrative way. What has been lacking so far is the acknowledgement of error in excluding the valley, an acknowledgement that it must be an area of high priority, and the political will on the part of Government to make it such. Without those, it is patently obvious that so-called administrative problems are mere excuses for inaction.

What surprises many people in the Doon Valley and, indeed, in the Cum-nock area, is that this case should have to be made at all. Everyone else except the Government regards it as self-evident.

University departments concerned with policies of rehabilitation know about the Doon Valley. Those committees of Strathclyde Regional Council which deals with multiple deprivation and industrial policy, know of the special problems afflicting the Doon Valley. The district council told the Scottish Office in its report in 1976 that it wanted special development area status. The Scottish Development Agency knows how special the problem is. A large number of people walking about the streets in the West of Scotland know of the special nature of the problems in the valley, because of the publicity given to it over a long period. Everyone, it seems, knows except the Government.

The people that I represent in the valley are feeling sore. When they want to be picked our. for special industrial help, they are ignored. When they do not want to be picked out as a possible nuclear waste area, they are picked out. Legitimate requests for industrial action go unheard and equally legitimate objections to nuclear waste projects also fall upon deaf ears. They feel used and abused.

Understandably, the Government's reputation in the Doon Valley is not high. Even their most active supporters feel let down. There is an opportunity tonight, with an affirmative to my request for special development area status, for the Minister to restore some of that lost faith.

Earlier in my remarks I said that South Ayrshire had a number of priority areas. That is true. But the Doon Valley on any and every test is the most urgent. No matter the measurement criterion—be it geographical location, geology, topography, social environmental, economic, industrial—the Doon Valley is an outstanding priority. The people would prefer that this were not the case. They want it to be different. They deserve to have it different. But to achieve the progress that will make it different, we need recognition from the Government. I ask my hon. Friend to start tonight by conceding the case.

12.31 a.m.

The Under-Secretary of State for Industry (Mr. Bob Cryer)

The hon. Member for South Ayrshire (Mr. Sillars) has raised an important issue tonight. I think that in some instances he has been unfair. Some of his harsh words demonstrate that certainly he is not the Labour Party supporter that he was, for instance, when I first entered the House. I expect him to be critical, but I think that he has veered over to unfairness, because clearly everybody is concerned about the level of unemployment, and it stretches far wider than the Doon Valley.

The question of special development area status for the Doon Valley is currently being considered by my right hon. Friend the Minister of State, Department of Industry, in consultation with the Minister of State, Scottish Office, and a decision will be announced as soon as possible. I am grateful to my hon. Friend the Under-Secretary of State for Scotland—the Member for Glasgow, Provan (Mr. Brown)—for being here tonight and taking a close interest in this debate.

Any consideration of an application for a change in assisted area status necessarily takes time as many factors must be taken into account. The situation in the area in question has to be reviewed in the light of the statutory criteria for designation of assisted areas as denned in Section 1 of the Local Employment Act 1972 as amended by the Industry Act 1972. These require the Secretary of State to have regard to all the circumstances, actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies". In addition, the consequences of an upgrading must be considered most carefully, including the effects on existing assisted areas and on the non-assisted areas and the possible repercussions from areas with equally strong cases. I shall mention those later. Thought must also be given to what is the most effective way of helping to solve an area's problems. Higher assisted area status, although it is pressed on the Government by a number of local authorities, is not always the most appropriate solution.

Regional policy is inherently a long-term policy. It seeks to deal with underlying structural, industrial and employment problems by promoting investment by existing companies and encouraging mobile investment projects to move to the assisted areas. That necessarily takes time. If regional policy is to be successful, it must be stable. Frequent changes of status can only lead to uncertainty in industry and cause companies to discount the incentives available in making their investment decisions.

At a time when investment is low throughout the country, the Government must avoid doing anything which might discourage investment or deter companies from moving to the assisted areas. One of the great problems now is that there are not sufficient mobile projects to satisfy all the demands and to meet the level of unemployment. Several changes were made last April, and consequently the Government are reluctant to alter further the assisted area boundaries unless it is absolutely necessary.

