NORTH-WEST ENGLAND

HC Deb 21 April 1980 vol 983 cc35-104

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

Mr. Speaker

I remind the House that the two important debates on which we are about to embark are both abbreviated. I hope that hon. Members who are called will bear that in mind.

3.52 pm

Mr. Frank R. White (Bury and Radcliffe)

It is a privilege to open this debate on the problems of the North-West region. But I can assure the House that there will be very little pleasure gained by cataloguing our needs and the Government's apparent inability to respond to them.

The North-West region consists of the counties of Lancashire, Cheshire, Greater Manchester and Merseyside. It has a population of about 6.5 million, giving a population density of 889 people per square kilometre, the highest regional density in Great Britain, and Merseyside county's population density of 2,385 persons per square kilometre is exceeded only by that of London.

To many people, the North-West is epitomised by clogs, cobbled streets and factory chimneys—the land of Ena Sharpies and endless Coronation Streets. They are there all right, as well as the warmth of community character and the homeliness and friendliness that they represent. We have industrial dereliction, but we also have some of the finest natural resources in the country, and our region can match most others in scenic beauty, from Pennine hillside to coastal plain, and we can boast a range of sporting and cultural activities that cannot be exceeded in their quality.

But, of course, we are rightly viewed as one of the centres of the Industrial Revolution. Last Friday, I had the opportunity to address the annual conference of the Amalgamated Textile Workers' Union at Blackpool. It is a union that in its 1925 heyday represented nearly 300,000 textile operatives in Lancashire but whose membership is now, regrettably, reduced to a mere 48,000. We have had a loss of jobs in this industry of more than 10,000 per year for each of the past 15 years, and the uncontrolled and seemingly unconcerned contraction of this industry is a concern to the North-West extending far wider than textiles.

Other hon. Members will wish to expand on these problems. But it must be said that industry in the North-West looks to the Government for a more positive policy than the one extended at present to the textile industry.

As a forerunner of the Industrial Revolution, our region's plant and equipment is older than most. Therefore, the regeneration of the industrial base of the region is our highest priority. Textiles, footwear and leather, paper, engineering and the unplanned fabric of society that emerged as these industries grew all require a degree of investment that will not be forthcoming from the private sector. I say that with confidence for, in the past, the Manchester Free Traders failed, the Governments of the 1950s controlled by the Conservative Party failed, and the Conservative Government of 1970–74 failed. All failed to obtain for the North-West the transfusion needed so desperately for us to build anew.

Our present needs cannot be fobbed off with some Conservative Central Office clichés such as "restoring incentives" or "re-establishing self-help" or by letting so-called dying industries go down the plug hole on the basis that new ones somehow will take their place—from where and by whom we know not. The Conservative Party really ought to talk to the sharp end of industry—to the plant managers, the sales managers and the marketing men. The Government should ask them which other country in the Western world is embarking on this lunacy of free market forces and non-Government involvement. Our international competitors are laughing at us all the way to our own dole queues and bankruptcy courts.

Every other trading nation gives its industries support. The Government ought to ask the salesmen who go out selling exports and the marketing men who explore new export markets what tricks French, German and American companies get up to with their own Governments. It seems that we alone are intent on this lemming-like attitude of self-inflicted industrial suicide, and the fall guys for this policy are to be our industrial regions, including the North-West.

The region deserves better treatment than this, especially from this Government. It deserves it if for no other reason than the past wealth generated in the North-West, which has never been fairly reinvested back into the region but has gone outside to create standards of life for people in other regions that we in the North-West are now denied.

The North-West region accounts for 11.3 per cent. of the United Kingdom's gross national product. Our industries contribute on a massive scale to the nation's exports. Last year, textiles alone contributed £1,700 million to exports, and the Government's treatment of the region's greater potential is to launch an attack on the region that can only be described as an economic blitzkreig. Slashing to the left and slashing to the right like some latter-day Lord Cardigan—and he had the wrong policy at Balaclava—the Secretary of State for Industry has removed intermediate area assistance from 21 travel-to-work areas in the region. The working population in assisted areas will drop from 70.1 per cent., which was Labour's recognition of the problem, to 6.6 per cent. under the present Government.

Still reeling from this type of attack, the region suffers further from the attentions of the twin-headed dragon—the Secretaries of State for the Environment and for Employment. One is wet and the other is hot. It is easy to tell the difference. The one takes away opportunities for the training and retraining of our work force. The other ensures by his public expenditure cuts that life in the region will be as unbearable as possible, with local authority services cut to the bone and those in need suffering the utmost deprivation.

Right hon. and hon. Members may feel that these words are over-emotional. But they do little to emphasise our problems. We in the North-West have the third highest infant mortality rate and the second highest death rate, and our female life expectancy is the lowest in the country. The number of general practitioners working in the region is below the national average, as are the numbers of dentists and available hospital beds. Health Service expenditure in the North-West averages about £115 per head. In the Thames region it is £139. That means that annually the North-West falls behind the Thames region to the tune of £120 million.

I do not suggest that the Thames region should take a cut. I have no doubt that it has its problems. But under the Labour Government's policy of implementing the resource allocation working party's report, we were led to believe and were assured by Ministers that within a 10-year period the North-West would achieve comparability with the Thames region. The recent public expenditure cutbacks in the Health Service have put the North-West back 30 years. That is unacceptable.

Mrs. Elaine Kellett-Bowman (Lancaster) rose——

Mr. White

The hon. Lady can make her own comment if she catches Mr. Speaker's eye. My hon. Friends are also waiting to speak.

The Health Service situation is unaceptable. Some of our people will die before they receive the basic service now extended to people in many other parts of the country. In education, the region has the third highest pupil-teacher ratio and the third lowest expenditure per pupil.

In many other instances—I am sure that my hon. Friends will elucidate them to the House—the material quality of life experienced in the North-West falls behind the services enjoyed by other regions. It is a wonder that the tolerance and the good humour of the region's people have not been broken before now. I feel bound to warn the Government that their actions over the past 11 months have stretched the tolerance of the most moderate.

What can a person do when he is denied a job? There are 212,000 unemployed at present and the region has one of the highest unemployment vacancy ratios in the country, at 12.7 per cent. The industries in which people have given a lifetime of service are being decimated by this Government's action, or lack of it. Their representatives in the trade union movement are denied any dialogue to represent their views with the Government, or are permitted a dialogue only under the most grovelling of terms. All this would be bad enough. But, on top, their rent and rates are forced up. They are paying prescription charges that have increased 500 per cent. in 11 months. Their children suffer school meal price increases, and their elderly parents are denied the human dignity in their old age for which all have fought.

Almost everything for which the typical moderate, industrious North-West person has worked all his life is now being attacked and eroded. For what purpose? It is so that the Government can indulge themselves in free marketeerism and a transfer of wealth to pay off the affluent.

I have to tell the Prime Minister that she and her Government are playing a dangerous game. They are pushing people too far and, in so doing, nurturing the seeds of disruption.

This debate takes place on a motion for the Adjournment of the House. Out of consideration to my hon. Friends and to Conservative Members who wish to contribute, I shall leave my hon. Friends to expand and develop the arguments that have been raised. I am sure that the Opposition would have preferred a more substantial motion. In asking my hon. Friends not to divide the House, out of consideration for our Yorkshire colleagues, whose debate follows ours, I assure them that the Government will receive the censure motion they richly deserve. That will take place on Thursday 1 May, when the industrial regions of this country, prominently led by the North-West, will vote against the reckless folly that is being perpetrated against them.

The Prime Minister said recently, in an analogy, that it was foolish to change a course of treatment because everyone felt ill after a major operation. On 1 May, the message is clear. The North-West is receiving the wrong treatment, in the wrong hospital and, above all, from the wrong doctor.

4.3 pm

Sir Walter Clegg (North Fylde)

It is a pleasure for me to welcome to the Opposition Dispatch Box the hon. Member for Bury and Radcliffe (Mr. White), whom I find very agreeable. However, I did not find his speech today agreeable. His remarks were a gross exaggeration of the problems faced in the North-West. I do not believe that this debate has done the North-West any good.

The hon. Member seemed to imply that the problems of the North-West suddenly arose when a Conservative Government were elected to power last May. He also implied that the North-West suffered only under a Tory Government. It is about time that he and other Opposition Members began to realise that they have a great responsibility. Many Labour councils in the North-West have a responsibility. It is true that there are problems in the North-West. We get nowhere by complaining in the manner of the hon. Gentleman.

The hon. Gentleman complains that under a Tory Government unemployment has risen. But it increased under his own Government. Where was his voice then? Where were the censure motions? Under the Labour Government, unemployment in the North-West doubled. I took the hon. Gentleman's speech to be a plea for more Government aid for the region. We should realise that Government financial help is not in itself the solution.

Mr. John Evans (Newton)

Will the hon. Gentleman tell the House that his constituency, unlike mine and many of those of my hon. Friends, did not lose its assisted area status during the review? Was that not a question of political rather than economic consideration?

Sir W. Clegg

It was most certainly not that. The hon. Gentleman will find, if he looks at the statistics, that there is a high and continuing rate of unemployment in the Fylde area. The hon. Gentleman should also study the situation in the adjoining area of Wigan, which was given development area status under the Conservative Government—a status denied by the Labour Government when they were in office. If hon. Members believe that pouring in Government money can solve the problems of the North-West, they will believe anything. The facts show it is not true.

Hon. Members should consider the help that has been made available, both in the past and now, to Merseyside. That has not solved Merseyside's problems. It cannot do so. The policy of the Conservative Government in setting industry free through new enterprise zones in the North-West will have far greater effect than pouring in Government money in subsidy after subsidy. Those who pay the subsidies are the business men who are themselves in difficulties in the North-West.

Mr. Jack Straw (Blackburn)

The hon. Gentleman condemns Government assistance for the North-West. Is he proposing that such aid should be ended for the Fylde area?

Sir W. Clegg

Not in the least. I will give the hon. Gentleman my explanation. There is a case for Government help. But there is no case for saying that Government help is the only answer to our problems. The ability of the Northwest to compete and the ability of its small industries to expand is the key to the situation. This has been seen. There are some forms of Government aid that I welcome. Those of us who live and work in the North-West know that the advance factories introduced under the previous Government have been a major success. That is especially true of the small factories. They are taken up, in my constituency, almost as soon as they are off the planning board. This process helps. It does no good, however, to portray the North-West as a downtrodden area. How can people be persuaded to come to the area if we are constantly decrying ourselves?

Mr. Robert Kilroy-Silk (Ormskirk)rose——

Sir W. Clegg

I do not think I shall give way. Many hon. Members wish to speak. I promised Mr. Speaker that if I caught his eye I would be brief.

The hon. Member for Bury and Radcliffe attacked the actions of the Conservative Government in the North-West. I suggest that Opposition Members should ensure that Labour local authorities in the North-West look after their expenditure and avoid rate rises. One factor stopping people from coming to the North-West is high rates. The higher rates rise, the worse the situation becomes. I also dispute what the hon. Gentleman said about talent in the area. If, with the help of the Government, that talent can be liberated, we shall succeed, but not if we continue to rely entirely on Government handouts.

4.10 pm

Mr. James A. Dunn (Liverpool, Kirkdale)

In following the hon. Member for Blackpool, South—[Hon. Members: "North Fylde".] Well, the names change so rapidly. I do not share the views of the hon. Member for North Fylde (Sir W. Clegg). Indeed, I take a different view. I believe that what is happening in the North-West ought to be highlighted in order to give the Government some opportunity to rethink their programme and to re-evaluate what is happening there because of the effect and immediate impact of their policy.

Merseyside is an area in the North-West conurbation which is suffering gravely from rising unemployment. The rate of increase is alarming. In particular, youth employment is suffering greatly. Every day, each of the constituencies on Merseyside is reporting not only redundancy but a loss of jobs, which may not return for years to come. The Government's present policies, coupled with high inflation and high interest rates, are not assisting small businesses to relocate and to take up the slack which has been caused by large-scale industry diversifying its production and manufacturing standards. There is no way in which that can be done without a reappraisal and a change of Government policy.

One of the major difficulties affecting Merseyside at present is that employment programmes, especially youth employment programmes, are severely restricted and curtailed and in some instances reduced. The impact and effect will be long felt. Indeed, some young people have been on the unemployment register for more than 18 months. It looks as though the future will be very bleak. Vocational and educational courses have been restricted, and the colleges of further education are feeling the impact almost immediately. The special temporary employment programmes have not eased the situation. There must be some review and reversal of that policy if the trend of youth unemployment in the area is to be reversed.

I welcomed the announcement of the establishment of the Liverpool inner city partnership scheme. I have carefully followed some of the announcements that have been made by the partnership committee. I note that it talked in terms of resources being made available, that the programme would be far-reaching and that it would cover every aspect of family life in the area, ranging from the environment, housing, domestic and social services to employment. But I have yet to see any tangible evidence that the Government intend to make the inner city partnership programme a realistic activity.

Mr. Anthony Steen (Liverpool, Wavertree)

Does the hon. Gentleman agree that the curious thing about the partnership scheme is that it excludes private industry, members of the community and private enterprise? It is solely a Government machine, comprising central Government, local government and the health authority. Does not the hon. Gentleman agree that the public sector alone will not revive the inner areas?

Mr. Dunn

No, I do not agree. There is ample opportunity for a further extention of the partnership schemes to include the very categories which the hon. Gentleman has mentioned. However, until one is successful, it would be foolish to transfer and revamp that system. I want to see something tangible, but, unfortunately, I have not seen that yet. It has been my experience that private industry has failed Merseyside. Opportunities were made available long before the introduction of the partnership scheme. That failure is marked on the memories and minds of my constituents, and I am sure that the hon. Gentleman must receive similar reports from his own constituency.

The urban development corporation is also a Government-inspired body, but as yet nothing tangible has resulted. No resources of any substance have been made available to the corporation. Reference has been made to free enterprise zones. What is free about them? All that will happen is that there will be less restriction on customs and on local authority legislation, development and planning. Those are the only benefits which will be enjoyed by the free enterprise zones, but at what cost? What will probably happen is that many existing industries which are now located outside the zones will be clamouring to book a place to get inside them, with no consequential benefits to anyone in the area.

