NORTHERN REGION

HC Deb 21 January 1980 vol 977 cc29-101

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

3.33 pm

Mr. Ian Wrigglesworth (Thornaby)

It is a great pleasure to address the House on the problems of the Northern region, because that region and its 3 million people have a unique claim to the attention of the House. Put simply, they have suffered greater economic and social deprivation than any other part of the United Kingdom, other than Northern Ireland, for virtually the whole of the last decade. I welcome this opportunity because the House and the Government must ask themselves how much longer this state of affairs can be allowed to continue and, possibly, to get worse.

We need to consider what steps should be taken to rectify the position, which has existed for so long. Geographically, this country is largely still two nations, with the North suffering economic and social deprivation of an order that is not fully appreciated in the South. The North has many attributes and good features. I do not propose to go into those this afternoon, although, doubtless, hon. Members will want to sing the parises of their constituencies today.

In referring to the Northern region, I include not only the North-East but the beautiful Lake District and the Pennines. We cover the whole of that beautiful area. However, it is not upon those areas that I wish to concentrate. The North has many successful industries with high productivity and good industrial relations comparing with the best in the country. But it is not of that that I shall be speaking this afternoon. We have such fundamental problems that the House must address itself to them and consider solutions that can be introduced by the Government and by the public authorities in the region.

At the core of the region's problems is the persistent high level of unemployment. At present, 117,000 men and women are without jobs, a rate of about 8.5 per cent., compared with a rate for Great Britain of 5.5 per cent. The level there is 55 per cent. higher than the average for Great Britain, and it represents a staggering figure. That state of affairs has existed for most of the last decade and, in some cases, even before that.

There has always been a wide differential between the individual regions and the national level. That gap is now widening, as it has been for the past decade, with over 20,000 redundancies per annum occurring in traditional industries over recent years. Individual areas such as Hartlepool and Consett have even higher levels of unemployment than the region as a whole. We also have the highest ratio of unemployment to unfilled vacancies of any part of the country, a figure of 13.4 to 1, which compares to the next highest of 11.7 to 1 in the North-West. There are 10 unemployed people for every vacancy in the region as a whole, whereas in Great Britain the figure is five unemployed for every vacancy. Last year, when unemployment dropped in the rest of the country, the North had to run hard just to stand still and hold unemployment at the level that existed at the beginning of the year.

The outlook is potentially disastrous, and, on the basis of national forecasts and the figures that I have seen for the region I believe that unemployment may rise from 117,000 towards 150,000. The Government are forecasting a drop in private and public investment in the country in the forthcoming year. Compared with previous years, there is also likely to be a substantial drop in the level of growth nationally, and all this comes on top of the region's severe structural problems, which are caused by the continuing decline of traditional industries such as shipbuilding and coal mining.

In coal alone, the numbers employed dropped from 602,000 in 1960—my hon. Friend the Member for Easington (Mr. Dormand) will be aware of these figures—to 285,000 in 1968. I obtained those figures from the speech of the hon. Member for Canterbury (Mr. Crouch) in a debate last week. He drew them to the attention of the Government, and I happily repeat them to remind hon. Members of the blows that traditional industries in our region have had to sustain. The story for shipbuilding has been much the same. My right hon. and hon. Friends who represent Wearside constituencies will know of the disasters that have befallen that industry, and that applies to Teesside and Tyneside. Every part of the region has been hit by substantial redundancies in recent years.

The steel industry is another example. In my area of Cleveland, as in other parts of the region, that industry has been hard hit, and it will be hit even harder over the next few years. There have been disastrous closures in other industries—Courtaulds at Spennymoor, Vickers on Tyneside, and, just the other week, the John Collier closure on Teesside, with a loss of 900 jobs. Hardly a week has gone by in recent months when I and, I am sure, my hon. Friends have not had closures taking place in our areas in the region. There has been hardly a week—

Mr. Robert C. Brown (Newcastle upon Tyne, West)

Hardly a day.

Mr. Wrigglesworth

Yes, as my hon. Friend says, hardly a day when closures have not been announced. The situation is about as bleak as one could imagine.

All the details of the difficulties facing the region were brought together in a report by the Northern region strategy team, published in 1977. I do not want to rehearse all the facts produced in that report or in the review of progress that was made public in February last year.

It was clear from the detailed work done by that highly professional strategy team that we had in our region a higher proportion of unskilled workers, that we had lower educational attainment—only 15 per cent. of our children going on to further and higher education compared with 22 per cent. in the rest of the country—and that we had a higher incidence of sickness and disability, with twice the national average of disability benefit and sickness benefit being paid in our region, the reason, of course, largely being the character of the principal industries in our area, mining, shipbuilding and the like.

In our region there were more pensioners on supplementary benefit than there were in any other region. Moreover, about 100,000 houses-10 per cent. of our stock—were unfit or substandard and not fit for occupation. Those facts are an indication of the truly depressing picture of our region, and they show why we have a unique claim on the attention of the House.

I shall now look at the way in which, over their nine months in office, the Government have begun to deal with these problems—if "deal with" be the right expression. In fact, they have not dealt with them at all. They have made them worse, exacerbating the problems of the Northern region. There has been a whole chapter of announcements attacking the region's economy and its structure. I am sorry to have to say that, and it gives me no pleasure to do so.

All this is a far cry from the time, which my right hon. Friend the Member for Stockton (Mr. Rodgers) and others who have been here longer than I have will remember in 1962, when—I recall it clearly—Lord Hailsham visited Thornaby, Stockton and other parts of the Northern region, doffing his flat cap. Just as my hon. Friends were, I was incensed by the patronising attitude shown by the noble Lord in putting on that cloth cap and parading himself about the region.

Nevertheless, I say this for the noble Lord: at least, what he did was better than what the present Government are doing, since they are reversing the very policies that were introduced at that time by Lord Hailsham, who, I remind my hon. Friends, is still a member of the Cabinet.

With the White Paper following his visit, Lord Hailsham began a whole programme of public works and other activities, which led to substantial employment in the Northern region and in some ways, indeed, provided the infrastructure for the growth throughout the 1960s which has so much fallen off since then.

It is that policy that the present Government ought to be pursuing, not their policy of rolling back intervention in the economy of the region as they now are.

The national economic prospects are grim. With the Government's obeisance to monetarism throttling the country's economy, we have low growth, high interest rates, low investment and a high exchange rate—all of these punishing industry throughout the country and especially in the Northern region, where we are more vulnerable in some respects to these influences.

In their regional policy, the Government have made a direct attack upon the help and support given to the regions. The measures of 17 July cut regional aid by some £233 million. That is a cut of nearly 40 per cent. on what it would have been, and this at a time when the need for that assistance will grow and grow.

On 1 August development area grants in our region will be cut from 20 per cent. to 15 per cent., and there will be no grants at all in intermediate areas. The qualifying levels for grant for plant and machinery are to be raised from £100 to £500 and the qualifying levels for buildings from £1,000 to £5,000.

I am pleased that the Under-Secretary of Slate who has responsibility, among other things, for small businesses is to reply to the debate, since that is one matter, apart from a couple of others to which I shall come later, on which I want a reply. How can he approve the raising of the thresholds for grant from £100 to £500 and from £1,000 to £5,000 when this will obviously directly hit small businesses and new businesses that are Loping to establish themselves? We all know—the report of the strategy team made this clear—that the one thing that we need in the Northern region is the growth of indigenous businesses and small businesses, yet what the Government have done will directly weaken the incentive for the establishment and growth of small businesses.

In addition, the Government have raised the exemption threshold for industrial development certificates in London and the South-East and other non-assisted areas to 50,000 sq. ft. As my right hon. Friend the Member for Swansea, West (Mr. Williams), the former Minister, pointed out in the debate on regional policy, this means that not only will offices and other developments of 50,000 sq. ft. and more be built in the South, but provision can be made almost on the nod for its extension to double that size, with the consequence that much larger plants well above 50,000 sq. ft. may well be lost to the Northern region.

There have been changes also in the designation of special development areas and development areas. I note—I hope that the Minister will explain this against the background that I have described—that all the upgradings in respect of designated areas are outside the Northern region, and we have only downgradings.

How can the Minister justify those changes of status when in Alnwick, for example, there was unemployment of 7.1 per cent., in the Darlington and South-West Durham area there was unemployment of 7.1 per cent., in central Durham there was unemployment of 7.4 per cent., in Morpeth the level was 8.8 per cent.. in White haven it was 8.3 per cent. and in Workington it was 8.1 per cent.

How can the Minister justify downgrading those areas in face of the unemployment figures that I have given? I should point out that they are not the present figures—they are higher now—but were the figures at the time when the decision was taken last July.

As a consequence, the special temporary employment programmes and the employment transfer schemes are available in fewer areas in the region than they were hitherto.

All these cuts in regional aid—my hon. Friends realise this only too well—are going to help make up the tax rebates that are being handed out throughout the rest of the country irrespective of whether people in those other parts need them.

I could go through a long story of recent Government actions that are hitting our region, but I know that many of my hon. Friends wish to speak and I do not want to take too long. Let me just mention that the Government are closing skillcentres, for example. These are the places which give people training. As I said earlier, one of our problems in the Northern region is that we have too many unskilled workers. This is one of our structural problems. Fifty per cent. of our unemployed people are unskilled. But what are the Government doing at a time when unemployment is rising and we have more unskilled people on the dole? They are closing the training centres that could have given people skills.

The Government have closed the Location of Offices Bureau, the bureau in London whose job it was to help firms to move out into regions such as ours. We have the same story in the dispersal of civil servants. We were to have 3,000 civil servants from the Property Services Agency dispersed to Middles rough, the constituency of my right hon. Friend the Member for Middles rough (Mr. Bottomley). The plan for the Government Chemist to go to Cumbria has been cancelled, so that we shall not have those desperately needed white-collar jobs which could have assisted the employment structure of the region.

There has been a cutback in the activity of the National Enterprise Board. If the guidelines for the national board are strictly adhered to, the result will be a severe emasculation of the activities of the Northern region board. Week after week and month after month we campaigned for Inmos to come to our region. An assurance had been given—myright hon. Friend the Member for Swansea, West can, I think, confirm it—that the first Inmos plant would go to an assisted area. It has not done so; it has gone to Bristol. Why has it not come to the Northern region, where we have the skills and the plant available and where the technology and the new jobs are desperately needed?

The Government have abolished the regional economic planning council, which was the focus to which the Northern regional strategy team worked. It did much of the work on the campaign that we ran to try to get the new Inmos plant into the region.

I have mentioned the hammer blow of closures and redundancies that have taken place. During the debate on regional policy, the Secretary of State for Industry said: There has to be enterprise, competitiveness, high productivity and a reputation for co-operation between management and the work force in the assisted areas if they are to reach the level of employment that we all want them to reach. We need more indigenous growth in the assisted areas. That is why the changes in climate and economic context which we have set ourselves to try to achieve are so relevant to the assisted as well as to the non-assisted areas."—[Official Report, 24 July 1979; Vol. 971, c. 373.] That is a joke when we consider the atmosphere that I have described.