There is a further reason why this would be a bad time to make changes in the assisted areas. The effectiveness of regional policy is inevitably limited in a recession. There are few mobile pro- jects around; changes in the extent of the assisted areas have little effect on the total amount of investment undertaken in the country; structural problems become swamped by problems caused by the recession, and regional policy is not primarily intended to meet these problems. The Government have introduced other measures to deal with the effects of the recession, and I shall come to those later. It is very difficult to identify long-term trends at present, as they have been overlaid with the very high unemployment that is being experienced in most places. There is thus a strong case for leaving the coverage of the assisted areas unaltered until overall unemployment begins to fall.

The assisted areas are already very extensive. Forty-three per cent, of all employees and 65 per cent, of land area fall into some sort of assisted area at present. The more extensive the coverage, the less prospect there is of effectively helping all the areas concerned, particularly those areas with the worst problems. Regional policy is a discriminatory policy, and any addition to the assisted areas automatically erodes the preferences enjoyed by the existing such areas. Similarly, an extension of special development areas reduces the advantages enjoyed by the present ones. It is therefore Government policy to counterbalance any upgradings with corresponding downgradings. The hon. Member will appreciate that in the current economic climate downgrading is not a simple matter.

The hon. Member said that it is only a small adjustment that he is seeking, but my right hon. Friend the Minister of State for Industry must also bear in mind the likely repercussions of upgrading one area, even if this is only a small one. If there are other areas with stronger cases for upgrading these applications must in all fairness be granted too, the result of which would probably be a large increase in the areas with special development area status. This would clearly have a significant impact on other areas and would reduce the preferential difference between special development area status and other area statuses.

I should point out to the hon. Member that we have had several applications, and there are a number of development areas of the same status as the Doon Valley with levels of unemployment that are higher. I do not put that forward as any sort of compensatory case, but the fact is that we have to consider any other applications that might result. The hon. Member referred to unemployment figures from a survey which disclosed higher levels of unemployment than the average for the employment office area.

Mr. Sillars

Can the Minister tell me why Cumnock was designated a special development area when its position is not as bad as that of the Doon Valley?

Mr. Cryer

When the decision was made we took many factors into account in the granting of special development area status to Cumnock. The hon. Gentleman must understand that if we were to alter the status of the Doon Valley we would have applications flowing in, on the basis that he outlined tonight, from Cardigan, with 16.8 per cent, unemployment; Tenby, with 18.5 per cent.; Wrexham, with 12.5 per cent.; Lampeter, with 17.8 per cent.; Helston, with 19.5 per cent.; Ilfracombe, with 19.4 per cent.; St. Ives, with 20.1 per cent.; Newquay, with 15.0 per cent.; Falmouth, with 13.1 per cent.; Newton Stewart, with 16.4 per cent.; Stranraer, with 11.8 per cent.; Wick, with 12.3 per cent.; and Campbeltown, with 12.5 per cent, as against the hon. Member's travel-to-work area rate of 10.8 per cent.

All those levels are too high and are a signal reflection of the failure of private enterprise to invest in this country. We have to remedy this in whatever way we can.

The Government would have to deal with applications of that sort if they were to consider the position fairly across the board. Of the development areas that I have read out, several have applied for SDA status in recent months. It is not a question of the possibility being there o they have actually applied.

Designation of assisted areas is by employment office area. These are the links that correspond most nearly to the local labour markets, and the boundaries of the Employment Service Agency are defined on the basis of travel-to-work movements. Moreover, these are the units for which the relevant data on unemployment and job vacancies are most readily available.

The Doon Valley is part of Ayr employment office area. The hon. Member suggested that this was an anomaly, as Doon Valley is part of the Cumnock and Doon Valley district, most of which falls in the Cumnock employment office area and consequently has special development area status.