I do not say that we should not try free enterprise zones, but if they are brought into being they should be carefully monitored. There should be no exploitation. Existing legislation should be applied. Protection for those who will be employed within the zones should be assured, and the zones should not result in the creation of mini-Hong Kongs or Taiwans, which is what the entrepreneurs think will happen when they are eventually declared. I am sure that the hon. Member for Liverpool, Wavertree (Mr. Steen) will join me in objecting if that happens.

Anxiety and concern are now being expressed about the free enterprise zones, not least by those whom the hon. Gentleman claims have been overlooked in the inner city partnership scheme—small industries and private individuals who want to invest on Merseyside. At present, aid is urgently and badly needed in respect of the port and docks. Last week, private legislation went through the House which, in effect, gives financial support to other ports, particularly the port of London. Yet when Merseyside, Liverpool and Manchester are involved—Merseyside is the gateway to the Manchester docks—no immediate response comes from the Government to give financial support in those difficult circumstances. There is no promise that that will be considered with any sympathy or favour. Yet when the same problem occurs elsewhere there is an immediate clamour for support.

I believe that Merseyside has suffered grievously from the recent public expenditure cutbacks. The employment programmes have been seriously jeopardised. The construction and building industry has been seriously affected. The total programme for the inner city partnership scheme needs complete revision if Merseyside is to receive any benefit. Merseyside does not require sympathy. It requires action. Private industry has never been able to fulfil the needs and requirements of the area. Unless the Government reverse the present trend as well as their policy, the impact on Merseyside will be grievous and job losses and unemployment will rise even higher than they are in the alarming situation that I have presented to the House.

4.18 pm

Mrs. Elaine Kellett-Bowman (Lancaster)

While congratulating the hon. Member for Bury and Radcliffe (Mr. White) on his elevation to the Opposition Front Bench, I am bound to say that I wish that he had made a better fist of it in his first speech. If we want industry to come to the North-West, the very last thing we want to do is to perpetuate the Ena Sharpies image, as the hon. Gentleman did, for which my hon. Friend the Member for North Fylde (Sir W. Clegg) rightly chastised him.

We all agree that there is no disputing the fact that for many years the Northwest has been starved of resources compared with both the more prosperous South-East and, latterly, under the Labour Government—the hon. Gentleman cannot dispute these facts—the more politically sensitive areas of Scotland and Wales, without whose votes there would never be another Labour Government in this country. Unemployment in the area has consistently been above the national average, and it got steadily worse during the period of Socialist rule. As my hon. Friend said, it more than doubled and in my constituency it trebled. What was even worse was that the ratio of unemployment to job vacancies was higher in the North-West than anywhere else.

In my constituency the figure was not 12.7 per cent. It was 32.7 per cent. under the Labour Government. So concerned were the Conservative MPs in the North-West in the middle of 1976 that we undertook a study of the problems of the area. We concentrated our attention on small firms. We did that, first, because such firms were of overriding importance to the region. In the early part of the decade an average of 85 per cent. of all manufacturing firms in the North-West were small by the Bolton committee definition of firms employing fewer than 200 people. In the North-West, on average, 30 per cent. of all employment is in small firms. In constituencies such as mine and that of my hon. Friend the Member for North Fylde it is more substantial than that.

We concentrated on small firms, secondly, because they have a relatively greater impact on lowering unemployment when there is an upturn in the economy. Small firms cannot afford to hoard labour in the bad times and they are more flexible and quicker off the mark to take advantage of new opportunities when they crop up.

Firms whose views we sought complained of unnecessary and time-consuming form filling, the paralysing effect of the so-called Employment Protection Act 1975—the firms always referred to that Act as the "Employment Destruction Act"—the disincentive effect of the highest starting rate for income tax in the whole world, the break-up of family businesses caused by capital transfer tax biting at a low level, the lower starting point of VAT and the crippling burden of public expenditure. Those were the reactions we experienced from both sides of industry—from trade unions and employers.

All these deterrents to small industries have to be tackled. Most of them have been tackled in our two Budgets and other measures that have been brought forward in parallel. It is no mean achievement for the Under-Secretary of State—who I am happy to see is with us today—to have lightened the inherited bureaucratic burden on small industries by abolishing approximately half a ton of the forms that those industries previously had to fill in.

It was a bold and absolutely necessary move on the part of the Chancellor of the Exchequer to slash the standard rate to 30p and the top rate of tax to the level that obtains in the rest of the Western world. Had my right hon. and learned Friend not done that we would have been unable to prevent the drift of skilled workers and managers abroad.

The provisions in the Budget to help the establishment and expansion and handing on of small firms by raising the limit of capital transfer tax—attracting money to those firms and encouraging the building of small workshop-type factories—are the best tonic we could have had.

On the face of it, in Lancaster we should be on our uppers. In the past 10 years we had had no fewer than 2,604 redundancies and when the new regional boundaries were being drawn our unemployment rate was well over 6 per cent. That is why we retained our intermediate area status. Over the past several months one of our most important employers, Storley Bros., declared, first, 160 workers and then 52 workers redundant.—[Interruption.] The hon. Member for Newton (Mr. Evans) is merely pointing out that my constituency has an effective Member and his has not. Despite those redundancies, our unemployment rate will still be below what it was a year ago. I am convinced that this is because we have bent over backwards to attract small firms by providing tiny, seed-bed factories—the council provided them—at rents which a man and wife starting up an industry could afford.

Many of those small firms are now at the point of take-off and the Budget measures will help them to expand. However, I am bound to admit that a substantial and widespread take-off is unlikely until interest rates come down. But many firms are still adversely affected—on this point I agree with the hon. Member for Bury and Radcliffe—by unfair imports from the United States. A close monitoring of these imports is essential, particularly in relation to the footwear and textile industries which are also hit by dumped imports from Eastern European countries which will send goods over here at any price in order to obtain hard currency.

The European regional fund and the European Investment Bank have greatly assisted the North-West over the past few years and I am sorry that the hon. Member for Newton has left his place. The European regional fund has given huge grants to local authorities for infrastructure projects and we in Lancaster and Morecambe have been lucky in receiving large grants for tourist infrastructure projects. Those grants have helped to keep down the rates. As my hon. Friend the Member for North Fylde pointed out, high rates are a deterrent to industrial expansion.

The European Investment Bank has been of great assistance in lending money at cheap fixed interest rates, thus enabling industry to plan investment programmes with greater certainty. We in Lancaster and Morecambe are grateful along with my hon. Friends the Members for North Fylde, for Blackpool, South (Mr. Blaker) and my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell) in that we are to retain our assisted area status. However, the loss of that status to large areas of the North-West will adversely affect us all by cutting down our access to the European regional fund and to the European Investment Bank. We will be affected overall as a county.

I hope that when the regional fund regulations are revised a way will be found to enable particular black spots in the North-West to continue to receive help through schemes which are vitally important to the whole region. This applies particularly to infrastructure projects, the need for which goes across boundaries.

However, all too often people think of deprivation purely in urban terms. Over the past few years a sustained attack has been made under the Labour Government on the viability of our rural areas. Village schools have been closed, transport has been restricted, the rate support grant has been unfairly distributed—nobody can deny that because it is a statistical fact—and agriculture, which is still the mainstay of our villages, has been put at a serious disadvantage compared with our Continental neighbours. Under my right hon. Friend that has now been almost remedied.

National and local government, voluntary bodies and individuals who really care about the maintenance of the rural way of life must work closer together if that way of life is to survive as a coherent reality. The East Fellside project in Cumbria—which seeks to harness the experience and enthusiasm of all those who care about our rural areas—should make a valuable contribution, and act as a prototype for other areas.

Mr. Frank R. White rose——

Mrs. Kellett-Bowman

I will not give way, for the simple reason that the hon. Member did not give way to me. Fan-is fair. One thing that is of enormous importance to country areas is their determination not to become dormitory areas for urban workers. In their battle to establish and preserve small industries in rural areas those areas have been greatly helped by COSIRA. We were delighted when COSIRA decided to build factories in the valliages of Halton and Glagate and we were flabbergasted when planning permission for those factories was refused by the Department of the Environment on the remarkable grounds that the workers in those villages could obtain work in Lancaster. Surely, that is exactly what COSIRA was set up to prevent. I would, therefore, be grateful if my hon. Friend would persuade his hon. Friend to reverse that most unfortunate decision.

All is not well in the North-West and I am the last person to pretend that it is. Neither is all ill in the region. We have some of the loveliest countryside, we have the most industrious and adaptable work force, we have the best communications and the sturdiest independence—particularly among Conservative-minded thinkers—of any region in the United Kingdom. We should be producing documents such as the spring edition of "North-West Success", which proclaims that the North-West is setting the pace in the chip revolution. That and another booklet "The success of overseas industry in the North-West" and yet another "North-West England—Centre for International Industry" are what we should be publicising. We should blow our own trumpet. If we capitalise on our undoubted advantages I believe that the North-West will once more be a pacesetter and will help to lead the country back to prosperity.

4.29 pm

Mr. Kenneth Marks (Manchester, Gorton)

I was interested in the comments of the hon. Member for Lancaster (Mrs. Kellett-Bowman). She must have missed our debates on rural post offices and school transport if she thinks that the Government will do any good for rural areas.

The hon. Lady's sole tribute to the Under-Secretary was that firms are filling in fewer forms since he was appointed, but some of those forms were applications for Government assistance which had been most valuable to many firms in the North-West, but which they have now lost.

I congratulate my hon. Friend the Member for Bury and Radcliffe (Mr. White) on his opening speech. We were delighted that he combined a comprehensive speech with a brief one and gave more of us the opportunity to speak. My hon. Friend is not a newcomer to the Front Bench. He spent some time in government as a silent member of the Front Bench when he was Whip. It was a great loss to us that he was prevented from speaking during that period, but his success in the general election showed that he had done a tremendous amount of work for his constituency.

My hon. Friend mentioned industry, which is the main issue with which we are concerned, but he also referred to health matters and the way in which the North-West is being neglected and will be neglected if the Government stay in office.

My hon. Friend also referred to young families and the difficulties that they face, not only in the North-West but in the rest of the country. On Thursday, the Prime Minister said that we had had an increase in our standard of living of 6 per cent. in the past 12 months. I am sure that the nation was delighted to hear that, but her claim does not apply to families with young children in the North-West or even in the prosperous South-East. They have had to bear more than their fair share of the sacrifices that the Government have demanded.

The hon. Member for North Fylde (Sir W. Clegg) talked about pouring in Government money. It is not simply a question of money, though some of the bodies that the hon. Member for Lancaster was talking about—for example, the development commission and CoSIRA—which have helped so much, involve Government money. The previous Labour Government increased the amount of money that was available and I am sure that the hon. Lady would like to see it increased further.

We also have to consider whether the Civil Service should be dispersed. Fylde and Blackpool have done well out of Civil Service dispersal, but the Government are stopping the process. It is not good enough to have administrative jobs and technical jobs and industry concentrated in the South-East.

The improvement of derelict land is in danger because of the loss of assisted area status. No decision has yet been made, but that danger is one of the problems facing the North-West.

My hon. Friend the Member for Bury and Radcliffe referred to textiles. The carpet industry is suffering particularly badly, not only because of the oil policies of the Canadian and American Governments, but partly because of an import quota on fibres, so that our industry cannot get fibres at a relatively low cost, and partly because there is no quota on the American fibres.

I hope that the Under-Secretary who is to reply will ensure, with the assistance of the Department of Trade, that when firms such as Lancaster Carpets are suffering from American competition they should at least have the opportunity to get the fibres to enable them to compete.

I want to mention some educational matters, because education is the basis of many of our problems in the Northwest. The Government's policy of reducing grants to overseas students and making them pay the full rate will hit not only overseas students but British students at such institutions as the University of Manchester Institute of Science and Technology, which will have to cut the number of its courses, thereby reducing the number of British students.

In our debate on Greater Manchester on 18 January at which we suggested that an education Minister should have been present, we raised the question of the Centre for Educational Disadvantaged. I will not go into the tremendous work that the centre has done, but we were assured that the Secretary of State for Education and Science would be reviewing its future. The centre is due to close on 31 August and it is time that something was done about it.

The city authorities that have child populations that are rapidly reducing will be in the most difficulty because of the Government's education cuts. When there is a declining school population, it is not enough merely to maintain the teacher-pupil ratio, because that can lead to a loss of subjects taught and the loss of the complete timetable of some schools.

The conscientious councillors in some authorities have been put in a great dilemma. They are harassed by the Secretary of State for the Environment who has threatened that if they spend too much they will have their Government grant cut even further. The Secretary of State's attitude—a combination of bull at a gate and dog in the manger—makes the job of local authorities difficult, and I am not talking only about Labour authorities.

The future of education in Tameside was mentioned during the Greater Manchester debate. Two years ago, Tameside had a Conservative council. Since then, the electors of that borough have elected 30 Labour councillors and seven Conservative councillors, I make no forecasts about what will happen on 1 May, but the result is likely to be along those lines. The new council has been extremely patient. It believed that it had the right to go ahead immediately with a comprehensive scheme, because such a scheme had been accepted by the DES on a previous occasion.

The Council has waited a long time for the decision of the Secretary of State to permit the scheme to go ahead in September. I will not argue the merits of a comprehensive system against a selective system, but it is in the interests of parents, children and the administrators who will have to organise any scheme that is operated this year that a decision should be made soon.

Mr. Tom Pendry (Stalybridge and Hyde)

Does my hon. Friend agree that the attitude of the DES is bordering on the discourteous? On 17 March and 25 March the chairman of the Tameside education authority sent telegrams to the Secretary of State urging him to make a decision. The telegrams were not acknowledged, let alone answered. I sent a letter to the Secretary of State on 19 March and that has not been acknowledged or answered. Does my hon. Friend agree that that does not square with the Secretary of State's assurance to the deputation led by Councillor Roy Oldham in August that there would be a speedy settlement?