Are the Government suggesting that in the Northern region we do not have the enterprise, the competitive spirit, the productivity and the good industrial relations to which he was referring? The facts speak for themselves. The region possesses those qualities. However, the Government's actions and economic policies are killing the very things that the Secretary of State says that he wants to encourage.

I have a letter from the Teesside Small Business Club. I am sure that the chairman will not object if I quote it. It happened to reach me last week in response to representations that I have been making to Ministers on behalf of the club. I think that the Under-Secretary of State knows the Teesside Small Business Club. It contains much enterprise, energy and initiative. I note that the Minister confirms that. He nods his head vigorously. I do not know whether he will nod so vigorously when he hears the contents of the chairman's letter. The chairman wrote: May I say that it is the consensus of opinion that the Government have not as yet done anything concrete for small businesses and we feel that their efforts have not in any way relieved the pressure on finance. On the contrary their increase in bank rates has had a terrible impact. That is the verdict of one small but energetic business club. That is what it thinks about the Government's policies.

What should be done to overcome the problems? There is substantial evidence that regional policy has worked effectively. That evidence may be drawn from the eighth report of the Expenditure Committee and from other reports. I shall not go through all the figures. I merely say that they are available to hon. Members.

Bearing in mind the evidence that is available, the needs of the Northern region and the effectiveness of regional policy, I ask the Minister to reconsider the designation of areas and levels of grant for areas that have levels of unemployment that are consistently above the average. We believe that they should be reconsidered. We contend that designations as well as levels of grant should be returned to their previous levels. We hope that the Under-Secretary of State will make an announcement about that before the debate ends.

Secondly, I hope that the Minister will vigorously pursue and support proposals made by the European Parliament and by others for the development of EEC funds for the regions. The regional fund has made major contributions to the Northern region. It has been one of the greatest recipients of EEC funds. If there is an increase in the level of funds made available as a result of the row that is taking place about the budget, I hope that we shall be able to obtain even more substantial funds from that source.

Thirdly, I hope that the Government will maintain policies to redistribute Government and public expenditure in favour of the regions. That should apply across the board, but in the Northern region we are especially aware of the needs of the Health Service. I hope that the Minister will tell us that the policy of redistributing resources within the Health Service will not be reversed and that the inequalities that have existed between the Northern region and other regions, especially London and the South-East, will be overcome by the payment of larger sums to the Health Service in the region.

Finally, I ask the Minister to tell us whether the Secretary of State is in a position to make an announcement on the establishment of a northern development agency. We have been pressing for such an agency for a long time. We succeeded in convincing our colleagues in the Labour Government and in the Labour Party of the need for it. It featured in the Labour Party election manifesto. The Labour Party said that it would establish such an agency. It was recognised that there was urgent need for it.

We want the agency to have substantial initial capital. At present, job promotion in the region is carried out by the Department of Industry, the Manpower Services Commission, the English industrial Estates Corporation, the NEB regional board, the former economic planning council, the North of England Development Council, by EEC regional aid funds, by local authorities—indeed, by Uncle Tom Cobbleigh and all. We want to see a focal point for job creation in the region, and it should be a northern development agency. That is a proposal that has come from not only the Labour Party. It has received wide support in the region, including the CBI regional committee. I hope that the Government will give it serious consideration and will adopt it.

It is sad that I have had to concentrate on so many of the deficiencies and problems of the region. There are many good features, many good firms and many high levels of productivity that benefit Britain. If the Government want to suc- ceed in realising the achievements that the Secretary of State for Industry outlined, they will have to give the Northern region hope for the future. That will be necessary if the enterprise and initiative that they want to see are to flower forth and result in jobs.

My hon. Friend the Member for Consett (Mr. Watkins) tells me that there are about 3,700 steel redundancies in the offing in his area. Those redundancies will not be avoided by developing private enterprise, tax cuts and the plethora of promises in the Tory manifesto.

The whole of the Northern region is Consett writ large. Towns such as Consett and Hartlepool will not respond to blathering about tax incentives and other Tory dogma. We need firm Government initiative, financial support and other support of the sort that was provided by the previous Labour Government. That is what will help to revive the region, and that is what we are asking for this afternoon.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

The attendance in the Chamber indicates that this is an important subject and that many right hon. and hon. Members will wish to catch my eye. A self-denying ordinance on speeches would be not only fair but generally welcomed by the House.

3.58 pm

Sir William Elliott (Newcastle upon Tyne, North)

First, I congratulate the hon. Member for Thornaby (Mr. Wrigglesworth) on the manner in which he delivered his speech and on the content of the first part of it, with which I have no disagreement. Of course, I have disagreement with many of the comments in the second part his speech.

Both sides of the House are at one—I refer to right hon. and hon. Members who represent the region—in appreciating its peculiar and particular problems. We have tried jointly over quite a period to solve those problems, and not without success. It was fair of the hon. Member for Thornaby to suggest that there is much in the Northern region of which we may be proud. We have some fine firms, some good employers, and some splendid work forces. However, our problems remain.

I took issue with the hon. Gentleman when he suggested that the policies of the past eight months have brought all the troubles upon our heads. Let us take the period since the war as part of our consideration. The representation of the Northern region in this place has not, I am sorry to say, changed all that much during that period. Until the general election I used to say, from an almost solitary position on the Opposition Benches, that that was a temporary embarrassment. I have stopped saying that for a while. I shall start again presently.

The years since the war have seen Conservative Governments and Labour Governments in office for an equal number of years. Representation during that period may be divided in two between Conservative and Labour Governments. There has been as much Labour Government as Conservative Government. I hope that the hon. Gentleman and his hon. Friends will accept at least a measure of any responsibility that there may be for any troubles in the region being due to Government action. I put a rather different aspect to the matter. Both major parties have tried to solve the problems of the region.

I was sorry that the hon. Gentleman returned to raising, once again, Lord Hailsham's visit to the region in the early 1960s. I accompanied Lord Hailsham on his visit. The day that he bought that cloth cap was the stormiest of days—rather like today—and I assure the hon. Gentleman that the only thing that would have stayed on his head was the cap that he bought. That incident has given the hon. Gentleman and his colleagues something to say in successive debates over the years.

The Hailsham report has been the blueprint for regional development, not only in the Northern region but in every development area in Britain. The report's recommendations were fully noted and acted upon by both Conservative and Labour Governments. Our region would be in a much worse position without that report.

The problem of the Northern region is one of declining industry. The hon. Member for Thornaby did not need to seek the guidance of my hon. Friend the Member for Canterbury (Mr. Crouch) if he required information on the declining numbers employed in the coal mining industry.

Mr. George Grant (Morpeth)

The hon. Member for Newcastle upon Tyne, North (Sir W. Elliott)—who is one of my constituents—understands the problems of the Northern region. However, the number employed in the mining industry has declined from 50,000 to 7,000 despite the success or otherwise of regional policy from Lord Hailsham onwards. Will the hon. Gentleman tell the House why the Government, with all the problems that we face—such as youth unemployment and general unemployment figures between 10 and 15 per cent.—decided to reduce the status of the area from special development area status to development area status, with all the attendant losses?

Sir W. Elliott

I shall be delighted to try to answer that question. I appreciate that the hon. Member for Morpeth (Mr. Grant)—who is my representative in the House—feels strongly about the problems of his constituency. So do I. I was born in that constituency and I know it well. After a number of years of Labour Government, what have been the results of the emphasis on aid during that period? Did the Labour Government solve the problem of unemployment in the North-East? The answer is "No". During 17½ years of both Labour and Conservative Governments, it would not be unreasonable or unfair—but accurate—to say that under periods of Labour Government unemployment in the country, especially in the Northern region, has risen. During periods of Conservative Government, unemployment has fallen.

The Government were elected to change the course of our economic policy.

Mr. Giles Radice (Chester-le-Street)

They were not elected in the Northern region.

Sir W. Elliott

I accept that we did not have the electoral success in the Northern region that we had in other parts of the country, but we did not do too badly. I am sure that it has not escaped the attention of the hon. Member for Chester-le-Street (Mr. Radice) that I am still a Member. With most of his hon. Friends, the hon. Gentleman is aware that an enormous effort was made by the Labour Party in the Northern region to prevent my return to the House, but here I stand today.

The Government were elected with a mandate to change the country's economic course because the policies introduced and followed by the previous Labour Administration had failed to bring about economic recovery. We must consider problems, and consider them fairly. We are trying to prevent an imbalance between the regions. We tried to do so in a previous period in office, as did the previous Labour Government. I give them full credit for trying. They failed. We shall try to succeed.

The problems of the region are mainly those of declining industry. It is not only mining that is affected, but shipbuilding, heavy engineering and, currently, the enormous problems faced particularly by Consett of a declining steel industry. The CBI report published today suggests that we need 2.5 million new jobs in Britain during the next 10 years. Everyone attending the debate knows that a substantial proportion of those new jobs is needed in the Northern region. I welcome the report, especially the passage that suggests that we need full co-operation between management and workers in every industry and at every level in every industry if we are to overcome our economic ills.

There is a brighter side to the Northern region. There are many good examples of co-operation between management and workers. The hon. Member for Newcastle upon Tyne, East (Mr. Thomas), who is in his place, knows that that appertains to North-East industries. I have respect for the present union and management approach within Vickers Elswick in Newcastle. The hon. Member for Newcastle-upon-Tyne, West (Mr. Brown), who is also in his place, is working with me in an attempt to help that firm. It is essential to get the size of industries right. It is no use any of us, in this debate or any other, imagining that the taxpayer in successful industry can continue to maintain unsuccessful industry in its present size.

As a Parliament and as a Government, we must have the courage to accept that nationally, in our main industries, we will have smaller work forces in heavy industry. The Opposition must accept that in the name of their responsibility. It is essential to get that right and to ensure that our industry becomes internationally competitive. It is no good continuing to bury our heads in the sand.

Redundancy is dreadful, and we all hate it. There is nothing that I dislike more than receiving a redundant worker, or body of workers—men in their forties and fifties—who see little hope of re-employment. The worst part of my job as a Member of Parliament is trying to give hope and comfort to such workers. We have plenty of them in the Northern region.

Big industry would be welcome in our region. There was enormous disappointment about Inmos. However, do not let us cry into our silicon chips. Do not let us forget that there will be considerable spin-off industry. Do not let us cry "Wolf" too often. Do not let us run down our region. It is ready to receive—and will receive thankfully—any spin-off industry from the main establishment.

It is tragic to learn that at Consett there are to be about 3,700 probable redundancies.

Mr. David Watkins (Consett)

Definite.

Sir W. Elliott

Definite, then.

The answer lies in small industry and its development. I welcome the fact that in the Consett area is a site of 80 acres owned by the English Industrial Estates Corporation on which two factories are already under construction. That trading estate is known as Consett No. 1. I hope that before very long it will be occupied as the Government's economic policy gets under way, as I am sure it will, and we get industrial expansion and overcome the awful legacy of the Labour Government. Then, perhaps, we can reduce the minimum lending rate, which I very much agree is troubling small and medium businesses.

