§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. MacGregor.]10.49 pm
§ Mr. Robert Atkins (Preston, North)
I wish to bring to the attention of the House a disaster that hit my constituency and the whole town of Preston last Friday, 16 November. On that day the board of Courtaulds announced the proposed closure of the Red Scar mill in Preston, with the effect eventually—after 90 days—of the loss of about 2,600 jobs. About 32 per cent, of the workers who will lose their jobs are of Asian origin. The House will recognise that that fact, added to the general loss of employment caused by the closure, is a matter of considerable concern, and could be long lasting.
In addition to that proposed closure, the Preston area has suffered from the closure of yet another mill—that of A. S. Orr—with the loss of about 800 jobs. Further, it is the intention—I think unanimous—of all parties concerned within the Preston area to close the docks, because of the losses that have been made 1447 there, with a further 400 jobs being at risk. We recently had the announcement of a further 150 jobs being lost as a result of redundancies at Plumbs, the mail order company.
The total effect is the direct loss of 4,000 jobs in recent weeks, or in the near future. The result in terms of dependent companies and industries is perhaps greater than I can depict—it is certainly 5,000 to 6,000 jobs lost.
It must be said that the people who worked in the Courtaulds mill are industrious, and to my knowledge there has never been any criticism of their record of productivity and hard work. Industrial relations have been very good.
The process involved at the Red Scar mill is twofold: the production of industrial yarn—viscose yarn—and textile yarn. The industrial yarn, which comprises about half of the operation, is used specifically for tyres. I do not have to remind hon. Members that tyres last much longer than they did years ago, sometimes giving twice or even three times the mileage. Consequently, less of the yarn used in their construction is required. Moreover, steel cord is more often used. Added to that is the increased import of foreign cars, with tyres also made abroad.
The process has been losing substantial amounts of money over the years, and I think it is generally accepted in Preston and the company, and by people who are familiar with the process, that it is a declining, perhaps a dying, operation. However, textile yarn production is a different story.
I take a different attitude from that of Courtaulds in relation to this aspect. The trade unions in the Preston area and in the mill believe that the technology used in the operation must be maintained. I hope that in due course a delegation that I intend to bring to meet Ministers to discuss the problem will make that point strongly and forcefully.
In addition to support from the trade unions, I have received in recent days letters from senior managers at Courtaulds, telling me of their expert opinion as to the viability of the textile yarn process. I can do no better than to quote from some of their remarks. I repeat that they are senior managers, people involved in day-to-day activities at the mill. They are all constituents.
1448 One manager says:There remains a strong body of opinion amongst senior management that we should be given an extended opportunity to operate a textile factory and to prepare the ground for capital investment in new machinery with a known work force. We could yet find a successful future contributing more than the £l5 million worth of goods now being exported, all of which we will lose if the plant closes.Another letter states:A recent digest of news and information issued by the company"—Courtaulds itself—forecast that demand for our textile yarn world wide would decline from 410 million metric tonnes in 1985 to 390 million tonnes in 1990.My correspondent says:This is a negligible fall spread over the next decade.He goes on to say:Our home trade customers will have no other source of supply in the United Kingdom. They will therefore be compelled to buy their yarns from abroad, adding further to our balance of payments deficit and causing our foreign competitors to laugh all the way to their banks.My correspondent also complains of the attitude of Courtaulds and maintains that little of the profit that has been made in this textile yarn operation has been put back into keeping Red Scar up to date.
Another correspondent adds that this particular textile processis selling all it can make at a profit. Our only embarrassment is that we cannot make even more.Finally, in this context, a letter from another constituent emphasises:I believe Red Scar has an excellent record in the world's export markets, topping £15 million annually. If production at Red Scar ceases, the country would lose the benefits of these exports and would also have to cope with imports of rayon yarn from foreign manufacturers supplying our home trade markets which Red Scar now supplies—all this with a detrimental effect to our balance of payments.He quotes an article in the Daily Telegraph as saying:When the textile cycle turns decisively for the better, accumulation of shares in this field will have proved to have been the right decision.Those are the views of my constituents—senior managers and those involved in the trade unions—working at the mill. All believe that the textile yarn operation is worthy of further investigation and 1449 capable of retention, albeit in a reduced form.
I must emphasise, and I hope that the Minister will bear in mind, the views of senior managers and trade union leaders, and of people in the town. The senior managers to whom I have referred and who have written to me are presenting to the board for further consideration proposals that they have formulated on the possibility of retaining some reduced operation.
All is not yet lost. This mill is an important one within the town of Preston. Apart from local government, the mill, in industrial terms, is the second largest employer in Preston. It has a part to play. If the mill had to close, the site on which it is based is a prime site—adjacent to the M6 motorway, and close to Preston with its motorway and railway facilities—that would be of benefit to any potential employer. I should like to know whether some kind of operation can be retained. If that is not possible—and I am not yet convinced it is not—we may need to examine an alternative. That alternative will need the assistance of the Government and various other organisations that can help.