Mr. Marks

I wholeheartedly agree with my hon. Friend. We ought to have a decision. There has been too much delay already. Parents are asking what is to happen and the council cannot say either way what route Tameside education will take.

The Government's attacks on local government will stop the industrial reorganisation that is needed. Local government has a tremendous part to play. As the hon. Member for Lancaster said, what local government can do in getting industry into its areas can mean so much. The Government are stopping that.

4.38 pm

Mr. Tom Arnold (Hazel Grove)

In some ways, our debate is a re-run of that which we had in January on the motion of the right hon. Member for Manchester, Ardwick (Mr. Kaufman) on the problems of Greater Manchester. Of course, many of the problems of Greater Manchester are reflected in the problems of the North-West as a whole.

I agree with what my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) said about the paper that Conservative Members in the previous Parliament published about the role of small businesses in the North-West. Most people in the North-West are employed by small to medium sized businesses. When they do well, the economy of the region as a whole does well. The Government are trying to produce a situation in which we increase the profits of those businesses so that we can have fresh investment and new jobs. The North-West needs new jobs more than anything else.

That policy cannot be easily achieved. It is a question of trying to reverse many years of industrial decline. I recognise that the North-West has many great problems in terms of industrial dereliction and obsolescence.

It is a pleasure to have followed the hon. Member for Manchester, Gorton (Mr. Marks), who is a parliamentary neighbour of mine. Indeed, as I look round the Chamber I see that all my parliamentary neighbours who are here today are Labour Members. I hope that in the next general election we shall be more successful in Greater Manchester and that we shall return more Conservative Members. Nevertheless, it is a pleasure to follow the hon. Member for Gorton, and I should like to take up a point that he made about derelict land grants.

It is precisely because my local authority is very keen on pursuing a policy of economic enterprise areas that we need to maintain the 100 per cent. derelict land grants. I believe that hon. Members on both sides of the House are in agreement on this, and we urge the Government to look at it very carefully. I understand that the Department of Industry and the Department of the Environment are looking at the question. It is one that assumes great importance in terms of the decisions relating to regional policy as a whole.

I hope that the hon. Member for Stockport, South (Mr. McNally) will forgive me for trespassing on the affairs of the area of the old county borough, but Conservative councillors, and officers of the council, have approached me on this question, because we are anxious to develop areas in the town centre for industrial enterprises, precisely because we want to create new jobs. Some of these areas are under multiple ownership at the moment and will require a compulsory purchase order to make them viable units. This is something to which we attach considerable importance.

Moving a little wider than an interest of immediate local concern, I should like to emphasise again what my hon. Friend the Member for Lancaster said about the importance and significance of future developments in regard to the European regional development fund. I would welcome an enlargement of the non-quota section beyond the present 5 per cent. limit referred to. I perfectly understand that such an enlargement would not of itself lead automatically to further benefits to the North-West because we would have to compete with many other areas of the United Kingdom as well as with the other members of the Western European Community. But it needs to be looked at, and I think that it would produce beneficial results, because the loss of the assisted area status in terms of most of Greater Manchester is leading to a situation in which we shall lose not only the derelict land grant—unless the Government have a change of mind on this—but also the benefits that we are entitled to expect at present from the ERDF.

I hope that the accession of other countries to the Community, and the review of the ERDF which the Government, the Commission and the European Council are committed to undertaking between now and 1 January next year, will produce a recognition in the Community that something needs to be done to improve the position of the United Kingdom in relation to the fund.

I should like, as I have indicated already, to see the non-quota section enlarged so that we can try to compete for a greater level of funds than is available to us at present.

In trying to establish the framework necessary for the expansion of private enterprise, there are a number of areas in which the Government can be of assistance. In this connection, I should like for a moment to return to a concern that is purely local to those hon. Members who sit for north-east Cheshire but which has a bearing on Greater Manchester as a whole. It would be very helpful if the Government could now confirm that in 1982–83 a start will be made on the improved roadwork system in my constituency and in that of the hon. Member for Stockport, South. We urgently need a clear signal from the Government that they understand the problems that we face with regard to communications and transport in the area if we are to attract new industry on to the premises which the local Conservative council is seeking to make available.

If a start can be made on the A6 redevelopment and bypass in the time scale that has been suggested, that will be extremely helpful. It will be helpful because the local authority and the local Members of Parliament are at one in trying to do everything we can to ensure that we have the proper climate for industrial expansion so that enterprise can fully have its head.

What we need more than anything else, as I said earlier, is the creation of opportunities for new employment. This will come about only if local firms can see the day when they have not only immediate profits but the possibility of investing later large sums of money for the future.

4.44 pm

Mr. Stan Thorne (Preston, South)

I do not want to get involved in a parochial type of political argument, which is always the danger when we are speaking about particular regions of the country, but Preston happens to have had a particularly difficult time over recent months, with closures at Courtaulds, Orr's Mill and Bright's, the contraction of small engineering firms, and various other indicators of a worsening economic/industrial position.

Discrimination in the allocation of resources must be opposed by those in the regions. The question I would pose—no doubt it has been referred to already by other speakers, and will be referred to later—is whether there is any evidence to support the "two nations" view of our society.

Many people, when referring to the two nations, have an imaginary line in mind, running from the Wash, through the Midlands, and ending in the South-West. It can be argued that below that line certain things apply, and that above it certain other things apply—and they worsen as we get further north. Northern Ireland must be included in that consideration.

But my concern—and that of all those who are in the Chamber at present—is with the North-West. It is interesting to note that the three to one representation that roughly exists as between Labour and Tory Members in the area is reflected in the present attendance in the Chamber.

What aspects do we need to examine in order either to reinforce the notion of a two nations economy or to destroy it? What research do we have to engage in? The figures are available. What percentages of children reach university in each area? What percentage of active patients are there on general practitioners" lists in each area? We are already familiar with the percentages of unemployed. What are the percentages of families in receipt of social security benefits, particularly those in receipt of invalidity benefit? The figures show a marked contrast between the two areas.

There is an indication that crime and violence are growing among young people in certain parts of the North-West. That is not, in my view, unconnected with the low level of expectation that they have when they leave school.

The transport system was mentioned by the hon. Member for Hazel Grove (Mr. Arnold). There again, we can contrast the provisions made for transport in the South-East with those made in certain parts of the North-West. I represent Preston, but I live in Liverpool. Therefore, I have reasonable knowledge of the area from Merseyside up to the North Fylde coast. When we consider communities such as Kirkby, Skelmersdale and Netherley, and ask where their equivalents exist in the South-East, we are forced to ask why the same characteristics are not present.

I recall that Netherley, in the North-West, was planned as a housing estate. Clearly, the criterion was to assemble as many units of accommodation as possible on the smallest possible piece of land, for immediate occupation, in order to reduce the housing list. Any attempt to build outside was resisted by central Government.

Has our membership of the EEC—the hon. Member for Lancaster (Mrs. Kellett-Bowman) should be familiar with this, if with nothing else—further exacerbated the differences in terms of expectations for the future? Many people in the North-West already see that certain planning activities are related to the fact that the South-East of England is far nearer to France, to Germany, and to other parts of Europe, than is the North-West. That may be not unconnected with the fate of the ports of Liverpool and Preston. Are they to grow or to pass away? We have evidence that Preston will close. In the meantime, the port of Liverpool faces urgent problems.

As regards industry, in the Preston and Lancashire area—hon. Members on both sides of the House are conscious of this problem—the textile industry is virtually dead. With what have we replaced it? In Preston and its surrounds we have British Aerospace and British Leyland. Without them, we would certainly be in considerable difficulties in terms of the economic structure of that area. What are the consequences for the future of relying upon those two enterprises for the well-being of that area?

Here one necessarily turns to the question of planning for development in the North-West. Obviously any planning exercise is useless without the appropriate provision of resources. Private investment has been the accepted way of improving the economic situation in the regions. The previous Labour Government and the present Conservative Government refer to private investors. Clearly there is little incentive for private investors to move to the North-West. But I am far more concerned with public investment. For example, are we prepared to extend, with the help of public money, the role of the Central Lancashire Development Corporation? Clearly the Government consider public investment of that kind anathema. Yet, without it, the prospects for the North-West are grim indeed. Why cannot the Central Lancashire Development Corporation get involved in building for public enterprise—public enterprise of new types, public enterprise in which local authorities can get involved and in which local community co-operatives can be established so that, within the community, they have a vested interest in making a particular enterprise a viable, economic unit?

Of course, that smacks of Socialism, and that is the last thing that we can expect from the Government. In my view, we did not get a great deal of incentive or initiative in that direction from the previous Labour Government, but I am optimistic about the changes that we shall be able to impose when, as undoubtedly we shall, we elect a Labour Government in, say, October 1983.

In the North-West, housing still remains an important issue at a time when local authority cuts are being made at the behest of the Government. Because of time constraints, I cannot go in great detail into the effects of cuts in housing in my area. There are 25,000 urgent priority cases on the housing list—some of them living in multi-storey blocks of flats—and their expectancy of early rehousing while their children are young is now even worse under this Government—and it was not particularly good under the previous Labour Government—following the decision of the Secretary of State for the Environment backed by his bosses in the Cabinet.

The Lancashire county council has announced and gone into some detail regarding its £10 million cuts in education. It is difficult in a short space of time to spell out what that means. Undoubtedly it will have a severe effect on any unemployed person seeking retraining or possibly seeking to go into an entirely different employment and needing to start with an OND or something of that description because grants are not available following the Government's cuts.

My hon. Friend the Member for Manchester, Gorton (Mr. Marks) said that the May elections will have a relevant part to play because some interesting politics emerge in regard to the rates in some of our major towns. I live in an area represented by three Conservative members of the Liverpool city council. In consequence, I had a leaflet from the council delivered to me. It contains probably the most blatant lie that I have seen in a piece of political propaganda for some time. It reads: In November, Conservatives resolved that the Council Housing deficit of £3.6 million be paid by tenants. Labour and Liberal voted that it be paid by the Ratepayer. So you pay! The implication is clear: that tenants do not pay rates. That is a major lie. If the Conservatives were honest, they would have to admit that people who get tax relief on mortgages are better off under our system than the rentpayer who pays rates.

Certain other leaflets have also been issued. One has been issued by the Liberal Party with its particular sort of mischief. It talks of rates being held constant in 1975–76 without mentioning that the Labour Government increased the rate support grant to make possible the holding down of those rates.

One can say that the Tories nationally and locally are consistent and radical. Their aim is clear. It is to destroy the Welfare State both nationally and locally.

The Liberals are inconsistent, gimmicky, immoral and, in certain circumstances, downright dishonest. [HON. MEMBERS: "Where are the Liberals?"] The fact that they are not here merely illustrates their irrelevance in this type of debate.

There can be little question but that the Labour Party will take control in many towns and cities following the May elections. It does not mean that we can be complacent. It means that the Labour Party at local level will face tremendous problems. How are Labour-controlled councils to provide services that the people in their localities are entitled to expect in view of the cuts that have been imposed by the Government? In the seventeenth century John Locke gave the British people the right to eject, to throw out, a bad Government pursuing bad policies. The sooner the British people do that, the better.

4.59 pm

Mr. John Lee (Nelson and Colne)

I think that all North-West Members in the House will agree on the problems facing the traditional industries in that region. We have had a series of unhappy closures in the textile and footwear industries on an almost weekly, if not daily, basis through a combination of high interest rates, imports and the recession generally. I believe that there is a strong case for more effective action to be taken against the dumping of foreign textiles. I suggest that our Department of Trade Ministers should be prepared to consider allowing the private textile sector to second one, two or three of its employees, paid for by private enterprise, to the Department's antidumping unit with a view to beefing it up.

I also believe that we should take advantage of our present massive public sector purchasing power and use that power much more positively to buy British, certainly in so far as textiles are concerned.

But, above all—and I think that this applies to industry in the North-West and in the country generally—what we need more than anything else is a lowering of interest rates.

However, I believe that Opposition Members are doing a disservice to the North-West by exaggerating the region's problems. The hon. Member for Blackburn (Mr. Straw), when speaking in my constituency some weeks ago, talked about an industrial holocaust coming in the not-too-distant future. Such emotive words and exaggerated phrases are total nonsenses. They bear no relation to north-east Lancashire, and particularly to the constituency that I know and represent.

In my seat of Nelson and Colne, we have very well diversified industry. Apart from the traditional areas of textiles, we have a thriving furniture industry. It is the second or third largest funiture manufacturing area in Britain. We have substantial aerospace, engineering and packaging interests, and we have medical products and wall coverings industries. They are very successful companies.

I was very proud last Friday to be able to take my hon. Friend the Financial Secretary to the Treasury around one of our newer engineering companies in Pendle. It was started in 1967. Today it has a turnover of £2. million. It exports 60 per cent. of its production. It uses the most modern machinery, including some from Japan, and it has recently won a major export order to Japan of nearly £500,000. There are many more firms such as that in northeast Lancashire.

Today I was pleased to read that a firm in Clitheroe has just been awarded the Queen's Award for Export. That is another example of the first-class firms and first-class management that exist in north-east Lancashire.

By continuing to look at only one group of companies and one group of industries, Opposition Members do the disservice that I have mentioned. They create a totally false impression. My hon. Friend the Member for North Fylde (Sir W. Clegg) drew attention to the fact that these persistent exaggerated comments lower the morale of the people in north-western England. They are potentially damaging to potential investors and to the attraction of institutions which we want very much to come and develop new industrial estates in northern England.

What we need in north-east Lancashire particularly is a much better infrastructure—particularly the M65. I know that a number of Opposition Members, including the hon. and learned Member for Accrington (Mr. Davidson), have been pushing for this, as has my hon. Friend the Member for Rossendale (Mr. Trippier). We need the M65 to link us with the national motorway network as soon as possible. But, more particularly, we need new small factory units. The newer industries that have developed in north-east Lancashire have taken advantage of the old mill premises. These are now almost totally occupied and taken. I was delighted to see in the recent Budget the new measures to encourage new small factory development—the 100 per cent. allowances and the £5 million, to be supported by private capital, to build new workshops.