I hope that the hon. Member for Thornaby realises that presidents of associations and individual business men are not writing only to Labour Members. They write to me every day asking why money costs so much and why they have to pay so dearly for their overdrafts. The answer is that inflation—it was rampant inflation that this Government inherited from their predecessors—must be kept under control and the only method is initially to control the money supply.

The only way in which MLR could have been lower in these last nine months is if the Government had cut public spending, which has reached excessive proportions, much more than they did; they were not prepared, for social reasons, to do so. When we get bank lending under control and interest rates down, we shall get the right measure of industrial expansion which is needed for the region.

It is said that small business is not the answer, that we want something big. Heaven help us if we had not had the trading estates in the North-East of England, if we had not had the Team Valley trading estate, the very first and the best of the lot, which was established in the 1930s by a Conservative Government and within which is the headquarters of the English Industrial Estates Corporation. Heaven help the Northern region if it had not had the small employers in the trading estates.

We want more such employers. I am encouraged, as I know the corporation is—its chairman and officers have told me so with great emphasis—that clause 9 of the Industry Bill, which is now before the House, will take the shackles off that corporation. It was ridiculous that such a corporation, with its extensive knowledge and considerable expertise, should, as an official told me, in the Labour Government's time, have been able to "indicate" to an incoming employer where the factories were but not persuade him which one to take. He said "We can give guidance about where the factories are but we cannot advise where the companies should go." The Industry Bill takes the shackles off the corporation.

There lies the main answer to the hon. Member's suggestion of a development agency. We have had far too many agencies, costing far too much, crossing wires one with another and duplicating one another's activities. I dread the thought of a development agency with an immense bureaucracy, its cost and the way in which it will hamper the EIEC, which is the body that can do most for our region.

Dr. Keith Hampson (Ripon)

Does my hon. Friend agree that the origin of the development agency was the inability of the Labour Government to ensure the loyalty of their North-East Members in the face of the devolution proposals for Scotland?

Sir W. Elliott

Yes, indeed. At the time of the Labour Government's proposals, there were two periods when we were threatened—I emphasise that word—with a Parliament just over the border in Scotland, which would have had civil servants, at goodness knows what cost, a press lobby and various arms and agencies. Of course, some Labour Members honourably objected to it—and thank goodness it did not come about. I agree that it was then that the development agency for the Northern region would have been essential. Now it is superfluous, just another layer of bureaucracy. The answer lies not in another advisory body or another batch of civil servants but in lower taxation, the encouragement of worker and manager alike to produce more in real terms.

Mr. Gordon A. T. Bagier (Sunderland, South)

Does the hon. Member's scathing description of the possible northern development agency represent his view of the present Welsh and Scottish agencies?

Sir W. Elliott

As I have said to the hon. Member in debate and privately, any form of devolution should have related to the country as a whole. Any development agencies should be evenly spread over this small island. If we had had a northern development agency for Northumberland, Durham and Cumberland in the last few years, does anyone imagine that Humberside would not have charged in to demand one? What about one for Merseyside? How many development agencies would we have ended up with? Development agencies for restricted areas—Scotland, Wales, Northern Ireland or the development areas—are not the answer.

I am encouraged to know that the EIEC has begun building what it calls "mini factories". There are 44 factories under construction at the moment—22 of 500 sq. ft. and 22 of 1,000 sq. ft. These units are expected to be completed by May. Even more encouraging, there is considerable demand for them by tenants. I know that these factories will not employ hundreds—they will employ scores, groups of 60, 30 or even 10—but this is the answer to our unemployment problem. It is not a quick answer but it is a real and distinct one. Employment in these factories will be real and not synthetic. All power to the EIEC and to our trading estates in the region. I hope that the Industry Bill will do a great deal to improve our employment position.

There is a great deal still to do with regard to training. For many years now I have advocated in debates in the House and elsewhere linking the education system, for the boys and girls who will not go beyond O-level, to some form of training for industry. Once, in the company of the right hon. Member for Sunderland, North (Mr. Willey), I took part in a broadcast in Sunderland, in a school hall filled with unemployed young people. The headmaster said, when I made this suggestion in the broadcast, that it was no part of the education system to train people in industrial skills and that the system's role was to teach young people to think.

I accepted that then and I accept it today, but it is desirable to do something rather than have so many young people suddenly ejected from the schools into the streets of the North-East without any skills at all. Every evening, the Newcastle evening newspaper has columns of advertisements for vacancies requiring skills which are just not there. We must do more about training.

We must continue to lower taxation and do something about capital taxation. The effect of capital taxation on small and medium employers is savage. It is ridiculous that because of capital taxation the would-be enterprising business man, the entrepreneur, is not given any encouragement to build up a business which he can pass on to his children. That must be altered. It is desirable that people be allowed to build up capital to pass on to their children.

I have spoken for longer than I intended. It was suggested at the beginning of my speech that I was filibustering. I was not, although I acknowledge that I have had to filibuster in the past. I welcome, as do the Conservative Government, a further debate on the problems of the Northern region. We should never see our problems in isolation. The only way in which the Northern region will have the prosperity for which we all long, and a reasonable level of employment for which we all long, is if the national economic policy of the Government is working. There is every hope that the Government will succeed with their economic policy. There is, therefore, every hope for the future of the Northern region.

Mr. Jack Dormand (Easington)

On a point of order, Mr. Deputy Speaker. At the beginning of the debate you understandably called upon hon. Members to make brief speeches. You also pointed out the heavy Labour representation in the Northern region. The hon. Gentleman made a speech which lasted for 27 minutes. May I ask you to repeat your call for short speeches?

Mr. Deputy Speaker

I do not need to repeat it, but I underline it.

4.22 pm

Mr. T. W. Urwin (Houghton-le-Spring)

In eight short months of Conservative Government, the whole nation has had good cause to regret the decision of last May, not least in regard to regional policy.

My hon. Friend the Member for Thornaby (Mr. Wrigglesworth) was right to introduce the subject of unemployment figures and vacancy figures of the various regions. It is a stark tragedy that the Northern region has been at the top of the unemployment league for so long. The figure for the Northern region is 8.5 per cent., while the figure for the South-East is 3.5 per cent. The difference is wider now than it might have been had Labour policies been continued, even over such a short period. There is only one vacancy for every 12 unemployed persons in the Northern region, as against three vacancies for every unemployed person in the South-East.

Regrettably, Inmos decided to site its first production unit in the South-West. The unemployment figure in the South-West is 5.6 per cent. and there is a vacancy ratio of 1 in 6. The figure is much lower in Bristol. That is a compelling case for greater preferential treatment for the Northern region, and for development areas as a whole, than the Government are so far specifying, despite the eloquent and vociferous South-East lobby.

Bearing in mind the Conservative Party's election manifesto and the promise to adopt a strong regional policy, we should reflect on developments so far. My hon. Friend the Member for Morpeth (Mr. Grant) and my hon. Friend the Member for Thornaby referred to the policy changes on the redesignation of special development areas and the crippling effect on industrial development in the Northern region because of the lifting of restrictions on industrial development certificates. The reduction of industrial incentives in the Northern region will be approximately one-third of the present level by 1981.

Inmos took an unforgivable decision. The Northern region worked prodigiously in order to secure the siting of the production unit in the North. The time is opportune now, not in six months' or two years' time, to announce the location of the next production unit and to redeem the promise made by the previous Labour Government that the units would be sited in development areas. We would have been less unhappy if the unit had been sited in Scotland, Wales or even Merseyside rather than Bristol. The Government must intervene in such important policy issues. They have an inescapable responsibility to the development areas.

I turn briefly to recent decisions that have been taken in the Department of Energy, not least the decision to site the first coal liquefaction plant in Wales rather than in the Northern coalfields. My hon. Friend the Member for Easing-ton (Mr. Dormand) and I made extensive efforts to try to persuade both the Labour Government, before the election, and the incoming Conservative Government to site those plants in the Durham coalfield, but without success. I ask the Minister to consult his right hon and hon. Friends and to ensure that the Northern region is not forgotten when further decisions are made on the siting of such plants.

I refer to the influence of the British Steel Corporation on regional policy, and I permit myself the luxury of a brief reference to the present strike. I suggest to the Government that the decision by BSC to offer a derisory 2 per cent. to the steel workers was provocative. By doing so, it deliberately precipitated the strike, which is having and will continue to have a grave and damaging effect on the economy, as well as on unemployment in the Northern region. I am sure that my hon. Friend the Member for Consett (Mr. Watkins) will enlarge on that.

Sir Charles Villiers appears to be comfortably wearing the mantle of a voluntary disciple of the Government's free enterprise system in his policy of import- ing coking coal. There is a case for Government intervention in that policy. Ultimately, thousands of jobs in the coal mining industry will be at risk, not least in my constituency, if the BSC is allowed to continue with that seriously damaging policy. It does so on the pretext that there is some justification for importing coking coal for quality reasons and for mixing with indigenous coal.

There can be little justification for extending those imports on the basis of the price argument. The National Coal Board has always bought and continues to buy its steel from the British Steel Corporation. I cannot see why the BSC does not buy British coal rather than importing it from abroad, especially as a fairly paltry sum of £20 million would be required as a subsidy towards the coal industry. The callous disregard of the Government in failing to intervene in this area will mean that eventually serious damage will be done to the coal industry as we know it at present. I suggest to the Minister that a subsidy even of this small proportion would be nothing in comparison with the figure of about £290 million by which the West German Government subsidise their coal industry.

The construction industry presents a very gloomy picture. There is very low activity. Hon. Members are in receipt of correspondence from all sections of the construction industry. We are quite properly reminded that the industry is always the first to be hit by economic recession and always the last to recover when the economy begins to improve. Thousands of building workers are on the dole. Priceless skills are being wasted and lost. Some of these workers will never return to the construction industry.

In the midst of all this, the Government's housing policy, among other things, appears to be based solely upon the sale of council houses. Intolerable problems will be created for local authorities if they are to be forced to sell council houses. The policy will not produce an extra brick. It will not produce an extra job for a bricklayer or for any other person wishing to practise his skills in the construction industry.

In the civil engineering section of the industry, with the Kielder reservoir and other projects rapidly reaching conclusion and the Tyneside metro in its final stages, there is little, if anything, of a substantial nature available to absorb vital resources which are at present lying unused in the industry.

I reinforce the call made at the Dispatch Box by my hon. Friend the Member for Thornaby for the establishment of a northern development agency. I take the point made by the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) about fragmentation. I say now what I said at least 15 months ago—that what the Northern region needs as much as and perhaps more than anything else is co-ordination. A northern development agency is surely as important to the Northern region—with the highest unemployment rate of the whole country, including all the development areas—as is an agency to Scotland or to Wales. It would at least provide the opportunity for co-ordinating resources in the Northern region in regard to procurement and the relocation of industry to the general advantage of the region.

The setting up of such an agency is the declared policy of the Labour Party. I have no doubt that had we won the election in May last year the agency would have been set up by now. The Conservative Party's pledge to pursue a strong regional policy has so far meant nothing. There is nothing that we can see at present or in terms of future developments to justify the use of the pledge in the Conservative manifesto last May. The Conservatives have said from time to time that they are better at playing this game than we are, but all the evidence is contrary to that. This is the time at which the Government should redeem that pledge. They should pursue a strong regional policy, especially as there is a quite distinct two-nation syndrome in this country.

