HC Deb 15 March 1979 vol 964 cc861-74

11.47 p.m.

Mr. Eric Ogden (Liverpool, West Derby)

I ask the House to accept that at this time of night we do not have the fullest possible attendance in the Chamber, but in the Chair itself, on the Front Benches and on the Back Benches we have quality. That praise may be some reward for those hon. Members who have stayed here at this hour.

We are technically debating the Second Reading of the Consolidated Fund (No. 2) Bill, a simple three-clause Bill which will provide a further sum of £29½ million for the year ending 31 March 1978 and a further sum of almost £578 million for the year ending 31 March 1979. Those are very large sums of money. I make no complaint about that. I believe in public expenditure, public services and Government support for both public and private enterprise.

One word in the preamble to this short, three-clause, one-page Bill does, however, cause me some concern. The preamble reads: We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards making good the supply which we have cheerfully granted. I would suggest to my hon. Friend the Under-Secretary and to the parliamentary draftsmen that the word"cheerfully"is at least inaccurate and at best an overstatement. It is mis-terminology rather than terminology.

We have many informed debates in this Chamber about the desirability of parliamentary control and scrutiny of Government expenditure. Parliament has greatly increased the degree of accountability of Governments to Parliament in this regard over the past years. We ought to continue so to do. But we should recognise that Parliament, or Members of Parliament or Select Committees, cannot control every item of public expenditure. We are parliamentarians, not auditors. We have to rely on the honesty, ability, integrity and dedication of many men and women in all Departments of Government to do the greater part of that task for us.

The most careful scrutiny that I have been able to undertake of this massive 500-page tome of Supplementary Estimates and most, if not all, of my experience in this place over 14 years—it may seem longer to my hon. Friend the Under-Secretary—have satisfied me that the standards and ability of British civil servants in this regard are the best in the world. Civil servants have to accept much unfair and unfounded criticism. I want to put on record my praise of them. I also want to put on record that I want nothing from them in any shape or form, at least tonight.

My main purpose is to refer to parts of these Supplementary Estimates. Class IV, vote 6, page 115, dealing with general support for industry, amounts to £1,552,242,000. That is an enormous sum. I shall also refer to page 195, Class VIII, vote 1, regional support and regeneration, £13 million; page 196, other local services, derelict land, £12 million; and page 199, urban programme. I shall ask for information in as much detail as possible on Government selective assistance to industry in connection with inner city schemes on Merseyside, especially within Liverpool.

I am grateful that my hon. Friend the Under-Secretary of State for Industry has undertaken to answer my inquiries My hon. Friend has a special knowledge of Merseyside. He knows the needs, abilities, difficulties, opportunities and successes of Merseyside. His visits to and stays on Merseyside have been frequent and formal and frequent and informal. Only a few days ago he was on Merseyside making a formal visit. At the end of the official part of his visit, he took extra time in the evening to visit my Labour clubs in Dovecot and Gillmoss and went on to Walton, Garston, Huyton and many other areas. He likes to know what is going on. That is not because he does not trust his civil servants but becauase he likes to check for himself. He wants to know the feelings and opinions of others.

I understand that if it were not for my request that my hon. Friend should answer my inquiries, he would now be back in his constituency of Nuneaton meeting his constituents or on his way home. I apologise to him and his constituents. I hope that it will be appreciated that their temporary loss is my gain.

In view of the real knowledge and experience that my hon. Friend has of Mer-seyside, I have no real reason to go into detail. I do not have to spell out where an area is. I do not have to remind him of the names of companies. I have no need to spell out in great detail the points that I wish to make.

My hon. Friend knows that Mersey-side grew from and around the docks. He knows the changes that have taken place over the past years. There has been the change from sea passenger transport to air passenger transport. There was a time when one could take one's manservant, butler or even a lady's maid to the Adelphi hotel in the centre of Liverpool and when the groom had to go to a smaller hotel down the road. I never had a manservant, butler or groom, although that should have been the style to which the hon. Member for North Fylde (Mr. Clegg) and I were accustomed. However, that was the style of Mersey-side in the heyday and height of the great sea passenger transport across the Atlantic.

Sea transport changed to air transport. Bulk loose cargo handling changed to container traffic. The tremendous cotton and wool imports into Lancashire, which my hon. Friend understands full well, changed to man-made fibres produced in Lancashire. That clearly had an effect on trade.