I should like to make a final point on something that does not affect north-east Lancashire particularly but affects the North-West generally. It seems as though we in the North-West shall have two or possibly three of the new enterprise zones announced in the Budget speech. This is a very bold initiative. I believe that it will do much to improve, to build up and to rejuvenate the inner city areas.

Mr. Eric S. Heffer (Liverpool, Walton)

Rubbish.

Mr. Lee

The hon. Gentleman says "Rubbish." A number of Socialist local authority leaders who will be benefiting from these enterprise zones have ex-pressed similar comments. We accept that enterprise zones are anathema to many Labour politicians.

My plea today, however, is to the joint stock banks. They have had a very good run during the last two years, and they will probably have another very prosperous year ahead. I hope that they back up the boldness and initiative that the Government have shown and put together for these enterprise zones financial packages that are equally as bold as the measures themselves—financial packages in the terms of low interest rates, longer repayment periods and possibly the use of their mobile information centres in these potential enterprise zones to back up and to demonstrate the services which they provide. I believe that the joint stock banks have a lot to offer. They have the money and resources. Let them back up the boldness of the Chancellor's initiative.

5.4 pm

Mr. Arthur Davidson (Accrington)

Life has never been particularly easy for large sections of the people in the North-West over many periods of time. However, I think that it is true to say that the North-West has been particularly hard hit in the last few months. I am not for a moment suggesting that that is all the fault of the Conservative Government. But equally, it would be erroneous to say that the Conservative Government's policy has had nothing to do with the bad times that many people in north-east Lancashire and other areas of the North-West are going through.

I agree with a great deal of what has been said by the hon. Member for Nelson and Colne (Mr. Lee). In north-east Lancashire in particular, small industries have played and are playing a very important part in our economic life. We need to encourage small industries to come and open up in north-east Lancashire. But the reality is that the thing about which most employers complain is high interest rates. It is very difficult for them to invest. Again and again, they ask me, as I am sure they have asked the hon. Gentleman, "When will interest rates come down?" The Government cannot pretend that they are not responsible for high interest rates.

The textile industry—and again, the hon. Gentleman is quite right—has been particularly badly savaged in recent months. The irony is that Conservative Members repeatedly say "The reason for unemployment is the high and excessive wage claims put in by the trade unions. The workers have refused to adapt to new conditions, to new manning levels and to new technology." Nothing of that can be said about the textile industry. The workers in that industry have done everything that has been asked of them. On balance, they are poorly paid—or not well paid. They do not make excessive wage demands. They are anything but militant. They have adapted to all manning levels that have been asked of them. Yet thousands and thousands of them, in constituency after constituency, are being put out of work.

Something is wrong somewhere.

Mr. D. A. Trippier (Rossendale)

Exercising his customary fairness, will not the hon. and learned Gentleman concede that the greatest problem that the textile industry faces is the high level of imports? Will he also concede that the multi-fibre arrangement, with which I know he is very familiar, was negotiated by the previous Government and not by the present Government, and that that will not come up for renewal until 1981?

Mr. Davidson

Even without being my usual agreeable and reasonable self, I could not fail to agree with that. Clearly, the MFA was negotiated by the previous Government, and it was very effective. That does not mean that it will be effective for all time. It clearly needs renegotiating.

Mr. Straw

On exactly that point, does my hon. and learned Friend agree that the problem of imports facing the textile industry today is not so much a problem of imports from low-cost countries, which are covered by the MFA, but of imports from the United States and Canada, in respect of which the Conservative Government have lamentably failed to introduce controls?

Mr. Davidson

Once again, being my usual agreeable and reasonable self, I cannot fail to do anything but agree with my hon. Friend.

I promised you, Mr. Deputy Speaker, that I would be brief—and I shall be my usual agreeable self. I do not wish to indulge in a chorus running down northeast Lancashire. There is a danger that one can do so. Nevertheless, we cannot escape certain facts. In addition to the other things that I have mentioned, the quality of life is being eroded. Here and there a library, a sports centre's facilities and a few home helps are cut. Those who are, on balance, low-paid need and value such facilities. They enrich the life of the area.

Although private industry has done a great deal to help the economic vitality of the region, public investment has also played an important part. Harm has been done as a result of taking away intermediate area status and as a result of the loss of what little EEC aid there had been. I appeal to the Minister seriously to consider the points raised by the hon. Member for Nelson and Colne, even if he does not wish to consider mine.

5.10 pm

Mr. Robert Atkins (Preston, North)

The attitude of the North-West, as evinced by the area that I represent and in which I live, is one that should be cultivated and presented more widely to the country. People are not prepared to spend what they do not have. That is something that dictated the course of the election campaign, in which I and many of my colleagues were involved. I make no apology for using Preston as an example. It is the administrative centre of Lancashire and has a reputation that stretches back for hundreds of years.

Hon. Members will not be surprised to learn that I do not share in their gloom and doom about the North-West, particularly when I consider Preston borough council. Four years ago Preston borough council was controlled by the Labour Party. It managed to achieve an all-time record rate increase of 31.2p in the pound, which put it at the top of the rate table in Lancashire. As a result, industry and those ratepayers who had enough money left to pay for their train fares fled the town. When the council was taken over by the Tory Party, it had to do something about that. To cut a long and difficult story short, the rates are now 8p in the pound. Consequently, there has been an increased demand from industry and local businesses to participate in the good sense, good fortune and good management of the Preston area.

That has not been achieved by throwing people out of work or by cutting back services. The record of Preston shows an extension of services, not a reduction. It has been done by simple good management and by the natural attrition of staff, who were not replaced when replacements were not required. They have capitalised on the good sense and mangement of the controlling Conservative Party. That makes Preston the lowest rated borough in Lancashire and, indeed, in the whole of the United Kingdom. That is an achievement for the North-West, and should be shouted from the roof tops.

As housing has been mentioned, I shall refer to an imaginative scheme being used in Preston. Houses have been built in conjunction with a building contractor, and those houses will be offered for sale. Depending on one's political beliefs, it might prove extraordinary to learn—it surprised even me—that two Labour councillors were at the front of that queue to buy houses. One must draw one's own conclusions.

Alongside the achievements of Preston borough council are those of the county of Lancashire. It is the second lowest rated county in the country as a result of good management, prudence and good sense. That realism has begun to pay off and local businesses have begun to return.

I wish that I could speak in the same glowing terms about the North-West water authority. Many hon. Members have doubtless received complaints about the activities of that authority over the years. However, one particular cause of concern is the charge for sprinklers and fire-fighting mains. That concern can best be summed up if I quote from a local company, Cartmell & Barlow Limited, which manufactures coffins. With some common sense, it wrote: Water is an essential commodity, but so too are coffins; and according to this hair-brained thinking, we should be justified in charging a quarterly levy to Funeral Directors to cover them for availability of supply during an emergency, e.g. a ' flu epidemic'. There is some sense in that slightly facetious remark.

As the hon. Member for Preston, South (Mr. Thorne) said, problems have arisen as a result of the closure of the Courtaulds mill, which threw 2,600 people out of work. It is also proposed to close Preston docks. However, we are using those examples to provoke more development, industry and housing. I know that the Central Lancashire Development Corporation is keeping a close watch on Courtaulds and on that site. I also know that the board reviewed the matter last Friday. It is anxious to see proposals for comprehensive redevelopment implemented quickly. It is conscious of the need to ensure maximum involvement of the private sector.

The Central Lancashire Development Corporation believes that the problem of demolishing the existing large structure of the Courtaulds mill is enormous and that it will be expensive. It is determined—it is hoped in co-operation with Courtaulds—to prevent the development of virgin land in the area of the site, while existing structures are left to rot. In the view of the CLDC, the agency controlling redevelopment—which will of course benefit from the development of a green field site—should bear a proper share of the cost of clearing up potential dereliction. The CLDC has told Courtaulds that it will consider sympathetically the possibility of being involved in such a role. At the time that was a savage blow, and I raised the matter on the Floor of the House. It is gradually being lessened through the intelligence and foresight of Preston borough council, in co-ordination with the Central Lancashire New Town.

The Central Lancashire New Town is sometimes the subject of criticism. I am sure that similar authorities may be open to criticism. It was set up to counteract the money devoted to Merseyside and Greater Manchester. For too long those areas have received a lot of money from the Government, but have not utilised it to any great benefit. The Central Lancashire New Town has been able to act as a catalyst and has directed money to needy areas, such as Courtaulds.

Preston docks may close, and the potential of that site is enormous. One does not have to be a dreamer or fantasist to imagine the potential of that site and how it might be developed. A marina, private housing and advance factories could be developed. An enormous development would provide more jobs than are presently available in the docks. Leisure, business, industrial and housing amenities could be added to the ancient town of Preston. Central Lancashire New Town has put in a lot of work in terms of the redevelopment of the older parts of Preston.

It is instructive to use Preston as an example. Hon. Members have expressed rightful concern about declining industries, such as the textile industry. There is great potential in new industries, and Preston's intelligent foresight of years ago—of moving into industries such as aerospace-has proved a boon. The Central Lancashire New Town has been able to help in a variety of ways, and continues to do so.

One aspect of great concern—I regret to say in so august an assembly—is the problem of sewerage. Many hon. Members, particularly those who represent Manchester constituencies, will know that sewers have collapsed in parts of Manchester. The situation in the North-West, including Preston, is worrying. The sewers are old and, by the very nature of things, require an enormous amount of capital investment. There should be a considerable effort to find the money needed. I expect that those Labour Members who oppose the Common Market will be the last to cry when the EEC provides the money for some of this restoration.

Mr. James A. Dunn

Does the hon. Member expect that private industry will also make its contribution, following what he said about the North-West water authority?

Mr. Atkins

I am sure that private industry will, through the high rates that it pays, contribute a great deal of money to the sewers.

I turn now to some of the industries that are achieving success in and around Preston and central Lancashire. I was delighted to see in the papers this morning that a Preston company, Gemmill and Dunsmore, has just received the Queen's award for export achievement—and its industry is textile machinery. Even in textiles, all is not lost.

The two biggest companies in the area are British Aerospace and British Leyland. British Aerospace has just announced its results for a period of years, and for the first time reports sales of over £1,000 million. That is a tremendous achievement. In case any Labour Member should say that that is a result of nationalisation, I would say that such a claim is tommy rot. These developments have been built up over many years and relate to projects that were funded and organised when the company was private.

The company has also announced a planned campaign of expansion. Whether in building more and faster ADV versions of the Tornado—the F2, as it is known in the RAF—more 125s in Chester or more Airbus wings, British Aerospace is a success story, and I am convinced that British Aerospace Limited will be an even greater success story.

There is a lot of knocking of British Leyland, but I am proud that the area of the company that is most successful is adjacent to my constituency, in the constituency of my hon. Friend the Member for Chorley (Mr. Dover). The new vehicle that the company has announced, the T45, is already successful and I hope that there is more success to come. Perhaps the Minister will give more consideration to the problems of type approval regulations, which exist for private vehicles, but not for commercial vehicles.

There are problems in the North-West and no one would seek to deny them, but there are great success stories as well and the potential exists for more. The attitude in the area, that we cannot afford to spend what we do not have, shows how this area will develop. The potential, the infrastructure and the hard work are there; above all, the people are there to do the work. All that we need is that extra spark of encouragement, and then the problems of the North-West will diminish.

5.23 pm

Mr. Tom McNally (Stockport, South)

The hon. Member for Hazel Grove (Mr. Arnold), who, unfortunately, is not present now, apologised to me earlier for interfering in the internal affairs of the old metropolitan borough of Stockport. I do not mind his support for new jobs for the town or his call for the completion of the M63. In that respect we welcome the interest of Hazel Grove. Unfortunately, the Tory councillors that Hazel Grove and Cheadle send to rule Stockport also give us the cuts in money for bus passes for the disabled, the axing of nursery schools and the cutting of property repairs, which will give future generations council slums. That is the other aspect of Hazel Grove's interest in Stockport.

As several hon. Members have said, the North-West is the heart of industrial England. I cannot agree with the hon. Member for North Fylde (Sir W. Clegg) in saying that we are exaggerating the problems and thus causing damage. This is always a problem, but, as someone who was born in North Fylde and whose family still lives there, I do not think that its people believe that their economic problems are exaggerated.

The Government cannot be absolved of responsibility. Less than a year ago I saw in Stockport expensive Saatchi and Saatchi advertisements saying "the Conservatives are coming". They came; but many small business men who voted for them did not imagine that with them would come more than a doubling of the inflation rate, a record level of MLR for a uniquely long period or the doubling of VAT. Those are the realities facing small and medium firms in the North-West.

Rarely can a Government have so effectively destroyed business confidence, as many reviews by business itself in the North-West have revealed. Therefore, we cannot allow the Tories to say "Do not mention this. Do not disturb confidence. People will think it is too terrible."The skills and the capability of the working people of the North-West have never been in doubt. What is now in doubt is how those disastrous policies will hit the economy of the region.

I was interested to hear the hon. Member for Preston, North (Mr. Atkins) praise British Aerospace. How a little constituency interest overrides prejudice! The workers of British Aerospace rightly resent the meddling of the Secretary of State for Industry in their firm. As the hon. Member said, it is a success story. There is no justification for the sheer ideological prejudice, interference and casting of doubt on the future of that firm by the Secretary of State.

Mr. Robert Atkins rose——

Mr. McNally

No, I will not give way. Many hon. Members still wish to speak.

Nor can people in my constituency understand the Secretary of State's ideological interference in the future of Fairey Engineering. Two years ago, the workers had a bankrupt firm on their hands. I am pleased to see my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) in his place. He is known and respected in Stockport for the great work he did with the NEB in the rescue of Fairey. Now—again, not because it has failed but because it is successful—the future of that company is put in doubt by the meddling of the Secretary of State.