The Northern region did not vote for a Conservative Government, and the Northern region will continue to reject the negative regional policies so far embarked upon by a Government who apparently do not recognise the real depth and seriousness of the problems with which we are confronted.

4.34 pm

Mr. David Watkins (Consett)

When the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott)addressed the House, he rightly pointed out that, as we all know, there are long-standing problems in the Northern region. When the hon. Gentleman went on to contrast the performances of Labour and Tory Governments, it was almost as if his right hon. Friend the Chief Secretary to the Treasury just before Christmas, in presenting the public expenditure Estimates, had not announced that the Government were organising for increased unemployment.

By the very nature of the Northern region's long-standing problems, it is bound to be more seriously hit than any other region in the country. At the last general election, Labour candidates throughout the Northern region pointed out that the election of a party that was standing on the manifesto that the Tory Party was then putting before the country would result in the turning of the Northern region into an industrial wasteland. In the eight months which have passed since then, every word that we said has already proved to be absolutely right.

Every hon. Member who has spoken in the debate so far has referred to my constituency. In that election, I especially pointed out that the election of a Tory Government would mean the closing down of the Consett steelworks. Exactly as I forecast, the works is to be closed, with devastating consequences for the very fabric of life in an entire community. I propose to devote the remainder of my short speech to indicating that that is an indefensible action.

Mr. Robert C. Brown

I take the serious point that my hon. Friend is making. With regard to the closure of the Consett steelworks and other major closures in the Northern region, is he aware that there are no fewer than eight Conservative Members representing seats in the Northern region and yet only the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) is present?

Mr. Watkins

My hon. Friend is right in drawing attention to the attendance in the Chamber.

I should like to resume the point that I was making about Consett. It is a town that is totally dependent on one industry, and 3,700 steel workers will be put out of work. But, in addition to the 3,700, several thousand other people will be put out of work in industries and occupations totally dependent on the steel industry in the town.

The Secretary of State for Industry was in the North-East on Saturday, and he made a point of saying that Consett is in a special development area and, therefore, it can attract grants. But the fact is that Consett has been in a special development area ever since an earlier Labour Government invented the concept of special development areas. In my constituency, even before the fatal steel industry closure, 15,000 coal mining jobs had disappeared because of the running down of the mining industry. That was why it was made a special development area. Yet, even with the maximum available inducements for the establishment of new industries, only about one new job has been created for every five that have been lost. I put the point positively that there must be far greater Government support in improved communications and in the provision of sites and factory buildings. It is ludicrous that at present there are just two small factories under construction in an area that is facing such industrial devastation. If the whole area is not to become derelict, much more assistance must be given in order to help the area to help itself. The resources locally are totally inadequate to deal with a problem of such magnitude without outside support.

There is another aspect of the matter that needs to be stressed. The thousands of people who are to be deprived of their livelihoods are all taxpayers. By destroying their livelihood, the Government are depriving the country of tax revenue. By closing the steel plant, they are depriving the county and district councils of millions of pounds of rate revenue. The consequence must be either huge increases in rates or huge cuts in essential public services. All this is being done in the name of a Government who are hypocritically purporting to be protecting taxpayers and ratepayers. It is even worse than it sounds, because the consequences are that, in place of all this loss of public revenue, there will be an increase in public expenditure on a vast scale in redundancy payments, unemployment pay and social security payments in general.

As I have said, there is no justification for any of this, because what is being shut down is not an old, unproductive plant which is running at a loss but, on the contrary, a highly modern plant where tens of millions of pounds have been spent on modernisation, and where 2,500 jobs have already been done away with, with the full co-operation of the trade unions and the work force.

The result of all that exercise—which, of itself, has been a traumatic experience in an area which is so heavily dependent upon one industry—is a pattern of high productivity and rising profitability. Productivity expressed as metric tonnes per man year is at least 100 tonnes above the British average and it is as good as any and better than most anywhere in the whole of Europe. Following the conclusion of the exercise of demanning and modernisation, in the last four months of 1979 the profits made at the works were running at a rate of a rising £2 million a year.

The steel workers of Consett were given specific promises. They were told "Increase productivity, reduce the labour force, and the future will be assured." They responded magnificently to that call. The result is that they have been rewarded with betrayal. It is not only the betrayal of steel workers. It is the betrayal of an entire community.

How dare the right hon. Gentleman the Secretary of State for Industry stand at the Dispatch Box, as he did last Thursday, and accuse my constituents of trying to get something for nothing? How dare he say that increased productivity is intensely in the interests of the workers when, where they have so co-operated, this is the response they have received? How dare he come to the North-East, as he did on Saturday, and say "Let the people of Consett decide their own future, the Government will help" when, having already sacrificed so much to help themselves, they have been rewarded with betrayal on a scale that amounts to sheer depravity?

Time is pressing, and I shall conclude my remarks. As my hon. Friend the Member for Thonaby (Mr. Wrigglesworth) said, there is in Consett a very severe situation, but it is only a reflection of what is happening in the Northern region as a whole as a result of the Government's unworkable monetarist theories.

The Government are a disaster for Consett. They are a disaster for the Northern region. They are a disaster and, indeed, a growing danger to the whole country.

Mr. Deputy Speaker (Mr. Richard Crawshaw)

I call the hon. Member for Nelson and Colne (Mr. Lee).

Mr. John Lee (Nelson and Colne)

rose—

Mr. Dormand

On a point of order, Mr. Deputy Speaker. At the beginning of the debate, the occupant of the Chair asked hon. Members to be very brief in their speeches. My hon. Friends have been brief. This debate concerns the problems of the Northern region. The constituency of the hon. Member you have just called to speak is not even in the region. Would it not be a scandal if that hon. Member were to take precious time in a half-day debate to contribute to the debate?

Mr. Deputy Speaker

As the hon. Member knows, the Chair tries to maintain an even balance, and I think that my predecessor in the Chair called two hon. Members from the Opposition Benches. I think that he was trying to keep the balance. It is not unfair to call an hon. Member from the Government Benches, even if he does not happen to represent part of the area.

Mr. Robert C. Brown

Further to that point of order, Mr. Deputy Speaker. I am sorry to pursue this matter, but I made a point in an intervention, when my hon. Friend the Member for Consett (Mr. Watkins) was speaking, in which I said that there were eight Conservative Members representing seats in the Northern region. I wish to put the record straight. There are, in fact, nine Conservative Members who represent such seats. Three of them are Ministers, and not one of those Ministers has had the decency to attend to listen to at least the opening speeches. I think that it is quite monstrous that the Chair should select speakers from regions other than the Northern region.

Mr. Tristan Garel-Jones (Watford)

Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

The point of order will be noted. We are wasting the time of hon. Members who wish to speak.

Mr. A. J. Beith (Berwick-upon-Tweed)

Further to that point of order, Mr. Deputy Speaker. I do not think that you were in the Chair when the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) observed that in the past he had had to filibuster on occasions such as this because it was not possible to keep a balance with so few Conservative Members in the region. He said that he had no need to do so today because others were available on the Government Benches. I hope that that point has been brought to your notice, Mr. Deputy Speaker.

Mr. Donald Thompson (Sowerby)

Further to that point of order, Mr. Deputy Speaker. The Opposition spokesman broadened the debate to include the Lake District and the Pennines. We read the Order Paper very carefully. It does not say "the Northern economic planning area". It refers to the Northern area—which is anywhere north of Watford.

Mr. Deputy Speaker

The Chair will bear in mind what has been said and will exercise its discretion to make sure that those who should be involved in this debate are called to speak.

4.45 pm

Mr. John Lee (Nelson and Colne)

I appreciate that in a debate on the Northern region the majority of speeches will naturally be oriented towards the North-East. Nevertheless, I have always accepted that Lancashire is part of the Northern region. Indeed, by the definition of the right hon. Member for Houghton-le-Spring (Mr. Urwin), who spoke of there being two halves to the country, the North and the South. I and my constituency fall within that northern half. Therefore, I welcome the opportunity of making a few remarks in the debate.

Labour Members are totally obsessed by grants, development agencies and Government subsidies. What they fail to realise is that the majority of businesses are essentially created by the drive, initiative and effort of one man, or possibly two men. It may well be that as a particular business develops it is sold out to a larger group and perhaps becomes a branch or subsidiary of that group. It may well be that its local connection tends to wither somewhat. Nevertheless, businesses that are created in particular regions retain a connection with those regions.

I am glad that the present Government's policy is directed towards helping the areas and the regions in the most need. I am conscious that my constituency has lost its intermediate are status. I emphasise that, although we have lost that status, we want to see two things. First, we want to see the continuance of derelict site grants when our regional aid is phased out in 1982. Secondly—and this is most important for all of the Northern region—we want to see good communications. I mention specifically the M65 motorway, which is crucial to the development of north-east Lancashire.

My hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliott) and one or two other hon. Members have talked about small businesses. One of the encouraging features of the economy at present is the rate at which small factory units are being taken up. I am pleased that the present Government are encouraging the smaller business. I remind the House again of a survey which was carried out in America fairly recently, covering a recent decade. That found that about two-thirds of the new jobs which had been created were created by firms employing fewer than 20 people.

Steel, shipbuilding and coal have been mentioned. I want to talk about a predominantly regional industry—the textile industry. In the textile industry—this also has some application to the North-East—we are getting a textile mill closure virtually every other day. Only a fortnight ago we had a major Courtaulds closure—the Stanroyd mill in Colne, in my constituency. I draw the attention of the House to a letter which I received within the last few days from one of the ablest younger textile men in the industry. He writes that the textile industry is currently going through the worst crisis that I can ever remember. Not only is domestic consumption at an all time low, but also imports are coming in on an ever increasing scale. I fear that 1980 will show a list of casualties in our industry from which we may not recover.…Altogether the picture is very distressing. It is a tragedy that an industry like the textile industry, which has such good labour relations, which has improved productivity and has substantially reinvested and re-equipped, is not getting the support that it deserves.

We have a massive and over-inflated public sector, and we on the Government Benches are concerned to decrease it. While it is so substantial, we need a positive policy to buy British in the interests of the nation as a whole, and particularly the Northern region, which would give manufacturers, particularly of textiles, the benefit of long runs of a product line.

Rising unemployment in the regions, particularly where there is a significant minority community, provides fertile ground for extremism, whether of the Left or the Right. In Nelson and Colne within the past week we have for the first time been subjected to a considerable leafletting campaign by the National Front, which is a most unpleasant start to the 1980s.

4.50 pm

Mr. Ernest Armstrong (Durham, North-West)

The debate on the problems of the Northern region has been continuing over the past half century. One of my predecessors, the late Joe Batey, in the latter part of the 1920s, talked about unemployment in West Durham and the problems of the mining industry. Between 1919 and 1939, 1½ million people left Scotland, Wales and the Northern region—and I mean the Northern region that we are debating today—for the more affluent parts of the country, the South and the Midlands.