My hon. Friend knows of the technological, social and economic changes that have had an effect on Merseyside. He knows, too, that the oil crises and the slump in world trade have caused major manufacturing concerns, whose main base was and is in the Midlands and the South-East, to rationalise and reorganise. The Merseyside parts of those organisations have been cut back or closed, in spite of the aid that the Labour Government have provided and in spite of the aid, to a much lesser degree, that the Conservative Government provided.

The rationalisations, contractions and closures have taken place in spite of Government aid and not because of any lack of Government aid. We have difficulties with Dunlop, Plessey, Western Shiprepairers Ltd. and other companies. Part of the problem is that Liverpool is news. Unfortunately, on too many occasions, both outside and inside this place, bad news is news on the front page as part of the six o'clock headlines whereas good news gets half a column-inch on the back page. That is one difficulty we must try to overcome.

Merseyside has received, is receiving and, under a Labour Government, will continue to receive massive financial support for industry, housing, the inner areas and the public services. Partnership schemes in the inner city areas are the best possible example of co-operation between local organisations, city and district councils, county councils and the Labour Government. Such aid not only goes to housing and social services, and to industry, large and small, in the inner areas, but has brought considerable benefit to urban areas.

Unfortunately, Liverpool council is now under Liberal and Conservative control and is not as active or effective as it should be. Let me give two examples. My hon. Friend the Minister knows the housing needs of Merseyside. However, Liverpool corporation was £3 million underspent on its housing estimates last year. What happens in that situation? Along comes the Department of Employment and says"You have unemployed joiners, builders, plasterers and workers of all kinds. Here is £3 million "—exactly the same sum as was underspent—" to provide work for Merseyside people and to cope with £40,000-worth of housing repair work."

The chairman of the Liverpool corporation housing committee, Mr. Alton, happens to be running in the Edge Hill by-election on the simple platform of housing. I think he has a tremendous cheek—" gall"might be a better word—but the people of Edge Hill will decide his fate in the near future.

We have unemployed teachers in the area and the education department is underspent on its current account. Liberal-Conservative control—mainly through Liberal misguidance rather than Conservative actions—has been a disaster for Merseyside. But in many other areas we are doing a great deal to help ourselves to improve employment, housing, and other aspects of life on Merseyside.

The list of such help is too long to mention in this short debate. However, I need only mention Government support for industry, investment in the Giro, and the Civil Service Bureau. Other action has come in terms of Tate &Lyle, Meccano—where I almost took up residence for three weeks in seeking to assist the position—and in a company which belongs to the Imperial Tobacco group and whose name I cannot mention but which happens to be the same as mine. There have also been the offer to Dunlop and the investment in Vauxhall. In all those spheres there has been public investment—which means public support for employment, training opportunities and many other matters.

The difficulty is that too often Merseyside Labour Members are called in to try to save employment in a factory when nearly all the decisions have been taken. We act as visiting firemen rather than prevention officers. We undertake rescue operations rather than preventive measures. It is not the role of hon. Members to do the job of management or of trade unions. Because of these crises and constant alarms, we are too often not able to recall the tremendous amount of aid and assistance that has been provided by the Government in certain areas. We become so involved in other people's problems that we overlook such help.

We are both a service area and a manufacturing area. Our history has been as a service area. We now have, and have had for some time, the complementary support of major industry—some in our own factories and some in others. In my view, however, the future of Merseyside will depend on more assistance for the service areas while we try to maintain the level of support for the manufacturing areas.

Merseyside people are busy, lively and extremely hard-working. We have tried to help ourselves in every possible way—not by putting our hands in anybody else's kitty, but by playing our part in our own future. We shall continue to need public investment and support on Merseyside. It is a fact that the other political parties on Merseyside are commited to reductions in public expenditure. I want my hon. Friend the Minister tonight to remind everybody how much aid we receive every day and in every way from a Labour Government.

12 midnight

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

My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) need not apologise to me or the House for raising the subject of Government assistance to Merseyside. This is not the first time that he and I have debated this subject, and unfortunately it is not the first time that such a debate has been at this hour of the night.

My hon. Friend made a cogent case tonight. I recognise that he knows his constituency well and that his constituents know and respect him for the ardent and diligent work that he does on their behalf. The vein in which he has spoken and the way in which he has put his points tonight illustrate his pursuit of the aspirations and needs of the people whom he represents. That is why I am pleased to go into detail in answering his points.

The Government are very much aware of the problems which my hon. Friend has so ably described. I assure him that we shall continue to do all we can to tackle them and do something about solving them. My hon. Friend is right when he says that without a Labour Government Liverpool's many problems would have been a great deal worse. Without our measures, unemployment would have been far worse, although I appreciate that that is small consolation to the many thousands who are still unemployed in Liverpool.