These successful companies have offended on one count only in the Secretary of State's eyes: they are examples of public enterprise that has worked. When it comes to the real problems facing industry, the right hon. Gentleman says that he will not interfere, that his ideological purity makes him leave these things to the market place.

A North-West industrialist recently told me that since 1978–79 the competitiveness of his goods had been eroded, compared with those of his main competitors, by 35 per cent. in West Germany, 24 per cent. in France and 21 per cent. in Sweden. That was due to two factors—the strength of the pound and the rate of United Kingdom inflation, both directly caused by present Government policy.

My hon. Friend the Member for Blackburn (Mr. Straw) warned of a disaster facing industry. He was right to do so, because of these factors which are presently at work. Talking privately to industrialists one finds a deep gloom about the future under this Government's economic strategy. An example is the hasty and ill-considered withdrawal of assisted area status for the North-West. The North-West Industrial Development Association has said: The withdrawal of assisted area status from large areas of North-West England will seriously inhibit the future economic development of the region That again is Government policy at work.

The neglect of regional policy goes hand in hand with another piece of "noninterference "—namely, the refusal to guide Inmos into a development area. We are told that the Government cannot interfere in these matters of the market place, yet they have willingly interfered in success stories such as Fairey and British Aerospace. We have double standards from the Secretary of State for Industry. When we scratch away the ideological pretensions, we find a lamentable lack of industrial strategy.

One further industrial fact must be laced and added to any assessment of industry in the North-West—namely, that many informed and reasonable men on both sides of industry, and on both sides of this House, fear for the future of the textile industry. The Secretary of State for Trade has continually taken a "too-little, too-late" approach which has already cost thousands of jobs. In the Secretary of State for Trade and his Department we have a dangerous combination for free trade. The hon. Member for Nelson and Colne (Mr. Lee) may put forward ideas about a procurement policy and faster action on antidumping. But let me tell him that he will find in the Department of Trade and in the person of the Secretary of State, people who do not want to listen to that kind of argument. Because of that, the textile industry is in real danger. It is time that the Secretary of State stopped pussyfooting about over the future of the multi-fibre arrangement and gave the industry some long-term hope for the future.

A number of hon. Members have said that we should not paint too gloomy a picture of the region. I have sketched some of the positive harmful actions that the Government have done to the region. However, they cannot take away from the region its multifarious skills, its advanced industry and its good communications. These should be emphasised. A Government with some concept of regional policy and a commitment to making industry work could make a success story of the North-West. Perhaps the North-West voters knew in their hearts that the Conservative manifesto was not to be believed. Perhaps that is why they returned so many Labour Members at the last election. Perhaps they did not trust the aspirations of the Secretary of State for Industry, or think that the Conservatives really gave hope and opportunity to a region of high skills, high technology and industry.

I do not know how long the present Government will survive or how long the present economic and industrial strategy will last. As long as it lasts, it will harm the North-West and its industry. Perhaps I should remind the Minister of something that was said more than 50 years ago by a then Member of Parliament who sat for a constituency in the North-West. Perhaps the Minister will listen to him rather than me. Sir Winston Churchill once said: I would rather see finance less proud and industry more content. As industry in the North-West sees the windfall profits of the private banks untouched by this Government, at the same time as industrial and regional aid is withdrawn, it will become more and more discontented, and it is right that it should be so.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

This is a very important debate and I am anxious that everyone who wishes to take part should be called. If every hon. Member speaks for an average of six minutes, I shall be able to call everyone who wishes to speak.

5.35 pm

Mr. D. A. Trippier (Rossendale)

I am grateful to you, Mr. Deputy Speaker, for indicating that we have about six minutes each. I shall try to confine myself to that limit.

Anyone listening to the speeches from the Opposition Benches today could not fail to be amazed at the hypocrisy of a party which has failed abysmally in governing this country for two-thirds of the past 20 years. Perhaps the saddest aspect of this debate is that the vast majority of Labour Members have been so destructive. Not one has put forward any new constructive proposal. Opposition Members have trotted out precisely the same proposals which led to the region's decline and resulted in the legacy that they left us last May. For that reason, if for no other, at a time when the full consequences of Labour's mishandling of the economy are taking full effect, the debate this afternoon should be turned round and we should be censuring the Opposition.

After only 11 months in office the Conservative Government have dramatically changed the course of this country's economic policy and are determined to reverse the decline.

Mrs. Gwyneth Dunwoody (Crewe)

At a cost of 1.4 million unemployed.

Mr. Trippier

I do not know why the hon. Lady should make such a remark when her Government doubled unemployment in the North-West.

Mrs. Dunwoody

Wait until we see what happens under the Conservatives.

Mr. Trippier

After such a short period it would be impossible to expect the effects of the changes we are making in policy to have worked their way through the system but major steps have been taken, all of which have a direct effect on the North-West. We have increased incentives by cutting taxes. We have increased incentives for small businesses in the recent Budget. We have removed constraints and distortions and we have reduced bureaucracy by abolishing controls on prices, dividends, pay and foreign exchange. We have also eliminated a lot of waste and that has represented a £90 million saving. Increased exploration in the North Sea will benefit the Northwest, as any other region. We have secured a better use of energy resources by realistic pricing policies. We have restored realism to the nationalised industries' finances and pay bargaining. We accept entirely that success will take some time to materialise. No one could accuse us of not warning the electorate on this score. The Prime Minister and the Chancellor of the Exchequer have made that abundantly clear before, during and since the last election.

There are encouraging signs. North Sea oil outputs are booming. We shall be self-sufficient in oil this year. The balance of payments is in deficit because imports are too high but the fact remains that exports are at record levels and invisible trade is doing well. Last year the United Kingdom overtook West Germany to become second only to the United States in gross as well as net invisible earnings.

In the textile and footwear industries, which are predominant in my constituency, the Opposition cannot shake off their responsibility. This is manifestly the case with textiles where, in the North-West region, and particularly in Greater Manchester and Lancashire, we have had mills closing at the rate of one a week since 1 January this year. The Opposition should not be so smug about the fact that that has happened during our tenure of office. The negotiation for the MFA took place under the last Administration, and everyone knows that it cannot be renegotiated until 1981. Because we have to wait until then—and the Opposition negotiated the length of the agreement, as well as the terms of the quota levels—there may well be no spinning or weaving mills left to renegotiate for.

Mr. Straw

Of course the multi-fibre arrangement was not perfect but it was negotiated with all-party support. Will not the hon. Member accept that the major problems of the textile industry at present are very high interest and exchange rates and imports of dumped goods from the United States and Canada?

Mr. Trippier

The hon. Member has raised two points. First, he says that the MFA had all-party support, but he must realise that the people who negotiated it through the EEC were not shadow spokesmen on our side, but Ministers in the then Government. They actually sat around the table and negotiated it and then brought it back to the House of Commons for ratfication or otherwise.

Secondly, the hon. Member should listen more carefully to the textile trade unions, as well as the employers, who would tell him that the major reason why the textile industry is under such pressure at present is largely because of imports. The closures in east Lancashire, certainly by Tootal, were largely because of increased import penetration. Let there be no mistake that this Government inherited the agreement from the previous Administration and there is still too high a level of imports. I have attempted to put the record straight. I am grateful to the hon. Member for Blackburn (Mr. Straw) for his intervention. Many Conservative Members will continue to fight for a strengthened multi-fibre arrangement to be renegotiated next year and for the bilateral arrangement to be renegotiated the year after.

It is essential that the Secretary of State for Trade makes his position crystal clear, as a Community view will be sought before the GATT textile committee meetings in August. As Britain is under the most pressure, we should take the initiative and lead the Community. Only in that way can we avoid a recurrence of the disaster that has hit east Lancashire. Tootal has closed many mills in the area, culminating in a closure in my constituency last week.

Footwear has also faced increased competition from imports, which has already led to many closures and which will lead to more. The Government must take action—in the form of an increase in selective import controls, and more effective anti-dumping procedures of the sort that were referred to by my hon. Friend the Member for Nelson and Colne (Mr. Lee). The footwear industry also faces a problem from within, which the Government must examine carefully. A retail commitment was introduced to ensure that the footwear retailers supported the footwear manufacturers by buying British where-ever possible. To say that the retail commitment has not worked is a gross understatement. To say that it has been effectively monitored by the footwear EDC is a sham. I hope that the Minister will deal with that point in detail in his reply.

The Government are determined to create a climate of enterprise in which entrepreneurship, innovation and success are rewarded in industry, in the North-West. Nothing should deviate them from that course. The public have already experienced the alternative strategy which manifested itself between 1974 and 1979. That strategy, under the previous Labour Government, did nothing to arrest the decline in the North-West. It compounded it. That is why the vast majority of British industrialists in the North-West are solidly behind the Government's policies. If they have any fear, it is not that the policies will not work, but that the Government will deviate from their original course. The first objective for the Government is to reduce inflation. Only when that has been achieved can a sustained improvement in the economy begin—with the promotion of initiative and enterprise and the provision of new jobs, especially in small firms in the North-West. The Government's policies must succeed if we are to lift ourselves out of the malaise which results from being a second-rate nation.

5.43 pm

Mr. Michael Meacher (Oldham, West)

It would have been one thing if the Government had withdrawn intermediate status from the North-West if the last decade and forecasts had shown that its condition was improving, but they show that the situation in the North-West has become steadily worse over the last 10 years. The reason is not, as the hon. Member for Rossendale (Mr. Trippier) said, the previous Government's considerable level of aid, but, in spite of that, in relative as well as absolute terms. That applies whatever yardstick one takes. If the unemployment vacancy ratio is taken as a better yardstick of the firmness of the labour market than unemployment levels per se, the position of the North- West is vastly worse than the national average. Without exception, in recent months the North-West has had the highest unemployment vacancy ratio. How can the Government justify removing intermediate area status from the North-West when it contains no less than 18 travel-to-work areas where the unemployment vacancy ratio is greater than the national average?

The North-West has been losing not only its share of employment but its share of capital investment. In seeking to justify his policy, the Secretary of State said in a debate on regional policy last year: To a limited extent there has been some apparent success in regional policy, judging by the disproportionate amount of the total investment—disproportionate in terms of the population concerned—that has taken place over recent years in the regions."—[Official Report, 24 July 1979; Vol. 971, col. 365.] The North-West has been considerably more disadvantaged than other regions in general. While fixed capital formation by industry and Government has been about 9 per cent. of the national total, the population of the North-West accounts for about 12 per cent. of the national total. Again, I ask how can the Government justify cutting regional development grant aid when investment levels are already so far behind the rest of the country?

The North-West also has particular environmental difficulties—many in my constituency—in terms of large areas of undeveloped and derelict land, the derelict and potentially dangerous state of the underground water supply and sewerage installations, and an excessive amount of obsolete industrial property—perhaps no less than a third predating the First World War. Much such land is in my constituency. On what grounds can the Government justify de-designating the North-West outside Merseyside, when these problems are virtually as severe now as when the area was originally designated as an assisted area? The Government's wish is to achieve a large public expenditure cutback, rather than to pursue a rational policy that is designed to assist the regions. Because of that, they are unlikely to backtrack wholly, however damaging their proposals. But will they not demonstrate at least a measure of flexibility in order to minimise the damage?

Because assisted area status is at present combined with other specific aids, the North-West stands to lose those also when it is deprived of its intermediate area status. Therefore will not the Government think again about the specific aids, and ensure that they remain available where the conditions of eligibility are met? That would at least avoid the aggravating, cumulative effect of de-designation, and it would ensure that abrupt deprivation is not compounded by loss of such valuable aids, in their own rights, as tourism grants, 100 per cent. land dereliction grants, and rent-free periods for small firms.

Under the present rules withdrawal of assisted area status will deprive the North-West of future grants from the European regional development fund. Yet the whole of the North-West—not simply Merseyside—as well as Scotland, Wales and the Northern region falls within a band of regional unemployment greater than 100 per cent. of the EEC average. Surely, on those grounds it is a justified candidate for ERDF aid. The Government prefer to reserve a more selective and discriminatory approach, but will they consider pressing for an industry-based, rather than a purely area-based, criterion for assistance, since that would have the considerable merit of concentrating aid on the textile industry, thus giving aid to the North-West?

Regional aid has been axed purely because of the dogmatic economics of the money supply. The Minister should recognise that the North-West, outside, Merseyside, should not be made the pawn of a dogmatic and increasingly discredited economic policy. Since the cutbacks are being imposed on an area where the position is already deteriorating, a major U-turn by the Government is the only way of avoiding a serious, dangerous and prolonged slump for the North-West.

5.50 pm

Mr. Anthony Steen (Liverpool, Wavertree)

I shall concentrate on one aspect of the North-West. The region will not change much, and we must have a clearer statement about the part that central Government will play in the local situation. How far will central Government dis- criminate in favour of one area against another? The uncertainty of whether the Government intend to intervene makes it more difficult for small firms to make informed decisions. The absence of dependable information about how local government and central Government will move prevents small firms from investing and the major financial institutions from finding customers prepared to take risk capital. The uncertainty is aggravating an already unstable situation.

The previous Government did not help. They talked about inner city rejuvenation, but they did nothing about it. They produced a White Paper and called together partnership committees. They believed that by bringing together central Government, local government and the health authorities they would arrest the downward spiral in inner cities. They left out private enterprise representation, the CBI, the trade unions and the community. It was crazy for the last Government to talk about partnership, when they ignored half the community that creates the wealth.

The Conservative Government had a clear mandate to reduce bureaucracy and reduce public intervention. Their mandate was to allow market forces to operate without constraint or distortion. That is the right approach. We have already made some moves in that direction. The Local Government, Planning and Land (No. 2) Bill and enterprise zones are designed to release controls and to encourage the recycling of money. The abandonment of a tier of regional aid is part of the some process.

There is no point in central Government reducing public intervention at national level if it is stepped up at local level. For example, the Liverpool council seems to be hell bent on destroying the small firm. It has announced a 50 per cent. increase in rates. What commercial enterprise can sustain such an increase and continue to trade in the inner area?