I can assure the hon. Member that this is not an exceptional case. Local authority areas do not correspond, except coincidentally, with local labour market areas, and there are many local authority areas which contain areas with different assisted area status. The hon. Member has, moreover, suggested that the employment office area boundaries should be adjusted. We have looked into this point and consulted the Employment Services Agency, and we have concluded that the current boundaries are correct. We have examined the travel-to-work patterns within the area and are satisfied, after such close examination, that the current boundaries are correct.

The Doon Valley is not a self-contained economic unit, so it would not be appropriate to make it a separate employment office area. The travel-to-work patterns confirm that a sizeable number of inhabitants of the Doon Valley look to Ayr for employment. The links with Cumnock are very much weaker, and it would be inappropriate to transfer the Doon Valley to the Cumnock employment office.

This is not an administrative device, nor is it an excuse for inaction, as the hon. Member suggested. The Government by no means underestimates the problems of the Doon Valley, which the hon. Member described. Unemployment is unacceptably high, as it is hi other parts of the country. The Government are committed to reducing these high levels of unemployment and, to do so, have introduced special measures to create and sustain jobs and to stimulate industrial investment. For example, the workers' co-operative in Patna, which is known locally as "Sadie's Ladies", has had a grant from the job creation projects scheme of £52,000 to maintain 25 jobs for a year.

The Scottish Development Agency is in close touch with this very important development. Several schemes have been established to promote investment and to aid particular sectors of industry. A project in the Ayr EOA has already been offered assistance worth £127,000 under one of these schemes.

Furthermore, the Government recognises that all of Ayrshire, and the Doon Valley in particular, has serious structural problems. That is why it has development areas status. Projects in the area are eligible for regional development grants on buildings, plant and machinery, and for selective financial assistance under Section 7 of the Industry Act 1972. Both Ayr and Cumnock have already received a substantial amount of aid from these sources. Within the last two years, each EOA has received offers for three projects; offers to Ayr EOA amount to nearly £3.2 million towards total costs of £21.9 million for projects expected to create 778 jobs. In Cumnock offers worth £734,000 have been made towards costs of £4.7 million, and about 756 jobs are expected to result. Inhabitants of the Doon Valley should be able to benefit from this new employment. In particular, the major development by Digital Equipment Corporation at Moss Hill industrial estate is sited within easy reach of the Doon Valley.

The area is also receiving help from the Scottish Development Agency, which is well aware of the problems of the Doon Valley. The needs of the area are taken into account in the development of the Agency's programme over the whole range of its functions. For example, two advance factories are to be built at Dalmellington, and various environmental projects have been undertaken, including four derelict land clearance schemes. In Cumnock the Agency has taken on a major holding in Stonefield Vehicles Limited, and has plans to build extensions to factories within the employment office area.

Both the Agency and the Scottish Office hold meetings and seminars with local councils and industrialists to ensure that they are aware of the incentives available to them, and to encourage them to invest. The Doon Valley should not feel that it is being neglected by the Government in any way.

As the hon. Member is no doubt aware, the Cumnock and Doon Valley District Council is working hard to attract projects to the area. It has an advance factory in Patna, which it is hoped will be occupied in the very near future, thereby creating more jobs in the Doon Valley itself.

Mr. Sillars

It is.

Mr. Cryer

Yes, indeed. In fact, negotiations are at an advanced stage for that.

Mr. Sillars

There must be something wrong with my hon. Friend's brief. People have actually started working in there.

Mr. Cryer

There is nothing wrong with my brief. All that I can say to my hon. Friend is that negotiations are at an advanced stage for Government assistance of some sort or another to this venture.

The small firms employment subsidy, which was introduced for a trial period of one year in special development areas, is now being considered for a much wider geographical coverage so that the differentiation between a special development area and a development area for the purposes of the small firms employment subsidy, which grants assistance to small firms of less than 50 people, may soon no longer exist.

As I said earlier, my right hon. Friend the Minister of State, Department of Industry is looking carefully at this application for special development area status, and he will certainly take note of the points the hon. Member has made here tonight. There are many factors to be considered, and the hon. Member will be notified of his decision as soon as possible.

Question put and agreed to.

Adjourned accordingly at fourteen minutes to One o'clock.