I must say that I have not been over-impressed at the way in which Courtaulds has behaved over the closure. One of my correspondents—a senior manager—who knows more about the day-to-day activities than myself believes there has been a lack of reinvestment by Courtaulds of the profits made at Red Scar.
I understand from Ministers at the Department of Employment that little notice was given of this proposed closure—literally a few hours—which is not usually the convention with such a major closure. I have written to the chairman of Courtaulds—I hope that he will heed it—saying that if closure goes through, and even if it does not, if it results in some people being unemployed in part, those concerned should be given generous severance pay because their record of hard work in the industry deserves it.
I am asking the Minister to consider two main points. First, when the delegation comes to meet him and the Under-Secretary of State for Employment, I hope that he will listen to it. It comprises leaders of the unions, representatives 1450 of the borough council, on both sides, as well as the officers and the chairman of the central Lancashire new town development corporation, who is so closely involved in all that affects the Preston area. I hope that the Minister will listen to the case for partial, as opposed to total, closure, and particularly the possible retention of the textile yarn operation. The technology can be valuable to this country. Courtaulds is unique in this field, and if it closes no other mill will be capable of supplying this yarn. The effect, particularly upon our imports and thus on our balance of payments, could be serious. The Government need to consider this.
Secondly, the effects of all these unemployed people being put on the employment market will raise unemployment in Preston to nearly 8 per cent. In that circumstance, the case for development area status is overwhelming. I subscribe strongly to the belief that if subsidies are spread thinly, those who need them do not get enough. I support the Government's policy of attracting aid to areas which need it particularly. This is a case in point. Preston needs this status, albeit for a short period to allow the aid to act as a primer to replace the jobs and the industry that will be lost if the closure, wholly or partly, goes ahead.
§ Mr. John Patten (Oxford)
I realise that my hon. Friend is discussing a serious point of great importance to his constituency, and I should be the last to attempt to introduce party political points when the fate of a large number of those employed in Preston is involved, but does he not find it surprising that the hon. Member for Preston, South (Mr. Thorne) is not present—nor any other Labour Members? I wonder what conclusions he draws from that.
§ Mr. Atkins
I am grateful for that intervention. It is indeed sad that, on a matter so serious to Preston and the North-West generally, not one Labour Member is present. I hope that the people of Preston will notice that fact and draw the necessary conclusions.
As I say, Preston needs development area status. The people are particularly fortunate in their borough council, which has the lowest rates of any borough council in Lancashire—a result of three years 1451 of Conservative control. People are consequently prepared to come to Preston.
In addition, the central Lancashire new town development corporation, chaired so ably by the former Member for Clitheroe, Sir Frank Pearson, gives much help to Preston and the neighbouring towns of Chorley and Leyland. In that context it has indicated its concern and how much it wishes to assist the borough council and the Government with plans to help Preston in this difficult time.
This is a savage blow to my constituency and to Preston generally. With the Prestonians' initiative, history of hard work and industry, and commitment to achieve success in whatever field they turn their hands, I do not believe that all is lost. The mill can in part be retained or restored, particularly for textile yarns. If either of those options fail—and I would need proof that they will—we can redevelop the site to the benefit of Preston and the area as a whole.
I ask the Government to give urgent and compassionate consideration to those two points. They should meet the delegation and hear its case, and give urgent consideration to granting Preston development area status in the short or long-term. We need only temporary help. I am sure that the Minister will look kindly on Preston's problems in the short term and give us the assistance that we need.
§ 11.6 pm
§ The Under-Secretary of State for Industry (Mr. David Mitchell)
I congratulate my hon. Friend the Member for Preston, North (Mr. Atkins) on securing the debate and on his energy and powerful advocacy on behalf of his constituents, which has resulted in his being able to raise the matter in this House so soon after the announcement of closure only 10 days ago.
§ Mr. Mitchell
It is a pity that, on a matter of such great importance to the area, the interest of Labour Members is shown by the array of empty Benches. However, it is late at night and is a matter for them.
I join my hon. Friend the Member for Preston, North in genuinely expressing sympathy for those who are to lose their jobs and the whole community affected 1452 by the closure, which comes on top of the closure of the A. S. Orr textile mill at Bamber Bridge and the rundown of Preston docks.
My hon. Friend used the word "disaster", and it is a disaster for the local community. However, we have to face realities, uncomfortable though they may be to live with. There is surplus capacity throughout Europe in viscous cord yarn used for tyres. Tyres now last longer, yarn is being replaced by steel and there are other technical changes. The market is shrinking, and no British Government can create demand where none exists. It would not be right for the Government to seek to prop up that part of the business carried out at the mill where there is no long-term future.