Mr. Heffer

Is it not clear that Liverpool council increased its rates because if it does not, on the basis of Government policy, further unemployment will be created in Liverpool where it is already too high? The council was forced into adopting Government policy, and it has the choice of increasing the rates or causing massive unemployment.

Mr. Steen

I hope that that intervention will not be counted against the six minutes that I am allowed, and that I shall be allowed to answer it. The city council has persistently refused to increase council rents. Instead, it has clobbered the commercial and private ratepayers. As a result, small firms are being driven outside the city to sites in the green field areas, and that reduces the amount earned in rates. I shall not be distracted further by that red herring.

The city council is also demolishing small firms. Recently it demolished a small firm in my constituency and replaced it with public housing. The turnover of that firm was £250,000 a year. It had an export trade worth £100,000 and a staff of 12. That firm is lost and will not operate again. For 18 months the well-known firm of Panda Alarms was prevented from building a new office block because the council's planning department did not like the shape and size of the aerial on top of the premises, although it was exactly the same shape and size as the old aerial 50 yards down the road.

Conflict between central Government and local government can breed distrust, which prevents banks, insurance companies and pension funds from investing in inner urban areas. The level of public intervention in inner city Liverpool is driving out the people and industries that could revive the inner area. What other city refuses to sell some of its spare land to willing purchasers? About 1,800 acres of derelict, dormant land are available within the city boundaries of Liverpool, but the city council is not prepared to sell any of that land so that office blocks can be rehabilitated. That means that buildings are condemned to compulsory purchase orders, and that leads to more derelict land. The Government must make plain whether they are prepared to intervene or whether they are prepared to allow the city council to continue to destroy the vestiges of wealth in the ailing inner area.

The Government must come clean about the extent to which they are prepared to distort the market by such intervention as the £70 million made available to the London docks under the Port of London (Financial Assistance) Bill. They must make clear how far they will distort the market economy by giving money to the urban development corporation. We talk about a Government who are committed to non-interventionism, but they may do that which they say they do not wish to do. If they confine themselves to giving infrastructure grants and enabling private enterprise to flourish in the enterprise zones and the urban development corporation areas, that will be a step in the right direction. However, if they believe in a non-interventionist policy, they must recognise that designating Liverpool airport as a C-category airport must be discriminatory, when they give Manchester airport an A category. That represents a move towards Manchester and away from Liverpool.

The same comment applies to European Community bids. We must ensure that favourable treatment is not given to some areas and not to others. We must ensure that city councils do not intervene where the Government do not. The Government's intervention programme must be limited to offering incentives, not in the shape of grant-aid, but in freeing controls so that small firms and private builders can once again create wealth.

5.57 pm

Mr. Roger Stott (Westhoughton)

I shall be as brief as possible. I was interested in what the hon. Member for Rossendale (Mr. Trippier) said. Those of us who were born and have lived in Lancashire know well the textile industry's problems. They are not recent problems. Over the years, we have endeavoured to introduce legislation and to negotiate the GATT treaties in order to protect the indigenous industries of Lancashire.

The hon. Gentleman tends to forget that during the period of the Labour Government his constituency's footwear and textile industries were kept afloat by temporary employment subsidies which were fought for by his predecessor, Mike Noble, who battled manfully to ensure that those industries were protected. Although they were not the whole answer to the problem, they were a very good palliative during that period.

We now face a very difficult situation in the North West.

Mr. Trippier

Is not the hon. Gentleman aware that during the last period of Labour government, more jobs were lost in the textile industry than under the previous Conservative Administration, even with temporary employment subsidy which many Government supporters believed created more problems than it solved?

Mr. Stott

I am aware of that, but time does not allow me to debate it with the hon. Member for Rossendale. However, we both know that without temporary employment subsidy, which was paid to the textile industry in Lancashire, a great many more jobs would have been lost. That happens to be a fact of life even though, apparently, the hon. Gentleman does not agree with it.

We have a Government who are hellbent on subjecting the whole nation to the Thatcher experiment. As a consequence, they are bound to create more and more unemployment. But we cannot continue to pursue a policy of tight money control, a slavish adherence to the prophesies of Milton Friedman and high levels of interest rates without having very high and sustained levels of unemployment.

During the period of Labour government, unemployment rose. We must acknowledge that it did. But during that same period, my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) and his team in the Department of Employment introduced various measures, including the job release scheme, the work experience scheme and the temporary employment subsidy, to mitigate the worst consequences of structural unemployment—unemployment which was created because of the decline of older industries and the emergence of newer ones.

All those palliatives and measures which cushioned the problems of unemployment have been swept aside in the cause of the Thatcher experiment, and even in my constituency we see unemployment going up to a level of 10 or 11 per cent.

The Government have to think seriously about reintroducing some form of assistance in the North-West to mitigate the consequences to which they are subjecting our people. They ought to look again at some of the schemes which were used so successfully by my right hon. Friends in the Department of Industry.

The second topic which I wish to discuss has been referred to by a number of hon. Members on both sides of the House. I represent a constituency which is split between Bolton and Wigan. I pay tribute to the recognition which this Government have shown of the problems of Wigan. However, before we get too euphoric about the creation of a special development area for Wigan, for which I am grateful and for which I pressed my right hon. and hon. Friends in the last Labour Administration, we have to remember that within the Wigan conurbation and the Bolton area those other areas were intermediate areas. That intermediate area status has disappeared, or is about to disappear. As a consequence, we face a real problem. I am sorry that we do not have a Minister from the Department of the Environment present for this debate, because in the Wigan area there is a great deal of land reclamation to be done.

In the centre of the Lancashire coalfield, many attempts have been made by local authorities to eradicate the slag heaps and the pollution of late nineteenth century coal mining. We cannot do that if the Government do not acknowledge that we have a problem. Therefore, all of us who represent such areas are very sorry that the 100 per cent. reclamation grant goes when the intermediate status of the area goes. I hope that the Government will heed what was said by the hon. Member for Hazel Grove (Mr. Arnold) and by my hon. Friend the Member for Oldham, West (Mr. Meacher), who drew attention to this problem.

I end on a parochial note, although make no excuse for doing so. Again I wish that there were a Minister here from the Department of the Environment, because we are becoming a little fed up in my constituency with the Secretary of State for the Environment granting planning applications to the National Coal Board for opencast mining. We have had enough of opencast mining in Wigan, and I do not want to see any more environmental pollution in my area.

I wonder whether the Secretary of State for the Environment, who represents the constituency of Henley-on-Thames, would like 24 coal lorries an hour rumbling along the main highway of Henley. Thanks to his decision, that is what I have in my constituency, and it will not do. It is time that the Department of the Environment took notice of what the local authority is saying and stopped approving these planning applications.

My hon. Friend the Member for Bury and Radcliffe (Mr. White) said that the people of the North-West would pass judgment. They most certainly will. I suspect that support for the Conservative Party in the North-West is now concentrated into an esoteric group of people such as collectors of Czarist bonds or admirers of English middle order batting.

On 1 May, the people of the North-West will make their judgment on the performance of this Government. That will be the return of Labour-controlled councils throughout the North-West.

6.5 pm

Mr. Mark Lennox-Boyd (Morecambe and Lonsdale)

I am pleased to be called immediately after the hon. Member for Westhoughton (Mr. Stott), who apologised for being somewhat parochial in his closing remarks. I, too, intend to be parochial because I feel that the area which I represent—the Morecambe and the Lancaster area—has factors to which I should draw attention because it knows how to overcome the problems facing the North-West.

This debate has been characterised by two general factors. The first is that Government help has an important place in the matter of assisting Britain's regions but that it is not the solution to the problem. The second general characteristic to which I draw attention is that the problems of the North-West are not bad all over. They are not bad, for example, in the area which I represent. They could be better, of course, but in a national context they are not so bad. I appreciate that they are very bad in the traditional industries, but they are not bad in many of the emerging industries, and I feel that our example may be a pointer.

I shall, of course, confine my remarks to Lancashire. Any constituent of mine who reads this speech and notes that I said nothing about Cumbria may rest assured that I shall remedy that deficiency on another occasion.

My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) drew attention to a most important fact in the Morecambe and Lancaster area. It is that during the past year, notwithstanding the period of recession that Great Britain and the rest of the world are going through, unemployment in our area has not increased. I do not seek to suggest that there is an overall trend which will be continued in a downward spiral. However, very marginally in the Morecambe and Lancaster area unemployment has actually decreased. Therefore, it is even more important to look at the Morecambe and Lancaster area to see whether it can give some general pointers to the North-West region in answering these difficult questions.

Morecambe and Heysham have established two records in the last few months, I am happy to report. First, it has been announced that we are to have the largest nuclear complex in the whole of Europe, which is very good for local employment. Secondly, it has been announced in the last few weeks that some entrepreneurs are making the necessary investment to build the largest big wheel in Europe. [Hon. Members: "Hear, hear."] Hon. Members have listened to that observation with some apparent amusement, and I am delighted that that is so. However, it is also important to look at the serious aspect of it, because such an investment is one of more than £100,000 in the entertainment industry of Morecambe, and we have to ask why people are prepared to invest money of that kind at a time when interest rates are so high.

I wish to draw attention to one or two small factors affecting the Morecambe and Lancaster area. All too often in debates of this kind, hon. Members on both sides of the House call for large sums of money which somehow will solve the problems of unemployment in their areas in a swift and dramatic way. Such is not the case of course. Unemployment is coped with by sustained planning and opportunities to create conditions in which small industries can build and grow. Therefore, I have to report one or two matters in my area in order to demonstrate how this has been happening.

In the last few weeks, the building of two small advance factories has been announced in the constituency of my hon. Friend the Member for Lancaster and two in the area I represent. It has also been announced that the Granada company—I have had conversations with my hon. Friend the Member for Howden (Sir P. Bryan), a director of the company—is to make a substantial investment in the Morecambe area. It is an investment, according to published information, of some £300,000. This demonstrates the confidence that Granada places in the North-West.

Two years ago the company made an investment in the Morecambe bowl, a bingo hall, that developed successfully. The company tested the water and found a tremendous market that was not merely seasonal but continued throughout the year. It has decided to follow initial, tentative feelers with a substantial investment in Morecambe that will do much for the prosperity of the area. I am informed, on the impeccable authority of my hon. Friend the Member for Howden, that Granada was pleased, beyond its wildest dreams, at the success of its venture and delighted with the staff who have been proved to be hard-working and co-opara-tive.

It is a measure of confidence in the Morecambe and Lancaster area that there have been announcements over the last few weeks of investments of an amount of between £500,000 and £1 million. That is a substantial amount for an area that does not have pretensions bigger than itself. If repeated over coming months, it would mean a substantial difference to the local economy. Why are business men prepared, in the face of high interest rates, to invest substantial sums in any area of Great Britain and, particularly, in an area such as Morecamble? The reason, I suggest, is that business men have confidence, not particularly in the present situation, but in the future of this country. They have confidence in the way the economy will develop and are, therefore, prepared to invest now to sow the seeds for reaping large dividends in coming years.

Hon. Members need to examine several simple factors for attracting industry that the North-West desperately needs. They must look to advance factories. These have been a far greater success than any other facility provided by the Government. They have to look to facilities for premises of industries that wish to set up in the area. This means looking carefully at the rates charged by local authorities.

Hon. Members must also be sure that their areas can provide, as the Morecambe and Lancaster area provides, a co-operative and helpful work force in an area favoured by good communications, as exist in most parts of the North-West. If that is done, the prosperity that hon. Members desire will come to their areas.

6.13 pm

Mrs. Gwyneih Dunwoody (Crewe)

I do not wish to detain the House for long, and I certainly do not wish to follow the line taken by the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd). The hon. Gentleman obviously believes that if the fun-fairs of this country are expanded, people will have some way of passing the time, even if they have no jobs. The ferris wheel may be the answer for some Conservative Members who have performed some extraordinary about turns in this debate. It is not the answer to the problems of the North-West.

The difficulty is that the country has a Prime Minister and a Secretary of State for Industry who believe in the total division of Great Britain. They believe that the South-East, and only the most affluent parts of the South-East, should be supported. This attitude is shown by the Government's attacks on industrial support and regional aid in the last 12 months. I have been fortunate in that I have represented a part of the North-West that contains a high percentage of skilled engineers and a wide range of industries to provide jobs for those engineers.

It is terrifying now to see the rate of unemployment rising even in what was regarded as a favoured area of the region. We are being subjected to the results of the first 12 months of Conservative government. Small businesses, in particular, are going bankrupt. The areas that will be hit by the Government's action are those that do not possess Government advance factories and rely heavily on assistance from Labour-controlled local authorities to build more industrial estates.

A great deal of play has been made since the Budget about the extension of what are called enterprise zones. I learned the hard way, as the Minister responsible for regional development in a previous Labour Government, that there is no easy way to bring jobs into an area that is losing many of its traditional industries. One needs a wide range of measures, across the board, not only to attract new factories but to encourage existing factories to expand. I fear that, in the North-West, the new so-called enterprise zones, that will be pirate zones, free of many of the restrictions on surrounding areas, will attract precisely that class of people—industrial pirates.

If there is one person worse than the man who takes advantage of every kind of Government aid and then spends all his time complaining about Government interference, it is the man who uses the idea of a pirate zone to boost the economy of his own company only to remove his firm as fast as possible when that support is removed, leaving behind him the wreck of what could have been a proper business if it had been soundly based. The Minister should say that it is not his intention to abandon the North-West to the simple idea that one can attract entrepeneurs, who do not seem to have taken advantage of the great benefits given to them in the last two Budgets, into an area such as the North-West and create jobs.

We are not interested in the extension of bingo halls and ferris wheels. We are interested in the creation of proper jobs and opportunities for employing our young people and renewing a dying industrial situation. Unless the Government change their attitude and their economic policy, there will be a rapid decline into an even greater recession. We shall be back to the 1930s with a vengeance.