During my lifetime, unemployment in our area has always been more than twice the national average. For example, in 1935the male unemployment rate in West Durham stood at 51 per cent., while in London it was 4 per cent., so the gap between the North and South has always existed.

I shall not make the speech that I prepared and go into details of incentives, but I wish to make a political speech, which is unusual for me. I tell the Minister and the Government that the situation in the Northern region is unacceptable.

During the war, the coalition Government considered the kind of society that we wanted after the war, and they came to the firm conclusion that it was economically sensible and socially just to iron out the gap between the regions. After the war, as a nation—and not just one political party—we were determined to have a vigorous regional policy which would stop the population drift and give those who were growing up in every region equal access to the necessities of life and those things that contribute to its quality. We determined that we would no longer tolerate the breaking up of communities and the destruction of family life that unemployment brought to the Northern region in the 1920s and 1930s. In the old days decent men and women were treated as semi-criminals because they were unemployed and poor, and we hoped to end all that.

Since the war, successive Governments, with varying degrees of success and of enthusiasm, at least followed that policy—and the visit of Lord Hailsham, which has been referred to, is an indication that it was a policy followed by all Governments. I am concerned about the growing feeling in the Northern region that the Government have turned their backs on that policy and on the people in the Northern region.

Economic reality is important, but in the Northern region we are sick and tired of being lectured from the Conservative Front Bench about economic reality. We have lived with economic reality throughout our lives and know that we cannot have an economically successful nation if social justice is ignored. As my hon. Friend the Member for Consett (Mr. Watkins) said, the obsession with a monetary policy and market forces has led the Government to forget social justice. A regional policy is not a short-term expedient. It has to be a continuing and integral part of Government policy. We know from experience that it is necessary to run hard in order to stand still where job creation is concerned.

I put it to the Minister in this way. On Saturday I addressed some men in their middle fifties, who had left school at 14 and gone straight to the pits. In those days there was no security and plenty of unemployment, and some of them have worked in four different pits. They have been made redundant and had to move. There was no unrest. They moved. They then went to the textile industry and have been made redundant yet again. Those men cannot be accused of being militant, and there have been no bad industrial relations or complaints of low productivity They are decent, hard-working, law-abiding men, who are anxious to contribute to the national good as well as provide for their families. What does the Minister think their reaction is when they hear the Prime Minister talking of the work-shy syndrome? How does he think that such men react to the Secretary of State for Industry, who talks blandly about "the British disease" and people in my constituency who "want something for nothing"?

We are not here with the begging bowl; far from it. The Northern region has a great deal to contribute to the well-being of the nation. We have a good work force. We have the ability to make a contribution, and all that we ask is the opportunity to make it.

As a sad commentary on society in 1980, on Saturday a man who has spent his life in local government said to me "People like me are law-abiding and believe in law and order and democracy, but we have come to the conclusion that the only language this Government understand is that of violence. They only listen to stones thrown through a window or the people who go out on the streets."

That is a sad commentary. I assure the Minister that the people of the Northern region are law abiding, but there is growing cynicism that is leading to bitterness and anger. We believe that the policy followed by successive Governments is being sabotaged by this Government. I warn the Minister and the Government that our people will not tolerate a return to the situation that we accepted in the 1920s and 1930s, when communities were destroyed and families broken up.

I want to hear from the Minister that the Government have a positive commitment to a vigorous regional policy. The economic well-being of the nation that we all seek can be achieved only if all sides of industry are given the opportunity, and the Government's actions, for example, over Inmos, are convincing our people that the Government do not have the necessary commitment. However, if we are given the opportunity to work out our own prosperity and preserve the way of life in which we believe, we shall respond.

4.59 pm

Mr. A. J. Beith (Berwick-upon-Tweed)

I congratulate the hon. Member for Thornaby (Mr. Wrigglesworth) on his forceful speech with which, I think, there was widespread agreement. There was scarcely anything in his remarks with which I disagreed and I am grateful to him for referring to some of the problems that we face in the Alnwick and Amble district. Indeed, I disagreed with the hon. Gentleman only when he spoke about a North-East development agency. It would have been better if such a project had been undertaken by the previous Labour Government when we had many Northern Labour Members who could have put their weight behind it. We did not get it from that Government and it comes ill to have so much emphasis placed on it now.

I represent the northernmost part of the Northern region and it lies north of a great deal of Scotland. We face all the problems that we feel get closer attention from Governments when they occur on the other side of the border. We have experienced a massive cutback in regional aid, with the withdrawal of all development area assistance from the Berwick area and all but the most nominal aid, ultimately, from the Alnwick and Amble area, which has an unemployment rate of well over 8 per cent. That has not been merely a paper transaction.

We have seen the effects of the Government turning their backs on our area. The practical effects have been demonstrated in our attempts to secure the siting of a major project in the Alnwick area. An international company wanted to site its pharmaceutical research headquarters in Alnwick, and we hope that the project will still come to us, but the fight has become much more difficult since regional grants were withdrawn. That company's major investment programme was based on regional aid that it expected to receive. It had alternative opportunities to site that project in other European countries and was offered substantial inducements to do so. We hope that we shall get the project in Alnwick and that we shall get more Government co-operation and specific assistance for it. The episode is a practical illustration that the withdrawal of development aids will make it much harder to get industry into our region.

It might not be so bad for us if the system of regional aid had been completely abandoned. Other areas would have had reason to complain, but we in the north of Northumberland can see that development aids are still available for areas that are more prosperous and are provided with more jobs than is our area. Even within our own county, we see that areas, such as Cramlington, which have already had substantial investment, and prosperous suburban areas such as Ponteland and Darras Hall, on the outskirts of Newcastle, have substantial development aid that is not available to our area, which has severe unemployment and special problems.

When we look over the border, we see the strongly financed and strongly supported Scottish Development Agency which has considerable powers to attract the very industries that we may be trying to secure for our area.

We have considerable reason to be grateful for the industrial development programmes of the Development Commission and its daughter organisation the Council for Small Industries in Rural Areas. They have been of enormous help to us in the rural parts of the Northern region and we want that help to continue.

It is remarkable that there should still be an element of suspicion about whether the Government regard those bodies as quangos which should be axed or as bodies doing a worthwhile job which should be maintained. It is time that we had a firm announcement that they are to continue their work, which they do economically and which is particularly helpful to small business and industry. We want to be assured that finance for that work will continue to be available.

The abandonment of development aid for areas that badly need it might be easier to understand if the Government had succeeded in creating the different industrial climate upon which they base their case for making a change. The nub of the Government's case is that by removing development aid, by other fiscal measures and by their general handling of the economy they will create a climate in which business, large and small, will prosper.

I would be hard put to find any business man in the Northern region who believed that we were anywhere near that position. The existence of 20 per cent. interest rates is a clear demonstration that we are a long way from that position, even if the Government have it in their power to create it.

The Government cannot escape the blame for 20 per cent. interest rates. They are, in large part, the product of a high inflation rate, but the Government are not prepared to tackle inflation by means of an incomes policy. The faults of the previous Administration may have been numerous, but one thing on which we were prepared to support it was on incomes policy through which it was able drastically to reduce the level of inflation and to hold down interest rates. The abandonment of that policy will make life difficult for small businesses and will make it impossible to create a climate in which business can prosper in the absence of the aids that the region has previously received.

The effects of many other Government policies make it difficult for industry to prosper in a region such as ours. The Northern region has substantial urban areas, but also massive rural areas. The region stretches from Berwick on the North-East coast of England to Westmorland and the southern shores beyond the Lake District. In that huge area there are massive problems of rural depopulation and unemployment. Many policies will bear hard upon those problems.

For example, the Government's plans to charge for transport for children who live a long way from school will have a major impact on firms trying to attract or keep labour in rural areas. Think of the impact of that policy on agriculture, for example, Mr. Deputy Speaker. The more that agriculture reduces its labour force, the more serious will be our unemployment problems in rural areas. Who will be able to afford to stay on industrial and agricultural wages in rural areas if they have to pay substantial sums to get their children to school?

If the Government decide to leave no discretion to rural local authorities over the sale of council houses and make no provision to keep a number of council houses in our villages, what will happen to the employees of small businesses in rural areas? The only houses that will be available will be those that are snapped up at high prices for second homes and retirement homes by people with far more money than those employees.

All those problems affect the infrastructure upon which industry and new businesses in rural areas depend. If the Government do not look at their policies in the light of their impact on attempts to foster industry and business in our rural areas, their efforts, few as they are, will be in vain.

Hon. Members have referred to the need for training and re-training in skills for industries in the region, yet we find that the Government propose to close the very institutions that have been created to do that work. Skillcentres in Darlington and Mary port are scheduled for closure and an announcement is expected later this month on that subject. Surely we should be trying to maintain and expand those facilities and to make them available to those who are beyond the travelling distance to some of the existing re-training facilities.

All these infrastructure issues are crucial to us. Basic problems are involved. For example, we have had difficulties in my constituency because of under-investment in the telephone network in some of the more outlying areas where industrial estates have been built. In Berwick delays in telephone connections have been considerable. Firms have also been unable to obtain Telex connections. Such facilities are needed if one is trying to build up industrial estates that include many small firms trading in an international market. The Government cannot ignore the importance of such problems that they may regard as trifling.

We need specific aids to bring business into areas with substantial unemployment, and those aids should not have been abandoned by the Government. We need a more coherent approach to small business which has had shattered expectations. Many small business men were taken in by the impression given by the Conservatives in opposition that there would be a tremendous change in the climate for small businesses. That has not happened. We need a realisation that every aspect of Government policy can have an impact on our problems.

People in the Northern region notice that Governments are keen to offload their problems on to regions such as ours, but less keen to provide benefits. When it comes to finding somewhere to dump nuclear waste or to locate installations that no one else wants, the North-East is thought a suitable place, but when it comes to providing aid, a different approach is displayed.

People in the region are prepared to work if they can see the prospect of a reasonable result. That willingness needs some backing. In terms of industrial prosperity, the social problems that would exist if the North-East were, in effect, closed down would be massive. The effect of trying to absorb in our cities in the South and the Midlands populations who would do a very much better job if they were given the opportunity in their own region would be appalling. I see no reason why we should go on creating problems of that kind.

5.10 pm

Mr. Robert Banks (Harrogate)

Any opportunity for a debate on the Northern region is welcome, and so it is today.

I suppose that it was inevitable that the approach of the Opposition should be characterised by their choice of subject— The problems of the Northern region. I would rather have chosen "The skills and available opportunities for new industries in the Northern region".

We have had five years of Labour Government. Looking back over that five years, we see that we are where we were when we set out originally.

The hon. Member for Thornaby (Mr. Wrigglesworth) gave us a catalogue of requests for aid and Government intervention. I found that list depressing, because we have been along that road once before. We found ourselves with a depressing list of problems, and they have been aired in this debate. We have to turn our minds to the task of talking not in the past or even of today but about how we meet the future in the Northern region.