The problem is exacerbated by the fact that the proportion of cars imported from abroad has substantially increased. That has a direct impact on companies whose main life is in supplying the British car industry. The figures show the penetration of imported cars into the United Kingdom. In 1974 that represented 30 per cent.. By 1978 it had risen to no less than 56 per cent. The tyres are imported "on the hoof"—on the car as it arrives—and part of the market is therefore closed to the British producer.
There is the tragedy of the British motor car industry itself. The potential market should have been greater, but the fall in passenger car production in Britain between 1976 and 1978 was no less than 110,000 From the first 10 months of this year it appears that the accelerating decline will continue and that there will be about 180,000 fewer passenger cars than there should have been.
The Red Scar mill was greatly tied to the success of the British tyre-making industry. My hon. Friend made important points about the possibility of producing rayon filament fibre—not staple fibre—which has been produced in the factory since 1939. To some extent, it has been superseded in the market for suit linings by nylon and acetate. The market is changing, and that presents difficulties. However, my hon. Friend claimed that the production is viable. He quoted letters from senior managers who claim that the company makes a profit from that production.
My hon. Friend should not overlook the problem facing a factory when half 1453 its overheads are carried on another product. If it closes down the other product, the whole of the overheads land on the one product and it may not be as profitable as formerly. It could be driven to the point where it is not profitable. My hon. Friend has made a significant case, backed by the views of his constituents and the consultation that he has made. He must explore with the company the possibility of further limited production. No doubt if it is viable the company will be in business to make a profit. Alternatively, others may want to take over the site and carry on production. I notice that my hon. Friend is to bring a deputation to the Department of Industry, and we shall explore the possibility of partial production being continued. My right hon. Friend the Secretary of State will listen with great care to what is said.
My hon. Friend raises the question whether Preston should become an assisted area. We have embarked on a policy of seeking to concentrate assistance, under our assisted area programme, on areas of highest unemployment and greatest need. The policy has been in operation since 1930, yet there still persists in those areas which were worst hit by unemployment in the 1930s long-term structural persistent unemployment. There are 40,000 unemployed in Newcastle and Hartlepool, and there is massive unemployment on Merseyside. If we are to resolve the problems of the special development areas we must concentrate the assistance on the areas of greatest need and not spread it thinly around the country. It is against that background that I must ask myself whether there is a valid case for saying that Preston should have greater assistance than is accorded to it.
In October 1979 the Preston travel-to-work area had 5.1 per cent, unemployed. In Great Britain as a whole there was an unemployment rate of 5.5 per cent. Therefore, the rate at Preston is better than the national average. That is the position before the closures take effect, and before that happens there can be no conceivable case for other areas that are worse off being invited to help to give Preston a higher degree of assisted area status.
Let us consider the numbers that will be unemployed because of the closures. At Courtaulds at Red Scar there will be 1454 2,600. We have had the Carrington Viyella mill closure, where 806 have been made unemployed. At Coppulls 266 will be unemployed. The total is 3,672. As my hon. Friend said, 350 men have been made unemployed at the port. However, that will take place over a period. The basic total is 3,600. That lifts the percentage of unemployment to 7.6 per cent. That is not sufficient to make Preston an enhanced assisted area as my hon. Friend asks.
§ Mr. Robert Atkins
Is my hon. Friend aware that Scarborough and Whitby have levels of unemployment of about 5 per cent, and have development area status?
§ Mr. Mitchell
I am sorry that my hon. Friend is misinformed. The problem at Whitby is that unemployment in October was 10.8 per cent. Whitby is not comparable with Preston.
We recognise my hon. Friend's concern. We are joining him in being worried about Preston. We shall consider any further representations that he wishes to make on assisted area status. However, we must ascertain whether there is any change in the relative position of Preston compared with the present figures, and whether the situation will become as serious as my hon. Friend fears with the passage of time. If there is a change in the relative position of Preston, we shall be prepared to reconsider whether the assisted area status should decline from intermediate area status to non-assisted area status in 1982. In the meantime I must tell my hon. Friend that section 7 assistance under the Industry Act, in accordance with the new criteria laid down by the Secretary of State in the summer, will be available until 1982 for viable projects that will benefit employment in terms of projects but which, without section 7 assistance, would not go ahead.
If I have not been able to meet my hon. Friend's requests in the form in which he has made them, I assure him that we shall meet the delegation from his constituency and hear its case. We shall consider the case in depth. We shall be much the better able to do that because of the way in which he has deployed the case in this Adjournment debate. He has enabled us to have advance notice of the matters that he wishes us to consider more closely. I 1455 accept that it is a serious matter. The Government are deeply concerned about those who will lose their jobs—
§ The Question having been proposed after Ten o'clock and the debate having 1456 continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at nineteen minutes past Eleven o'clock.