6.17 pm

Mr. Alastair Goodlad (Northwich)

I, too, congratulate the hon. Member for Bury and Radcliffe (Mr. White) on the robust manner in which he kicked off the debate after years of enforced silence as "a usual channel". The hon. Gentleman did extremely well, considering the record of the previous Government in the North-West, not to shoot the ball more often into his own goal than he did. I deplore the absence from the debate of representatives of the Liberal Party. Not only has there been no speech from the Liberal Benches but there has not been a single Liberal Member in the Chamber. That is an indication of the importance with which the Liberals regard the North-West.

The case deployed by the Opposition against the Government has been feeble. The Government's realistic approach to the problems of the North-West has been exemplified by Merseyside's retention of its special assisted area status, the short listing of sites in Liverpool and Manchester as possible enterprise zones, and the setting up of an urban development corporation to deal with the development of the Liverpool dockside area.

I have been unconvinced by the attempted correlation by the hon. Member for Oldham, West (Mr. Meacher) who, I am sorry to say, has now left the Chamber, of unemployment with the withdrawal of assisted area status. In the Northwich travel-to-work area, in the last quarter, unemployment went down and the number of vacancies at employment offices rose by over 11 per cent. On a year-on-year basis, from the end of 1978, vacancies rose by over 38 per cent.

I want to dwell briefly on three points which have not been discussed at great length, and which I hope that my hon. Friend will refer to when winding up. They are infrastructure, energy and assistance to small businesses. As my hon. Friend the Member for Nelson and Colne (Mr. Lee) said in his excellent speech, communications are vital to the North-West, and they can be provided only by the Government. At present, we are well served by, and desperately dependent upon, our infrastructure, and it is vital that it is kept up to date. We have seen positive developments in air traffic at Speke and at Manchester Ringway, and I hope that those trends continue, particularly at Ringway, I hope that the Government will will the means of their continuance. We have seen positive developments in dock investment in Liverpool and elsewhere, and there have been positive signs of investment in the area by British Rail.

My right hon. Friend the Minister of Transport has said that a number of trunk schemes will not be affected by the Government's review of the trunk road programme, including the M63 Stockport east-west bypass and the A590 Ulverston bypass. He has also agreed to a 100 per cent. grant for the M531 Ellesmere Port-Chester scheme, and reaffirmed the grant awarded to the M602 Salford docks road.

Together with my right hon. Friend the Secretary of State for the Environment, my right hon. Friend the Minister of Transport has also approved statutory proposals for the Hyndburn to Burnley section of the M65 Calder Valley motorway and for the northern section of the A56 Accrington eastern bypass.

There are positive signs that there are many plans in the course of execution, and for the North-West it is vital that they should continue. From my own experience, I can tell my hon. Friend that Cheshire's road programme should be subject to as little delay as is humanly possible. Alleviation of the traffic problems of Tarporley and Eaton, to which I have referred previously, and Northwich, Kelsall and Tarvin are vital, not only to through traffic but as a means of halting the congestion in the area. Any delay will result only in greater expenditure in the future and unacceptable congestion in the meantime.

I turn to energy. We have heard about the difficulty of people obtaining gas supplies in rural areas. The same applies to industrial sites. There is no doubt that the current difficulties in supplying extra gas to companies and industrial estates are endangering industrial expansion in the North-West region. The problem has been caused not by a shortage of gas but by the high world price and relative shortage of oil, which has created an unbalanced market and given rise to an unprecedented level of demand for gas.

I understand that the present policy of North-West Gas is to fulfil its statutory obligation to connect new customers, to maintain supplies and to honour commitments already entered into, subject to some restrictions on quantity of supply to new industrial customers. I understand that plans to expand the national transmission network are being brought forward, and that the Morecambe Bay gas-field will be developed as quickly as possible.

I very much hope that my hon. Friend will urge the Secretary of State for Energy to ensure that British Gas, and especially North-West Gas, redouble their efforts, as it will have serious consequences for employment and output in the North-West if they do not.

I turn finally to small firms. As my hon. Friend the Member for Hazel Grove (Mr. Arnold) pointed out, the North-West is particularly dependent for employment upon small businesses. Last November, my hon. Friend the Under-Secretary of State for Industry announced a package to help small firms, including a new pilot finance scheme in the Eastern region, linking the Department's small firms service, and the Post Office staff superannuation fund. I hope that he will be able to tell us that steps towards a nationwide facility may not be too far off and that it will be extended to the North-West. I hope he will be able to tell us about the success of that scheme.

The package also included new workshops for small firms in shipbuilding areas, including one at Wallasey, and I hope that my hon. Friend will say a few words about the progress of those schemes. The package also included an extension of the small firms service by way of peripatetic visits to towns in order to see clients, and I hope that my hon. Friend will say something about the progress of that aspect of the scheme.

My right hon. and learned Friend the Chancellor of the Exchequer announced in his Budget Statement a range of measures to improve the climate for small firms. The greatest service which the Government can do to the North-West is precisely that. The hon. Member for Bury and Radcliffe said that the North-West had as good resources as anywhere in the country. Of course, the greatest of our resources is our people. We have heard success stories but the fact is that the solution to the problems of the North-West lies in our hands and in the hands of the people of the North-West. The commercial opportunities are there to be grasped, if we will grasp them. That we must do together.

6.26 pm

Mr. Jack Straw (Blackburn)

In the two minutes available to me I should like to urge the Minister to reconsider the Government's decision to cut off industrial aid to a large part of the North-West, and north-east Lancashire in particular. I do so for two reasons, which have occurred since the decisions were announced last year. First, exceedingly high interest rates are now penalising manufacturing industry. What is not realised is that high interest rates of the sort that obtain at present operate as a perverse regional policy. They are transferring millions of pounds from the manufacturing areas of the country, from the North-West and the North, to the City of London and the South-East. That is the effect of the Government's industrial policy. It transfers money from manufacturing firms to the banks, and I ask the Government to transfer some of those profits back the other way.

Secondly, officials of the Treasury have given evidence before a Committee of this House that employmeit in manufacturing industry will decline by 5 per cent. over the next year. On my estimate, that will mean a reduction in the number of jobs in the North-West of at least 30,000. Those jobs will go during the next year if the Government's own prediction about the effect of their Budget comes true. Does the Minister agree that if that happens there will be an overwhelming case for the Government reintervening and changing their industrial policy? All of us want industry in the North-West to succeed. It is the belief of Labour Members that Government policies are seriously damaging industry's ability to succeed.

6.28 pm

Mr. Charles R. Morris (Manchester, Openshaw)

I preface my contribution to this debate by joining hon. Members on both sides of the House who have congratulated my hon. Friend the Member for Bury and Radcliffe (Mr. White) on what was a thoughtful and perceptive speech. It reflected on his ability and on the wisdom of the electors of Bury and Radcliffe, who returned him to this House so convincingly at the general election.

This has been a good and hard-hitting debate on the problems facing the North-West. I believe that my parliamentary colleagues have mounted a formidable—indeed, unanswerable—case for a more positive response from the Government to the major problems which currently exist in the North-West region.

My hon. Friend the Member for Bury and Radcliffe reminded us that Lancashire and the North-West were the cradle of the world's first industrial revolution. One can perhaps describe Lancashire and the North-West as the world's first enterprise zone, but the sad reality is that in so many areas of the region we are still living with the industrial obsolescence and urban dereliction which flowed from Britain's Industrial Revolution.

I have noted the concern from both sides of the House which has been expressed during the debate, a concern which in no way wishes to make comments which reflect to the detriment of Lancashire and the North-West. I understand and share those feelings. I accept that Lancastrians, Merseysiders and other communities in the North-West are a proud industrious people, but I tell all hon. Members that we cannot close our minds to the problems of the North-West; we cannot ignore the realities of life for the people whom we represent in this House.

Understandably, my hon. Friends have expressed anger, anxiety and concern about industrial contraction and the growing unemployment now manifesting itself in the region. My hon. Friend the Member for Bury and Radcliffe, who opened the debate, rightly drew attention to the problems of the textile industry. We have witnessed the virtual decimation of the Lancashire textile industry as 260,000 jobs have been lost in recent years. Only 65,500 jobs now remain of the 326,000 jobs that once existed in the industry.

I am bound to warn the Government that the plight of the Lancashire textile industry has never been more critical. I do not need to remind the House of the Government-sponsored streamlined planning of over 20 years ago which closed 400 mills and threw thousands of mill workers out of their jobs in a bid to create a modern and viable textile industry.

Mill workers recognised and accepted the need for industrial change, as my hon. and learned Friend the Member for Accrington (Mr. Davidson) pointed out. Those workers accepted the need for change. They accepted shift-working. They have worked in co-operation with management, with the result that industrial relations in the Lancashire textile industry have been, and are, an example to many other industries. Yet mill workers find that mills are still closing at the rate of one a week. Is it any wonder that they believe that they have had a raw deal and that they feel that they have been let down? That is the background to the ominous warning given by Joe Quinn, the distinguished president of the Amalgamated Union of Textile Workers, at Blackpool the other day. He said that unless drastic action was taken to curb imports the industry could face extinction.

Along with my hon. and learned Friend the Member for Accrington, I do not suggest that the Government are responsible for all the difficulties confronting the British textile industry. However, I say that the Secretary of State for Trade seems, as I listen to him in this House, to reflect an attitude almost of complacency about the problems of the industry. We all know that those problems do not all flow from low-cost imports from underdeveloped countries.

I quote from an article by Sydney Rothwell, the commercial director of the British Textile Employers Association, in which he referred to problems arising from the fact that a number of Mediterranean companies enjoy associated status within the Common Market, which allows them to participate in the free circulation of imports within the Community. The articles states, that those associates have proved to be the least satisfactory area of control. Breaches of agreed or notified limits have been frequent. A particularly flagrant example of breaching an agreed ceiling is that of Turkish cotton yarn. Mr. Rothwell went on to deal with the problems associated with outward processing.

The practices to which I have referred cause major concern in Lancashire. They rank alongside the difficulties posed by those countries currently negotiating for, or taking up, full membership of the Common Market. I refer to Greece, Spain and Portugal. Some transitional arrangements must be made during the course of those negotiations for the entry of those countries into the Community.

Additionally, there are the difficulties which flow from the dual pricing policy of the United States on fuel, which enables its man-made fibre industry to undercut British manufacturers. These problems, added to the prospect of textile imports from China, are, to say the least, worrying. I agree with those in Lancashire who believe that it is the very survival of the British textile industry which is now at stake.

However, if there are major problems facing the textile industry, equally serious difficulties confront other areas of manufacturing industry in the North-West. There have been appreciable contractions in the steel, engineering and coal mining industries. The number of jobs has fallen dramatically in the ports of Liverpool and Manchester, and even in the fishing industry at Fleetwood. The problems of that industry have been on occasions movingly described by the hon. Member for North Fylde (Sir W. Clegg).

A report prepared by the economic group of the Greater Manchester council planning department last December said that throughout the seventies the North-West has consistently been one of the four most severely affected regions in terms of unemployment. In the past two years the North-West has suffered over 20 per cent. of national redundancies, the highest of any region in spite of having only 12 per cent. of national employment. The report went on: It is significant that it is the only one of those four regions not to have had virtually complete Development Area status. I believe that the deteriorating nature of the regional economy is perhaps best illustrated—as some of my hon. Friends have recognised—by the number of unemployed people per unfilled vacancy. In February 1980 a news-letter from the North-West Industrial Development Association records that the ratio of people unemployed per notified vacancy in the North-West now stands at 15.5 compared with 8.3 for the United Kingdom as a whole. In the travel-to-work areas of Wigan and Rochdale there are over 20 people for every registered vacancy. In St. Helens there are a 42.2 people for every vacancy.

Mr. David Young (Bolton, East)

Does my right hon. Friend feel—as I do—that the present Government have written off the North-West and regard the people of the region as expendable?

Mr. Morris

I thank my hon. Friend for that forceful contribution. However, I shall judge this Government on their record. I shall be content to judge them on how they face the problems that confront the North-West.

I was referring to the number of unemployed persons to every registered vacancy in some areas of the North-West. I felt for my hon. Friend the Member for Liverpool, Kirkdale (Mr. Dunn) as he spoke of the frustrations of young people faced with the current situation as they seek employment. Significantly, the figures that I have quoted are substantially worse than those for either Scotland or Wales.

It is against that background that I say to the Secretary of State for Industry that his decision to withdraw assisted area status from Manchester and many areas of Lancashire, Greater Manchester and the North-West and to abolish the North-West Economic Planning Council was short-sighted and insensitive. That decision was a political kick in the teeth for the region and for those communities there which already have to face enough problems. That decision was justified—as hon. Members on both sides of the House will recognise—by statistics based on geographical areas within the context of travel-to-work areas which I believe are wholly unrealistic.

It was argued at the time by Tory Members that public expenditure must be cut back to reduce taxation. The priority under which the Chancellor of the Exchequer afforded tax handouts to the rich is, I believe, typical of the Tory philosophy which permeates current Government thinking—that is, the philosophy of "placate the greedy and ignore the needy".

I sometimes wonder whether the Government either know or care what effect their policies will have on the lives and futures of men, women and children in the North-West. We need in the region industrial regeneration, not industrial stagnation. I suggest that the Government ought to examine the possibility of a development agency for the North-West. It would at least act as a focal point for inward investment and would thereby generate the capital that is essential for industrial expansion.

I turn to the anxieties in the Northwest about the quality of life in the region. It staggers me that the Government can be proposing and implementing cuts in education, housing, health and hospital building in the North-West, because I am always mindful of the point made in the "Strategic Plan for the North-West", published in 1975: The North West is clearly in need of considerably more effort and resources before a state of balance can be claimed; until this need is met, the region will continue to be left behind the more favoured regions and its economy and quality of life will continue to suffer... at least a decade of special effort is necessary to establish a reasonable balance between the North West and other regions. We are halfway through that envisaged decade of special effort.