We tend to dwell all too readily on the problems rather than on the positive elements for success. Success means employment. Employment and success mean wealth creation, and more employment and higher standards of living. The debate surely must be about that equation and how we bring about the beginnings of success.

Inevitably, in these debates we tend to draw on our experiences in our constituencies. People say to me very quickly "It is all right for you. Harrogate has only a 3.5 per cent. unemployment figure, whereas the figure for the whole of the Northern region is 8.5 per cent." There the conversation tends to stop, except that the other person will go on to talk about his unemployment, his industrial decline, the past glories of great enterprises, and what a dismal future he can paint for the area that he represents.

I think that he should look at the success of Harrogate and realise that there is a lesson to be learnt, a lesson that is illustrated by the success of the town and the industries in it. People come to Harrogate who have made businesses, who have worked in successful businesses and who are proud of their success. We have a number of industries in Harrogate which range from steel fabrication, clothing, chemicals, food preparation and laboratories, to the construction industry. We have some of the big firms, such as Dunlopillo and ICI Fibres Research, and the Central Electricity Generating Board and the Ministry of Defence.

The lesson here is that we have a diverse range of industries, covering all sectors. I suggest that they are all successful companies in their respective areas of business.

Harrogate itself has built a reputation as a conference centre. This has been done by the minds of people of distinction who decided that the town—

Mr. Radice

On a point of order, Mr. Deputy Speaker. Is it relevant to a debate on the Northern region to have a tour of Harrogate, which is not in the Northern region at all?

Mr. Deputy Speaker

I understand that the Harrogate area is connected with one of the industrial organisations, and I am certain that it is quite relevant to refer to it in this debate. Most of us in Lancashire think that anywhere east of the Pennines is North or North-East.

Mr. Banks

The conference centre being built in Harrogate today is not being built with Government or EEC aid; it is being built purely and simply with money provided by Harrogate. Many people say that Harrogate's success has been achieved in spite of Government aid to other areas.

The lesson is that we have to attract new and young companies. When a large company goes out of business, many people are thrown into unemployment, and it takes a very long time for new companies to arrive at a position where they can employ the number of people who have been made unemployed. To do this requires a progressive attitude by local authorities so that they make quick decisions to capture the enthusiasm of people who wish to start up new enterprises. That means that they must be able to give quick planning decisions so that those enterprises can be made to get off the ground.

Local authorities also have to create a good environment. That is a matter of course, anyway, especially in our Northern cities. But what is important is EEC aid and how it is applied. It is important that some of that aid is channelled towards creating a better working environment and a smarter area for people to live in. I should like to see that applied to our Northern cities.

A town or a city survives on its reputation, and that reputation depends on the human element. That human element is a willingness to work not just for the wages but for the satisfaction of building a new company or keeping up the standards of a long-established firm.

This is a true element of success. It depends not only on the boss but on the unions involved. The boss can frustrate the work force by unreasonable demands and stinginess over pay. The unions can frustrate management over manning levels for new machines and procrastination over overtime for important orders, and so on. These are the makings of decline and the road towards less competitiveness, stagnation, disillusionment and probably eventual closure when taken to its limit.

If this debate has any influence at all, let it influence management to inform and to knit their people together. Let it influence unions to move to modern technology, to move with change and to co-operate in achieving more productivity so that, with success, there is profit and high wages.

I recall that in Sweden recently, where there is a wages policy, the Government announced a wage increase of 10 per cent. for the coming year. The unions did their sums. They went to the Government and said that on their calculations the best that the Government could afford was 8 per cent., bearing in mind inflation and the need to keep the real value of wages. That is a lesson that I have yet to find in this country. We have yet to see unions going to managements and saying "The company made a loss last year. Therefore we, together with management, must keep wages to a reasonable level."

I happen not to believe in pay policies. I think that they lead to lowered expectations and the lowered recognition of skills and that they sap initiative and the will for expansion. In my view, that is one of the reasons for the position in which we find our economy today.

A number of references have been made to Government aid. I should prefer to see Government aid to the regions removed altogether, and instead a concentration on incentives to people to build new companies and lower personal taxes. We also have to seek to remove bureaucracy and some of the oppressive legislation that is bearing down on some of the smaller companies and frustrating peoples' willingness to use their time to get their firms under way.

Mr. D. N. Campbell-Savours (Workington)

Has the hon. Gentleman stopped to consider the number of companies exhibiting in the Harrogate trade fairs throughout the year which rely on Government grants and Government intervention not only in some cases to keep them going but in many cases for their starting-up operations? Does he wish to ignore that factor completely in a debate which is precious to hon. Members who represent constituencies in the Northern region and who desire to speak about matters of importance and not nonsense of this kind?

Mr. Banks

Indeed, I do. I should like to see us move to a time when we have no aid to any of the regions. I am not isolating the Northern region; I am talking about all the regions. This aid to all the different regions merely warps the issue. If there were no aid, people would decide where the skills were and where the chances of employing the right people for their industries lay and the sort of environment that they could offer their workers. That is the simple message, and I do not see the relevance of the number of people who come to Harrogate to exhibit their goods.

Mr. Campbell-Savours

Without them, a lot of the hon. Gentleman's constituents would be unemployed.

Mr. Banks

But I think that there is a case for Government assistance in the form of research grants. It was interesting for me to visit a factory in Japan that had promoted the use of robots, now beginning to be used in industry. The firm started with a Government grant, which had continued for about nine years. As a result, it was a success and became one of the leading firms in Japan. It is not easy for small and medium-sized firms to raise money for detailed technological research. Large firms find the money out of their own pockets. There is a case, when economic circumstances permit, for the Government encouraging medium-sized firms to invest in research.

In the past we have relied on major industries in the North for our defence. We shall no doubt have to do so again. We depend on the shipbuilding industry. The defence cuts over the last five years have had a major impact on the shipbuilding industries in the North-East. I deplore this. It is essential that we maintain a strong and effective Navy. That is required as a matter of urgency now. I believe that the time will come when we shall have to go back to the shipbuilders and ask them to build ships in record time. Given that confrontation, I believe that the industry will respond as in the past. But the war that has to be fought now is for economic survival.

I believe that the North has the skill and the ability to respond, but the region needs the incentive and the backing of the Government, in the sense that they back people with initiative and those who come to terms with the situation. In this way, we shall succeed.

5.22 pm

Mr. Don Dixon (Jarrow)

I congratulate my hon. Friend the Member for Thornaby (Mr. Wrigglesworth), who made such a good speech in opening the debate.

I come from, and represent, a constituency that still bears the scars and memories of the 1930s. What I see today is similar to what was seen in the 1930s, when many regions, such as the North, were turned into industrial deserts by the policies of the Government of the time. In 1931 the steelworks at Jarrow closed, throwing 3,000 men out of work. Now we have the closure of the steelworks at Consett. In 1935 the shipyards in Jarrow closed, throwing 5,000 men on the scrap-heap. Today many shipbuilding communities face the same threat.

In the 1930s there was the same obsession about public expenditure cuts. Unemployment benefit was reduced from 17s to 15s. Today we have the clamour for taxes on short-term benefits and the stopping of indexation. In 1936 members of a deputation from my home town of Jarrow who went to see the then President of the Board of Trade, Walter Runciman, were told to go back and work out their own salvation. On Saturday evening the Secretary of State for Industry told a meeting in Newcastle "It's up to you". The philosophy of the 1930s is found in the present Government.

We have had 40 years of regional policy in various forms. Over the years we have had a mixture of stick and carrot, the stick in terms of IDCs and the carrot in the form of regional grants. Under various Governments the sticks have got either bigger or smaller and the carrots have varied in length. The present Government have reduced the size of the stick by taking the restriction off IDCs for factories of up to 50,000 sq. ft., and they have shortened the length of the carrot by taking £230 million out of regional development. If the intention of regional policy was to achieve economic parity, it has been a dismal failure, certainly in the North. In fairness to the Government, it must be said that unemployment has not arisen since May last year. It has existed for many years in the Northern region.

The policy of the Government has not helped the situation. My hon. Friend the Member for South Shields (Dr. Clark) and I represent constituencies covering the area of the South Tyneside district council, the biggest single employer in the area. Seventy per cent. of local government expenditure is accounted for by wages and salaries. Any proposed cut in public expenditure will hit such areas, which already have a high unemployment percentage.

The raising of minimum lending rate will hit businesses, certainly small businesses, in the North. The terminal grant for shipbuilders, to be withdrawn in 15 months' time, will again hit constituencies such as mine that rely to a great extent on shipbuilding, ship repairing and marine engineering. The end of exchange controls and the dismantling of controls over international industry, in so far as they ever existed, will accelerate branch factory closures from which the North has suffered for a long time. There is an old saying that if there is an economic chill we in the North catch double pneumonia. That is true.

The male unemployment rate in my constituency is 16 per cent. and rising I do not like quoting percentages too often. I have been one of that percentage. If one is in the dole queue and 100 per cent. unemployed, it is no comfort to be tapped on the shoulder and told that one is one of 14 per cent. unemployed this week compared with one of 15 per cent. the previous week. If one is unemployed, one is 100 per cent. unemployed.

Between May and November last year, over a thousand redundancies in my constituency were notified to the Department of Employment. A major blow, to which my hon. Friends have referred, is that the Inmos production unit will be going to a non-assisted area despite the promise of the previous Government.

I consider the worst aspect of industrial recession to be youth unemployment. This is destroying the seed corn of our future. Society is denying young people a job before they have had an opportunity to prove their worth. The previous Government achieved much in preparing the unemployed young people for work in various schemes under the Manpower Services Commission. By guaranteeing that young people would have a job, a training place or a place in further education, they did much to help young people. It is unbelievable that the present Government intend to cut back this type of expenditure.

In the South Tyneside district, 858 youngsters between 16 and 18 are unemployed. Of those, 408 have been in employment and 450 are school leavers who have never had a job. There are 885 youngsters taking part in the job opportunities programme. The district possesses the smallest percentage of 16-year-olds staying at school and the smallest percentage of16-year-olds taking full-time courses in further education. In areas of low wages and high unemployment, youngsters have to leave school in order to sign on the dole and get supplementary benefit. It is no good people complaining about vandalism and anti-social behaviour of the young when this is en- couraged by increasing youth unemployment and denying young people jobs and education.

I should like the Government to introduce mandatory grants for 16-year-olds staying on at school or college, as promised by the last Government. They should increase, not decrease, the youth opportunities programme. They should increase, not decrease, the STEP programme and make more, not less, money available for manpower services in special development areas.

As there is limited time for this debate, I shall close with the advice that I gave to the Government in my maiden speech. The youth of the day are not so steeped in democracy that they will accept the solutions of the 1930s to the problems of the 1980s.

5.29 pm

Mr. Robert C. Brown (Newcastle upon Tyne, West)

I want to concentrate my opening remarks on my constituency, which, as a result of closure after closure in the past 12 months or so, has become almost a disaster area. We had the closure of the Tress engineering works, with the loss of 330 jobs, and then, last September, the closure of the Vickers Scots-wood plant, with the loss of 750 jobs.