Within a few months of coming into office, in August 1974, this Government made Merseyside a special development area. This means that firms investing there can qualify for the maximum amount of the Government's regional incentives, including regional development grants, regional selective assistance and Government factories, at the highest rates available in Great Britain. The advantages of Merseyside to industry and the incentives on offer there are well publicised. The Department of Industry runs extensive publicity campaigns both at home and abroad to persuade firms to set up in the assisted areas, and especially in the special development areas such as Merseyside.

The industrial development certificate control is a valuable instrument for steering industry to the areas of most need. Between March 1972, when the scheme started, and 30 September 1978, about £175 million worth of regional development grants has gone to firms in the Merseyside SDA.

Under this Government, offers of £60.1 million in regional selective assistance have been made in respect of 339 projects in Merseyside, costing in total £409.2 million. It is estimated that this will create 22,600 new jobs in the area and safeguard a further 21,800 jobs. Within inner Liverpool, offers of £8.8 million in regional selective assistance have been made for 75 projects, costing in total more than £43 million. It is estimated that this will create 2,552 new jobs in the area and safeguard a further 3,934 jobs.

Within Edge Hill, £787,500 has been offered to Meccano Ltd. for a project with a total investment cost of £4.2 million, in conjunction with assistance from the city council to keep Meccano from moving to a green field site, with the loss of 750 jobs to inner Liverpool. Regional selective assistance offered to Imperial Tobacco, to maintain 600 jobs, should also do much to aid employment prospects in Edge Hill.

Merseyside is one of the chief beneficiaries from the advance factory programme, with 123 units authorised since March 1974, providing more than 1 million sq. ft. of floor space. These are expected to provide, when fully occupied, 4,800 jobs. Of these, 59 units amounting to 484,000 sq. ft. have been completed. Merseyside took the lion's share of the most recent programme commencing last August. Of this total, 37 units have been authorised for the inner Liverpool partnership area, providing nearly 300,000 sq. ft. of floor space, half of which is complete or under construction. I shall gave my hon. Friend some further details about the exact location of these advance factories in a few minutes.

Altogether, it is estimated that the Government spent £346 million in regional preferential financial assistance for industrial development in the Merseyside area between the 1972–73 and 1977–78 financial years, most of it falling in the latter years. When compared on a per capita basis, the Merseyside special development area compares very favourably with other assisted areas in Great Britain.

Up to the end of September 1978, the European regional development fund contributed £11.6 million towards the cost of projects located in the Merseyside special development area. Of this amount, £5.1 million related to 55 industrial projects or Government advance factories and £6.5 million was in respect of 102 infrastructure projects.

Nor must we forget the dispersal of Government work from London, especially to Merseyside. Since 1973,1,260 Civil Service posts have been dispersed to Merseyside. Under the Hardman dispersal programme, Merseyside was to benefit from 3,250 posts over the next five years. It has been agreed that 1,000 posts in the Health and Safety Executive will be transferred to Merseyside. There will also be 1,250 posts for the Ministry of Agriculture, Fisheries and Food, 500 posts for the Foreign and Commonwealth Office and 1,000 posts for the Home Office, all at the Exchange station site in inner Liverpool. These are the areas about which my hon. Friend expressed concern. In addition, as a result of the Government's policy to set up new work away from London whenever possible, 1,780 posts have been established in the Merseyside SDA and up to 502 more are planned to be set up there. These include the Customs and Excise VAT enforcement centre in Liverpool.

Service grants—in which my hon. Friend has a special interest—are available under section 7 of the Industry Act 1972 to service industry firms moving to, setting up or expanding in the assisted areas. To qualify, firms must have a genuine choice of location between those areas and elsewhere and provide a minimum of 10 jobs. The grants favour the special development areas such as Merseyside, where firms may qualify for assistance of up to £4,000 per job. From March 1974 up to 31 December 1978, 27 offers, totalling £4.5 million and involving 2,000 jobs, were made under this scheme to firms in Merseyside. The progress of the scheme is under review. The grants were increased in 1976 and it is likely that further substantial increases will arise from the current review. In addition, in the inner city districts designated under the Inner Urban Areas Act local authorities can use the Act to offer assistance to service industries on the same basis as to manufacturing concerns.