I would like to quote from a briefing prepared by the North-West regional health authority: If you live in the North Western Region, your expected life span will probably be shorter than the average for England and Wales by at least two years and you will be more at risk for certain diseases throughout that life. There is statistical data which indicates that the North Western Region experiences more deaths from all causes than any other Region in the country and certainly the highest ratio of deaths from diseases of the circulatory and digestive systems … In regard to perinatal mortality rates the North Western Region has been consistently worse than the average for England each year from 1973". What I want for the North-West is tougher action to curb textile imports, an examination of the statistical bases for granting assisted area status in the context of the communities in the North-West, consideration of the establishment of a development agency for the North-West and consideration of a new plan for redressing the imbalance in education, housing, health and hospital provision in the North-West, compared with other areas.

I remind the House that the debate concerns a region which, historically, has made a major contribution to the industrial and economic well-being of the nation. Time was when Lancashire and the North-West were regarded as the workshop of the world, but many Lancastrians and many others in the North-West tend to become cynical when they hear the Prime Minister and the Chancellor of the Exchequer prattling on about creating a State in which opportunity will flourish.

The people of the North-West understandably pose the following questions: when are they to have the opportunity to work in jobs with a secure future? When are they to have the opportunity to see their children being educated in modern school buildings? When are they to have the opportunity to see the sick and infirm in the North-West treated in modern hospital buildings?

Nothing is more destructive of the established political order than the frustration and cynicism engendered by politicians, who, obsessed by their own polical objectives, ignore the serious problems with which those in the regions are obliged to live.

Political theorists explain that the "two nations" syndrome arises when two standards exist within one country. The fear of many in the North-West is that, for their region, two nations is fast becoming a reality.

6.45 pm

The Under-Secretary of State for Industry (Mr. David Mitchell)

I am glad to have the opportunity of participating in the debate on the problems of the North-West and making a Government comment on it. A number of hon. Members have congratulated the hon. Member for Bury and Radcliffe (Mr. White) on the happy style of the delivery of his opening speech and on at least some of the content. I agree with the hon. Gentleman's comments about the warmth of character and fine natural resources that are found in the Northwest. In opposition I visited the area to meet groups of small business men and I was touched by the warmth of the welcome that I received. I have also visited the area as a Minister.

I find it difficult to agree with the hon. Gentleman's fairly exaggerated attack on the Government and his suggestion that it has been previous Conservative Governments who have failed to restore the area. He overlooked the fact that the problems, particularly the entrenched problems of Merseyside, have survived many Governments and have existed for a long time. We need changes of policy and of emphasis, to which I shall be referring.

I was fascinated when the hon. Gentleman complained about local authority services being cut and, in the same breath, complained about the level of rates. He seemed to do that without noticing any inconsistency, but he did it charmingly. The hon. and learned Member for Accrington (Mr. Davidson), who is, perhaps, older and wiser, warned of the dangers inherent in running down an area. The right hon. Member for Manchester, Openshaw (Mr. Morris) appealed for restrictions on textile imports. I shall return to that subject, because it was one of the themes of my hon. Friend the Member for Rossendale (Mr. Trippier) and I wish to comment on what he said.

My hon. Friend the Member for North Fylde (Sir W. Clegg), in a penetrating speech, made clear that pouring Government money into an area did not provide an instant solution to its problems. He is correct. The previous Government followed that policy and doubled unemployment, paying for it with printed money, leaving us with the legacy of inflation that we have to tackle. My hon. Friend also stressed the importance of small businesses, a recurring theme in the debate to which I shall return.

My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) drew attention to the importance and value of the European Investment Bank. As so many hon. Members in the Chamber represent assisted areas, it may be helpful if I say that I recently signed an agreement in Luxembourg with the European Investment Bank for £20 million at 11 per cent. interest, fixed for seven years. Many hon. Members may find it useful to draw the availability of that money to the attention of large and small businesses in their constituencies.

I mentioned small businesses, because we have broken down that sum into parcels of investment of £17,000. The totality of the investment has to be £34,000, but half can come from the European Investment Bank, at 11 per cent. interest, plus 1 to 2 per cent. insurance cover against changes in the exchange rate—a risk that most businesses would wish to cover against. Against the background of current interest rates, that is a valuable provision.

Mr. Arthur Davidson

Is this restricted to assisted areas?

Mr. Mitchell

Yes, it is restricted to assisted areas. There is, therefore, a large area of opportunity. Existing assisted areas can come forward now with their requests. I shall be happy to help the hon. and learned Gentleman if he has any constituency problems.

The hon. Member for Lancaster also drew attention to some units of CoSIRA which were to be built just outside Lancaster, and was distressed that the Department of the Environment was not enthusiastic about that project. The whole purpose of CoSIRA is to help in the rural areas, and particularly in the matter of rural depopulation. It is difficult to see an area that is only three miles outside a major town as being genuinely representative of the problems of the rural area and rural depopulation.

The hon. Member for Manchester, Gorton (Mr. Marks) expressed his concern about education, and I shall draw his remarks to the attention of my right hon. and learned Friend the Secretary of State for Education and Science.

My hon. Friend the Member for Hazel Grove (Mr. Arnold) talked about the importance of small businesses, and I shall return to that subject. He also referred to the very important question of the derelict land clearance areas. There is automatically a 100 per cent. grant in the assisted areas, and in relation to the ex-assisted areas the 100 per cent. grant becomes available if they are declared as derelict land clearance areas. The Department of Industry does the designation and the Department of the Environment pays the money. We are at the moment considering the matter in depth and a statement will be made as soon as possible.

The hon. Member for Preston, South (Mr. Thome) made an interesting contribution but it was a somewhat difficult theme to follow. His suggestion that the Tories seek to destroy the Welfare State is a total misrepresentation of what we are about. I have sat in this House for 16 years, and nothing has disturbed me more than the way in which standards of welfare in pensions and hospitals on the Continent have gone ahead so much faster than our standards in this country.

I ask myself why that is so, and the answer is very simple. It is because people on the Continent have been concerned about how to create wealth and about encouraging industry and commerce, whereas in this country we have been concerned only about how much we can get out. I must say to the hon. Member—unfortunately he is out of the Chamber at the moment—that one has to bake one's cake before one can eat it. That is an essential part of the common-sense approach to the problems that we face.

My hon. Friend the Member for Nelson and Colne (Mr. Lee) proposed that the Department of Trade should have the loan of some textile executives to help in dealing with the problem of investigating dumping. That is a very interesting and useful suggestion. I should like him to come to see me and discuss this with me in some detail very shortly. My hon. Friend also called for an initiative by the banks in enterprise zones. That was a thoughtful and thought-provoking suggestion, demonstrating the value of debates of this sort.

My hon. Friend the Member for Preston, North (Mr. Atkins) drew attention to the need for lower rates in order to attract business into a particular area. He revealed that the Preston borough, which has a Conservative-controlled council, is the lowest rated authority in the United Kingdom, and has achieved this at the same time as improving its services. As a result, many businesses now want to go to Preston. I can well understand not only his "commercial" for Preston but the success that Preston is achieving in attracting businesses.

The hon. Member for Stockport, South (Mr. McNally) complained about inflation and minimum lending rate. It was like complaining about a disease and about the treatment prescribed by the doctor for dealing with it—a somewhat irrational attitude to take.

Mr. McNally

It is killing the patient.

Mr. Mitchell

I suggest to the hon. Member that the full extent and the full seriousness of the disease were not apparent at the time of the last general election. I put no blame on Labour Members for not recognising it. The reality is that it takes from 18 months to two years for the increase in the money supply to come through in rip-roaring inflation. We are now coming up to the high tide of the inflation that was peddled by Labour Members when their party was in office.

My hon. Friend the Member for Rossendale—who is assiduous in his attention to the problems of the valley that he represents—talked about the MFA and drew attention to the fact that it does not solve all the problems of the textile industry. We recognise that textiles are under great pressure at the moment. The longer I have been a Minister, the more I have come to believe that the MFA was oversold to the industry as being a panacea for all its problems, whereas it presents many very serious difficulties for the textile industry in its operation at the present time.

My hon. Friend referred to the footwear industry and to his concern about the working of the retail commitment and the problems of imports. I have recently met the footwear EDC and I have been to see the Footwear Trade Association. I plan to visit the trade union at its headquarters. I have held a number of constructive discussions and I understand that it is coming forward with certain proposals.

My hon. Friend the Member for Morcambe and Lonsdale (Mr. Lennox-Boyd) talked about the way in which his constituency has seen an increase in employment at a time of world recession. He is to be congratulated, and so is the prudent local authority that has succeeded in keeping the rate down in his area.

My hon. Friend the Member for Northwich (Mr. Goodlad) referred to infrastructure and to the need for an end to road congestion. I shall write to the Minister of Transport to draw his attention to my hon. Friend's points. My hon. Friend will recognise that his point about gas supplies is a matter for the Department of Energy. I shall draw its attention to his point.

Throughout the debate there have been recurring themes related to the need for assisted area status—as if it were some sort of virility symbol—the importance of small businesses in job creation, and the role of local authorities.

The whole concept of the changes that my right hon. Friend has made in the assisted areas has been attacked but one after another Members have admitted that after so many years the problems of the assisted areas remain the same. One hon. Member referred to the 1930s. The real worry and concern is that, in looking at the areas which in the 1930s were at the heart of the problems of the depressed areas, we find that far too many of them today are the special development areas. Clearly, we have not yet succeeded in resolving these problems.

The hon. Member for Liverpool, Kirk-dale (Mr. Dunn) called for a reappraisal of Government policy. We have reappraised Government policy. That is why we brought in the changes which concentrate the assistance on the special development areas in a way that has not been done before. The hon. Member should realise that when we came to office we found that 40 per cent. of the country had assisted area status. On the criteria being employed, well over 50 per cent. of the country would have had it by now, so one would simply be taking money out of one's pocket in order to put it back in again, and that solves nobody's problems. Spread too thinly, it is of little value to the special development areas. We are concentrating the help on those areas and increasing from 2 to 7 per cent. their special differential advantage. In this way we are at least moving towards a policy that will help those in greatest need. The constant theme was "What about the other parts of the North-West that are not special development areas, those that are to be downgraded? " If one takes the whole of the North-West, without Merseyside, one finds that the average level of unemployment is only 6.2 per cent., compared with a national average of 6 per cent. I believe that on that basis hon. Members would think it right that we should concentrate help in the way that we have in the areas of greatest need.

Mr. Straw rose——

Mr. Mitchell

I apologise to the hon. Gentleman for not giving way. I started late, and I have a great deal of ground to cover. Many hon. Members have made points, and I do not want to leave them out.

In a very interesting speech, my hon. Friend the Member for Lancaster spoke of the large number of jobs that had been lost in her constituency over the past decade, and the number of new jobs that had come from the development of new businesses and small firms. She was right to draw attention to that.

My hon. Friend and a number of other hon. Members mentioned the importance of premises for small businesses. We have now received, and we recently published the report of an inquiry that the Department of Industry commissioned into the problem of premises for small businesses. As a result of that inquiry, carried out by Coopers and Lybrand and Drivers Jonas, it is clear that across the country as a whole there is a substantial shortage of premises suitable for small businesses, and that there are significant opportunities for investment in them by the private sector.

The Department has £5 million allocated for building premises for small firms' workshops, which it will use in partnership with the private sector. Geared up, it will produce a thousand units.

Mr. John Evans

Chicken feed.

Mr. Mitchell

Compared with what happened under the hon. Gentleman's Government, a thousand units in the assisted areas represent a major advance.

We recognise that that is not sufficient. That is why my right hon. and learned Friend the Chancellor of the Exchequer introduced in his Budget the 100 per cent. allowance for small firm's workshops for three years. Therefore, all the way down the line there is a series of measures designed to help ensure that small firms' premises are available.

The lack of premises may stop small firms from starting. When the premises exist many more people will take the opportunity to start a business. I am glad to be able to report to my hon. Friend the Member for Northwich, who asked for a report on this matter, the progress that we are making.

I turn to the question of local rates. An extraordinary position has been repeatedly revealed during the debate by my hon. Friends who represent some of the constituencies in the area. I made a note of the significant effect, shown by hon. Member after hon. Member, of the level of rates on the attractiveness of an area for the birth of new businesses, the growth of existing businesses and the creation of jobs. It is fascinating to compare Preston, with a 14 per cent. increase in its rates under a Conservative council, with Gorton, with a 28.8 per cent. increase under a Labour council, and Oldham, a Conservative majority and an increase of 15.9 per cent., with Stalybridge and Hyde, Labour, 33 per cent. North Fylde, 16 per cent., Rossendale, 14.5 per cent. and Lancaster, 16.7 per cent., all Conservative controlled—[Interruption.]

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order. The Opposition Whip, the hon. Member for Newton (Mr. Evans), might give a little assistance to the Chair by seeing that there are not constant interjections from a sedentary position.

Mr. Mitchell

All the Conservative-controlled authorities that I have mentioned have very low rate increases and are therefore very attractive in terms of job creation in their area. We tend to think about rates in terms of the householder, without recognising that jobs are also at stake if a council increases its rates too much.

My hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) drew attention to the proposed rate increase of no less than 49.9 per cent in Liverpool. How on earth can one expect to attract small firms and job creators into such areas?

Because time is running out, I turn to the revealing remark made by the hon. Member for Stockport, South which was acclaimed by Labour hon. Members, that it was up to the Government to make industry successful. This is the fundamental divide between the Opposition and the Government. The Opposition pretend that Government-printed money can make industry successful. We know that it is not in the gift of the Government to do it. It is for the Government to create the circumstances; the decision whether industry will be succesful will be made by men and management together—a partnership of skilled men, motivated management and capital, for he also serves who only puts up the money.

The right hon. Member for Manchester, Openshaw spoke of the time when jobs would be secure. I can give him one answer. They will be secure when both men and management can supply the customer with the goods he wants at the price he is prepared to pay. That is the future, not only for the North-West but, upon that criterion, of our whole national economy.

Mr. Deputy Speaker

We now proceed to the debate on Yorkshire.