Major closures such as those arouse major interest, but alongside them we had the closure of the little Pye factory, the back-street bakery employing 12, 15 or 17 people. In areas such as ours, the multiplication of the dozen jobs lost here and the 15 or 25 there amounts to more human misery, and we already have plenty of it.

In addition, we have problems with other major plants, such as Vickers at Elswick. The problem there is caused by the Government's indecision over the order for 77 Chieftain tanks, war maintenance reserve tanks for the British Army of the Rhine. It has nothing to do with Iran, so I do not want the Minister to give that excuse. Because of the indecision of Ministers in the Ministry of Defence and elsewhere, there has been no confirmation of the order, and now Vickers defence division at Elswick, with 1,600 men, is seriously threatened. It would be a mortal blow to heavy engineering on Tyneside if, following the closure of Tress and Vickers Scotwood, Vickers at Elswick should go. It would be a disaster for the area, one that we cannot contemplate.

Let us look at the social consequences of the closures. A year after the closure of the Tress factory, 100 of the men concerned were still unemployed. When a man has been unemployed for 12 months or more, he must suffer a serious loss of morale and may well need the services of a rehabilitation centre. But, at the diktat of this despicable Government—I use the word "despicable" advisedly in relation to regional policy—the Manpower Services Commission is cutting out 33 per cent. of the places in rehabilitation centres which give people the confidence, after long periods of unemployment, to face new jobs that we hope will be waiting round the corner for them.

Part of the immorality of the closure of skillcentres and rehabilitation centres is in the fact that the instructors in them are highly skilled tradesmen, who in the main are very dedicated. I think of one of my own constituents who is very dedicated and motivated by the desire to do something for his underprivileged brethren. He left a highly paid job in skilled engineering to go to a rehabilitation centre as an instructor. There is no question of his looking for a soft number. He went there because he was properly motivated. We shall lose the skills of such well-motivated people, who can do that job for people who have had the misfortune to be unemployed for long periods.

Small businesses have been mentioned. My hon. Friend the Member for Thornaby (Mr. Wrigglesworth) made an admirable contribution. I understand that the Under-Secretary of State for Industry, who is to reply to the debate, is responsible for small businesses. The Government gained power on a prospectus of doing a great deal for the small person and the small business. With interest rates at 17 per cent., we must ask what will happen to the small business. I have referred to the loss of 17 jobs in one place and 15 in another. I have ample evidence of this sort of thing in my constituency. It has happened in recent weeks because small businesses cannot face paying 21 per cent., 22 per cent. and 23 per cent. for the money they need in order to keep going.

Only last week I wrote to the Chief Secretary to the Treasury about one small firm in my constituency employing 18 people. That firm is in the insulation business, which is badly needed these days. Because of the tightness of money, it is a month behind with its tax payments. I have seen its tax returns and know that it has been paying steadily month by month, though because it is a month in arrears the Inland Revenue has withdrawn its tax exemption certificate. I hope that the Chief Secretary will get his finger out on this matter, otherwise 18 more people will be made redundant. It would be a complete injustice if that happened simply because the firm was a month in arrears.

Mr. Ted Leadbitter (Hartlepool)

That is not an isolated case. There are many such cases, and there is also evidence of increases in bankruptcies. That is the Government's policy on small businesses.

Mr. Brown

I fully accept what my hon. Friend says.

I turn briefly to the construction industry. In the Northern region the major schemes, such as the Tyneside metro scheme, the Tyneside sewerage scheme, the Keilder water scheme and the British Steel Corporation plant at Redcar, are all drawing to a conclusion. We must have major schemes to take over from them. Without such schemes, there will be further massive redundancies in the construction industry.

Instead of cutting £200 million off the roads programme, why do not the Government bring forward the Newcastle city western bypass, the Newcastle city inner ring road, the Redheugh bridge scheme and bypasses along the line of the A69 across to Cumbria from Newcastle, where many of the villages suffer misery caused by heavy traffic thundering through day and night?

In an area such as the Northern region, which has for many years suffered more than its fair share of environmental deprivation, it is reasonable to say that we should have a higher rather than a lower level of investment, but the reverse is happening in construction. Between 1970 and 1978, we in the Northern region suffered a decline of 33 per cent., compared with a national drop of 23 per cent. The region is not getting its fair share of the little that is going at present.

If the country is ever to regain a firm economic base, it must have an efficient construction industry. If the Government have any will to make regional policy work—and I make no secret of my belief that if the views of the guru from Leeds, the Secretary of State for Industry, are the Government's views, they have no will at all to make regional policy work; I have already told the right hon. Gentleman that to his face, and he did not deny it—

Dr. Hampson

How does the hon. Gentleman reconcile that statement with the fact that the changes announced by my right hon. Friend the Secretary of State have resulted in 80 per cent. of the population of the Northern region now falling within the assisted places category, which is more than any other region except Wales?

Mr. Brown

Because of the very fact that we have had such a raw deal, we want 100 per cent., as we had before, never mind 80 per cent.

If the Government really have any intent to have a regional policy, they could have a dual role, activating the economy in the regions by the use of the construction industry as I have suggested. It must make economic sense. After all is said and done, the supply side of the economy would be assisted because it is investment, not consumption.

On 5 December, when we debated the Government's White Paper, I said that it could well have been entitled the crucifixion of the Northern region of England. I made no apology for saying it then. I underline that the crucifixion is going apace, as it has since the introduction of that White Paper.

5.40 pm

Mr. Mark Lennox-Boyd (Morecambe and Lonsdale)

I am grateful for the opportunity of being called in the debate, but I am not sure whether I have any status to address the House in the eyes of the Opposition. [HON. MEMBERS: "No."] I should like clarification on that point, as some hon. Members are nodding and others are saying "No".

The interesting thing is that part of my constituency lies within Cumbria and part within Lancashire. That is what creates the anomaly. I see the hon. Member for White haven (Dr. Cunningham) nodding, as if to welcome me in making a contribution to the debate. I remind him that the part of my consti- tuency that lies within Cumbria also lies within the area of North-Western Industrial Development Association, as does the constituency of the right hon. Member for Barrow-in-Furness (Mr. Booth). Therefore, I take it that both the right hon. Gentleman and myself would be excluded from some northern development area if a future Labour Government sought to create one. [HON. MEMBERS: "No"] I am glad to be corrected. It is important that these points should be understood. By making this point clear, I hope to demonstrate an important anomaly, which all these discussions create.

The fact is that 60 per cent. of the electorate in my constituency are Lancashire people. The other 40 per cent., who are now Cumbrians, were Lancashire people, but when the county changes took place they became Cumbrian citizens.

My hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliott) indicated that if there were a northern development area there would be cries for one for Yorkshire and Humberside. How right he is. There would be cries for one for Lancashire as well.

Hon. Members, such as myself and my predecessor, have had to try to explain industrial development grants to the people of Lancashire who have not been able to obtain them. Last summer, before the Secretary of State's announcement about the change in status of regional industrial grants, Cumbrian citizens within my constituency had what was, and still is until August of next year, development area status. However, it is ultimately to become a non-assisted area. When that decision was made known to the Lancashire citizens of Morecambe, in my constituency, they felt most relieved about it.

All these discussions about northern development areas and such like create enormous problems of this kind. Representing a constituency straddling two counties and bearing, as I properly do, pressures from constituents in two counties who write to me about these matters, I can see the difficulties created by policies of this kind.

I wish to touch on another aspect of the debate, which concerns matters connected with Cumbria. I hope that the House will be reminded this afternoon that the announcement made last week by my right hon. Friend the Secretary of State for the Environment indicated a modest rise in the rate support grant that will go to the shire counties. Overall, an increase of 0.7 per cent. will accrue to the shire counties. I hope that Opposition Members who represent Cumbrian constituencies will recognise that fact when they make their contributions to the debate.

There has been a suggestion that there should be a development area for the North. Those who advocate such things usually have no experience of business. I know several people in the Lancaster area who are extremely successful in attracting business to Lancashire. Those who know about business do not advocate a development area for the North. At best, it is an excuse for throwing money at the problem and not taking any action at all. At worst, it becomes a drain on public funds and a gross addition to an already overweighted bureaucracy.

Mr. Wrigglesworth

The hon. Gentleman referred to practising business men. I should point out that the northern CBI of practising business men very much supports this proposal.

Mr. Lennox-Boyd

I speak of those who are on a committee, which I attend, called the Lancaster Development Committee. Although it existed prior to the creation of the North-Western Industrial Development Association, it is now held under its auspices. The people who attract industry to Lancashire and are immensely successful are local business men, local chambers of commerce, active local councillors and the executive on the local authority. It does not need a nationally appointed development association to bring that about.

The real contribution that we can make to improve the situation of the North-West is to rely upon the institutions and activities that we already have. I mention the Lancaster Development Committee as an extremely successful body. I understand that it is not within the remit of the debate as Opposition Members see it, but such bodies have in the past made extremely helpful contributions. Rather than consider the creation of yet another bureaucratic institution, let us rely on those bodies that we already have.

5.47 pm

Mr. Giles Radice (Chester-le-Street)

The debate has been remarkable for the number of Labour Members who have attended and for the number of Labour Members who have spoken and are to speak in it. That shows our great concern for the problems of the Northern region. The contrast between the Opposition and Government sides of the House has been glaring. We are not to have the Secretary of State to reply to the debate. The Government have sent the monkey, not the organ grinder. Very few Tory Members have spoken in the debate. Those who have spoken seem to be from Yorkshire or other parts outside the Northern region. Frankly, that shows the Tory lack of concern for the problems of the Northern region. I hope that this point will be taken up by the local press.

I want to deal with Inmos. I should like to remind the Minister why the Northern region requires Inmos. It is not just because of our high rate of unemployment, though we have the highest rate of unemployment of any region. The fact is that we need the new technologically-based industries if the North is to prosper in future. We were extremely pleased that the Labour Government were prepared to say that the production unit should go to a development area, and we had high hopes that it would come to the North. Therefore, we were bitterly disappointed by the decision—a decision basically made by the Government, because they give the industrial development certificates—to locate it in Bristol. That decision implies that Washington, where Inmos would have gone, is unable to attract management, that it does not have the high-quality housing that it in fact has and that the work force does not have the necessary skills. However, anybody who knows anything about the Northern region knows that it has the skills. In short, it is a complete slap in the face for the North.

Mrs. Elaine Kellett-Bowman (Lancaster)

rose—

Mr. Radice

I shall not give way. In addition, the NEB is reneging on its regional commitments. It also shows that the Government are not serious about regional policy.

Mr. Dormand

Is my hon. Friend aware that the chairman of Inmos, who was quoted in The Observer on Sunday, said that the big problem is in recruiting senior engineering and electronics staff because such staff will not go to the industrially depressed areas? Is not that a pointer that the next manufacturing unit might not go to the Northern region?

Mr. Radice

It is a pointer. The Minister is responsible, and he should certainly explain why Inmos did not go to the North.