But the future of Merseyside is closely allied to the success achieved by the Government's efforts to promote industrial development nationally through the industrial strategy. In support of the strategy, assistance is available to help modernise and regenerate companies under section 8 of the Industry Act 1972. From March 1974,53 projects costing over £36 million have been offered assistance amounting to £3.7 million. In the inner Liverpool areas, 23 projects, costing over £1.3 million, have been offered assistance of £211,000.

The National Enterprise Board, of course, plays a fundamental part in the Government's industrial strategy. Its North-West regional board, based in Merseyside, is there to invest in firms with suitable plans and prospects, although, of course, its rate of investment is governed by what opportunities come forward to it. There is no limit within the NEB's overall budget to the amount that can be spent either in the North-West in general or in Merseyside in particular.

The NEB is required by its guidelines to pay particular attention to areas of high unemployment. In Merseyside, Hemmings Plastics has already been assisted by the NEB's funds, and the area derives considerable benefit from investments such as that in the British Leyland plant at Speke. I very much hope—no doubt my hon. Friend will convey this to his constituents—that many more firms in Merseyside will come forward to discuss possible investment with the NEB's regional office in Liverpool. It is a matter of the NEB and firms getting together. I hope that my hon. Friend will do all he can to encourage that getting together.

It is vital to create a climate in which small firms can thrive, and I say that wearing my small firms hat in the Department of Industry. Much of the factory building in Merseyside by the Department of Industry is directed specifically at small firms, and the inner city partnership committee has their needs very much in mind.

There is also a small firms information centre in Liverpool run by my Department, and our small firms counselling service gives small firms locally the opportunity to discuss their problems with experienced business men. Up to January this year, the centre handled nearly 3,500 inquiries. The committee to review the functioning of financial institutions, which is chaired by my right hon. Friend the Member for Huyton (Sir H. Wilson), has today published an interim report making a number of thought-provoking recommendations on small firms. Indeed, his own efforts are a very good example of Liverpool industry. Together with my right hon. Friend the Chancellor of the Duchy of Lancaster, I shall be responding to some of those points tomorrow—or, rather, later today. The Government are giving those recommendations the fullest consideration, and we shall be responding in greater detail in due course.

Apart, however, from the measures which have been designed to help small firms, particularly those carried out by the small firms division of my Department, I want to tell my hon. Friend something about the special temporary employment measures, because some of the things that I have been talking about so far, although they are designed to help create further employment opportunities and safeguard existing jobs through industrial expansion, may take time.

To help mitigate the worst effects of the very high level of unemployment to which my hon. Friend has referred, caused by the current recession, the Government have introduced, as he knows, several special employment schemes, such as the temporary employment subsidy and the job creation programme. On Merseyside, in total such measures have assisted 56,099 workers. That is a very large number of workers who would not be in a job now if it were not for these measures, or whose jobs have certainly benefited in the past by those special temporary employment measures.

The temporary employment scheme is to close for applications on 31 March 1979 and will be replaced by the new scheme to support short-time working as an alternative to redundancies. This will have particular significance in Merseyside, and the new scheme will operate until the Government's proposals for a statutory scheme to support short-time working have been implemented.

Merseyside benefits, as my hon. Friend has pointed out, from the Government's inner city policy. Liverpool is one of the few cities with a partnership under the Government's inner city policy. The partnership committee, as I know my hon. Friend recognises, comprises the relevant Government Ministers and members of the local authorities concerned. The Liverpool one is chaired by my right hon. Friend the Secretary of State for the Environment. The partnership committees, particularly the Liverpool one, have as their top priority the regeneration of the economy of their areas.

I am a member of the Liverpool partnership committee, and at the meeting I attended last week, on 5 March, we agreed to set up a meeting of officials to carry forward the consideration of the proposals in the report by PA Management Consultants Ltd., relating to the co-ordination of industrial promotion in the area. That was a significant report, to which my hon. Friend has referred previously. The House will recall that this report on the attraction of industry to inner Merseyside was specially commissioned by the Department of Industry. The Government gave their speedy response to the report in August and we want to see some of its recommendations carried into practice.

The partnership committee is there to co-ordinate action for tackling the problems of the area. It has drawn up a programme of action which is being implemented. The partnership area will receive £11 million under the inner city construction package in the period up to March 1979, a further £2½ million from the urban programme and, afterwards, £10 million per annum from the programme.

I want to give my hon. Friend some examples to give him the flavour of the sort of thing that I am talking about. The construction package included assistance for 75 factory units for small firms providing 212,000 sq. ft. of floor space. Let me give some examples, including the Edge Hill advance factory units, which cost £306,000, the Bourne Street advance factory units, costing £213,000—also in the Edge Hill area—and the Jamaica Street-Jordan Street units, which cost £314,000. In addition, the construction package included money for roads and services In Erskine Street and Islington—a total of £735,000, again in the Edge Hill area—and there have been adaptations to the Chatsworth primary school, at a cost of £205,000. The provision of the all-weather pitch at the Butler Street primary school at a cost of £50,000, improvements to the Pickton sports centre costing £25,000, and the rehabilitation of sewers in Erskine Street at a cost of £70,000 were all provided under the urban programme in 1978–79 and proposals are being considered for the full-scale development of the Erskine Street site by means of joint funding by the urban programme, the community land scheme and derelict land grant resources.

I hope that, having been given the flavour and details of the projects, my hon. Friend will convey to his constituents what the Government are trying to do for their futures, their lives and their environment.

Further industrial schemes will be undertaken in the implementation of the partnership's first inner area programme. The partnership has identified as its overriding objectives the economic, social and environmental regeneration of Liverpool. The programme contains urban programme projects aimed at economic regeneration totalling more than £12 million during the three years 1979 to1981 which it covers. These include the acquisition and servicing of industrial sites, the construction of advance factory units and the payment of loans and grants to firms under the Inner Urban Areas Act.

The local authorities in other designated areas have increased powers to assist industry under the Inner Urban Areas Act 1978. Wirral, as a programme authority, has powers under the Act and an allocation of £1½ million in 1979–80 from the urban programme, with more in subsequent years. Sefton and St. Helens are also designated under the Act. I give those examples because I do not want my hon. Friend to conclude that all our assistance has gone to inner areas or that it had gone to inner areas to the detriment of the outer areas. We have been trying to help the outer areas as well.

The whole of the special development area qualifies for the maximum levels of regional assistance. Examples such as GEC-Fairchild and GEC-Schreiber testify to our efforts to steer projects to Merseyside as a whole.

Merseyside also receives substantial assistance from other Government expenditure programmes, on, for example, housing and roads. In the 1978–79 and 1979–80 financial years, more than £84 million has been allocated under the housing investment programme and more than £28 million allocated in grants under the transport supplementary grant.

My hon. Friend referred in his speech to the port of Liverpool. A healthy port contributes, of course, to the local economy. The port exists to handle freight and passenger traffic and has to respond to demand. Investment in port facilities has to depend on the demand for port services.

The Mersey Docks and Harbour Company has asked for Government aid for restructuring the port. Although there have been a number of representations in support of that request from hon. Members and others, the Government cannot consider giving special assistance to the port of Liverpool until the Mersey Docks and Harbour Company has provided a detailed assessment of its trading and financial position and prospects. I understand that the company is working on this and may be able to make a submission before very long. I and my right hon. and hon. Friends look forward to receiving that submission.

Our concern for Merseyside's problems should not lead us to talk the area down. I am well aware that by talking about the problems we can sometimes harm an area rather than improve its prospects. I am glad that my hon. Friend the Member for West Derby referred to the brighter, more progressive, more positive side of the case. Certainly, a doom-laden over-pessimistic note can only deter the industry that Merseyside so badly needs.

I have tried to give the figures tonight, but my hon. Friend knows that there have been redundancies. They should not blind us to the significant successes of the area. These have been achieved through such firms as GEC-Fairchild, creating over 1,000 jobs at Neston in the technology of microelectronics, and Ford, which is investing in the United Kingdom some £1,000 million, part of which will fall to its plant at Halewood. I have mentioned GEC-Schreiber, which is creating 1,000 jobs at Runcorn. ICI and Shell have major chemical and petrochemical developments under way at Runcorn, Widnes and Ellesmere Port. UKF fertilisers is investing £25 million at Ince, Cross International is investing £2.6 million at Knowsley and YKK Fasteners is undertaking a continual programme of investment and recruitment at Runcorn. These are helping the Mersey-side economy as a whole, and I know that my hon. Friend will relate those facts back to his constituents.

Given successes of this kind as a foundation on which to build, and given the incentives, the will and the co-operation which I know exist, I believe that Mersey-side can emerge from many of its problems and stand ready to take advantage of an upturn in the national economy. The Government will do all they can to help. I know that my hon. Friend and his constituents want to help. I believe that he has conveyed very accurately their aspirations and hopes for the future. It is in the spirit of that hope for the future that I have been trying to respond. I hope that I have given my hon. Friend some hope and some message that he can take back to his constituents.