I raise a further point. The Manpower Services Commission has been forced to cut back on its skillcentre budget because of public spending cuts. At a time of high unemployment, those budgets should be inviolate. The Government say that skillcentres at Darlington, and at Mary-port in Cumbria—an area of very high unemployment and a rehabilitation centre at Felling should be closed. I accept that it is difficult to place people who have benefited from the skillcentres in an area of high unemployment, but the unemployment is precisely why we need the skillcentres. It is a retrograde step to close them.

Mrs. Kellett-Bowman

Will the hon. Member give way?

Mr. Radice

I am not prepared to give way to frivolous interventions. The Government are going back on regional policies because of cynical opportunism. Given the election result, there are no votes in it and the Government have decided not to bother. If it is not cynical opportunism, it is ideological bias. I suspect that a bit of both is involved. It is the time for the Government to be sensible and to change their policies.

5.53 pm

Dr. David Clark (South Shields)

The Northern region contains some of the most beautiful parts of the United Kingdom, and I am surprised to hear that executives will not go to the area. They do not know what they are missing. I could wax eloquent about the Cumbrian mountains, Hadrian's Wall, the Cheviots and the beautiful coastline of Northumberland and Durham. Those remain areas of beauty simply because there is no Law of the jungle. We have strict planning controls and do not allow the free market to operate in those beautiful areas. That is why they remain beautiful and function so well.

The same must be applied to the North's industrial areas. For generations the North has supplied the power for the country. The North, Scotland and Wales supplied the coal for steam, built the ships and produced the steel. Now we are experiencing a change in technology and we are in increasing difficulty. If we leave it to the market forces, about which the Secretary of State so frequently talks, we shall be in for a severe time in the Northern region. The people will not stand for the conditions that prevailed in the 1920s and 1930s, but I suspect that we are heading in that direction.

I do not wish to deal with the industrial base, since my hon. Friends have discussed that adequately. I want to talk about public expenditure. Public expenditure relates to the quality of life. In my constituency, one man in six does not have a job, and yet the Prime Minister talks about the work-shy. Give us the work and we shall show whether we are shy. When there is unemployment and massive deprivation—and the Department of Health and Social Security's investigation shows that the North is a deprived area—public expenditure is vital to deal with the social problems.

There is grave doubt whether the last Government's policy for health resources reallocation will go ahead. When there is no growth, such a policy cannot go ahead and we shall fall further and further behind in health terms. We depend on local government. The largest employer of labour in my constituency is the local authority. On 21 December the Secretary of State sent a missive to local authorities saying that they should aim for a notional rate of 119p in the pound. The average level for Tyne and Wear authorities is already at or above that level.

Mr. W. E. Garrett (Wallsend)

Is my hon. Friend aware that the city of Newcastle has the highest rate level of all and that the North Tyneside metropolitan council has the seventh highest rate in the country?

Dr. Clark

The high rate level is caused not by a waste of money but simply because the money is needed in such areas. The pressures to cut local expenditure can result only in a reduction in services, mass unemployment and redundancies and the quality of life will be decimated.

I hope that the Minister will take the message to his colleagues from moderate people such as my right hon. Friend the Member for Jarrow (Mr. Dixon) that the Armstrong) and my hon. Friend the Member for Jarrow (Mr. Dixon), that the people of the North-East will not stand much longer for the present conditions. I am reminded of a novel by a former Member of the House, Jack Lawson, called "Under the Wheel". That novel is not widely read, but it is worth reading. It describes West Durham in the early part of the century and the emergence of the Labour Party. The author says that the secret service got it wrong when it went round the cellars of Manchester, Liverpool and London looking for the conspirators, those who were going to lead the revolution. The real source of the revolution was in the chapels and union lodges of the Northern region.

We preach that we must follow democratic ways. However, young people do not have our sustained belief in democracy. The Government must not press us too hard. The Government should not leave the economic fate of the Northern region to be dealt with on a free-for-all basis. We need some order, we need some discipline and we need some work.

5.58 pm

Dr. Keith Hampson (Ripon)

I apologise for missing half an hour of the debate. I was dealing with a constituency case that relates to one of the problems at the centre of the debate—the problem of the small business man faced with planning permission difficulties in a semi-urban area. We all have an obligation to ensure that our local authorities do not put difficulties in the way of small business men setting up and expanding.

I hope that I shall be forgiven by Opposition Members for speaking briefly in the debate. I am one of the six Tory Members representing Tyne-Tees constituencies. I was born and educated in Bishop Auckland and have lived with the problems which Opposition Members outlined to the House today. I identify myself with many of the issues that have been brought to the attention of the House today. However, the North has lived with these problems for a long time, and to hear some Labour Members one would imagine that they were a creation of only six months' duration. It is only fair for them to acknowledge the deep-rooted nature of the problems.

I checked the unemployment figures for Teesside, bearing in mind that it was the hon. Member for Thornaby (Mr. Wrigglesworth) who introduced the debate. When his Government left office unemployment was running at 8.7 per cent. In 1970 it was 4.7 per cent. That same situation applies across all the northern constituencies. Unemployment mounted massively during the period of Labour rule. To hear Labour Members speak, one would think there had never been bankruptcy. I ask them to think back to 1976–77. That applied not just to the Northern region. My father-in-law's firm in the West Riding of Yorkshire went bankrupt during that period. That was not a responsibility of the present Government. It is a fact of life with which all Governments have lived.

The heart of the trouble is not the regional structural problems but the fact that something is wrong with manufacturing industry and the nation at large. It is upon manufacturing that all our prosperity—not just that of the North—and our capacity to help the sick and handicapped and to build the roads, the hospitals and the schools depend. We see our overseas rivals, which we used to outpace, now outpacing us.

The decline of the proportion of the labour force engaged in manufacturing industry has very serious implications for regions such as the Northern region. It has implications for the pattern of employment, for unemployment rates, for the distribution of income, and so on. It therefore seems essential that we should not just focus on the problems of the North and on solving them within the context of the North through a northern regional development agency. It is vital that we consider how we can improve the position throughout the nation.

The key to the malaise of this country is the value of the output of manufacturing industry, and there the picture is even worse. Over a decade the value of manufacturing output has grown by 43 per cent. but that is nowhere near the increases achieved in France and Germany and all the other EEC countries. The growing disparity between the value of British manufacturing industry's output and that of other nations in Europe is one of the central issues in this debate about the Northern region, because it is fundamentally a region of manufacturing industry. If Labour Members fail to recognise that, we shall never get anywhere.

I do not want to deal with the structural problems; I want to move from the value of goods produced to the essential ingredient of value, and that is the skill to which each region in the country can turn to ensure that our manufacturing industry turns out the products that are up with the market, that meet the demands of the market, and are of the quality that the market will buy.

I come to three aspects of that. There is a major problem with education, particularly in the North, in terms of the take-up by young people of education and training after they have left school. I do not believe that we need another regional body to co-ordinate these matters, but since Ministers from the Department of Employment and the Department of Industry are present I urge upon them the essential need—it has been long overdue under all Governments since the war—to co-ordinate efforts made through the Department of Industry for the creation of a unit to assist the educational side of training. This must also involve the Department of Employment because of the large amount of resources that go into this area through the Manpower Services Commission and the industrial training boards.

Those boards seem to be the critical cutting edge in the whole of our endeavour to improve manufacturing output in the North and other regions. The boards are taking severe cuts. They are unable to reach their establishment levels for training advisers, who are the people who go out into the field and are responsible for assisting with training and improving skill levels. They are in contrast to a lot of the MSC's structure, which is bureaucratic and far removed from day-to-day operations.

Apart from the problem of skillcentres—I acknowledge that some have been cut back or abolished—we have to consider whether we already have established in further education much of the capacity that we need for retraining which, as Labour Members so rightly insist, is most important. This goes beyond the Department of Employment, the Department of Industry, the discretionary grants and the further education courses that the local education authorities have to offer. It also includes the Department of Health and Social Security. We often overlook the enormous resources that are available in that Department.

It is all very well for hon. Members to urge that more should be spent on particular services, but they be spent on particular services, but they must acknowledge that we are in an era of financial stringency, and we must therefore consider whether money already in the system could be used more effectively than at present. Young people can get money through the social security system by way of supplementary benefit if they take courses of less than 21 hours a week. That would be virtually a full-time skill course. It seems that co-ordination between the Departments of Industry, Employment and Health and Social Security is critically necessary if the Government are to look at this in a national and not just a regional context. I am delighted to see a Minister from the Department of Health and Social Security standing behind the Chair. I hope that he heard my last remarks.

I wish to make a plea for all-party support for the central provision of the Finniston report. If an engineering authority were established, it would provide a focal point for action on the whole quality of manufactured output in this country. It would be able to keep an eye on education from the schools through to further and higher education to ensure that it was geared to the needs of industry in this technological age. It would be able to ensure that business men and companies were able to play their part in the use of engineers and in the training and development of engineering skills. It would, above all, be a catalyst for the future, so that not just the Northern region but the entire country would at long last be able to match the manufacturing skills and products which our rivals abroad are able to offer.

6.7 pm

Mr. Ron Lewis (Carlisle)

This short debate has been initiated by the Opposition, who have devoted half a Supply day to it. That is a shocking indictment of the Government, especially since throughout the debate only two Conservative Members from the Northern region have attended.

Dr. Hampson

Three.

Mr. Lewis

What about the Chief Whip, the Home Secretary and the right hon. and learned Member for Hexham (Mr.Rippon)? They all represent seats in the Northern region. I give credit to the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott), who is consistent in his attendance at debates on the Northern region. Five minutes after having entered the Chamber at 5.45, a part-time member of this House sought to interrupt one of my hon. Friends—

Mrs. Kellett-Bowman

rose—

Mr. Lewis

I thought that the hon. Lady would rise to the bait.

Mrs. Kellett-Bowman

Will the hon. Gentleman give way?

Mr. Lewis

No.

Mrs. Kellett-Bowman

rose—

Mr. Deputy Speaker

Order. If the hon. Member for Carlisle (Mr. Lewis) is not giving way, the hon. Lady should not persist. This is a short debate, and I hope that hon. Members will not engage in this kind of argument.

Mrs. Kellett-Bowman

On a point of order, Mr. Speaker. The hon. Member for Carlisle (Mr. Lewis) is doing me a disservice. I was discussing these precise problems with the Department of Industry, and that is why I was late.

Mr. Lewis

The debate is taking place on the Floor of the House, not at the Department of Industry. If the hon. Lady was so keen to attend the debate—she is a part-time Member—she should have been here when we started at 3.30.

Mr. Dormand

The hon. Lady does not represent the Northern region.

Mr. Lewis

I hear my hon. Friend say that, but I am not sure. I believe that she is the representative for Cumbria at the European Assembly.

Mr. Deputy Speaker

Order. This is a short debate, and there are three other hon. Members waiting to take part.

Mr. Lewis

I think it right to have those facts on record because not only some of my constituents but constituents of others of my hon. Friends who may not have a chance to speak will be wondering why poaching from other regions should have taken place during a debate on the North.

I shall concentrate briefly on my own part of the country. There is always a tendency for people to think that, although we are in the North-West of England, we are not really anywhere. In fact, we are in the Northern region, which is more than the hon. Member for Ripon (Dr. Hampson) can say. We have our problems, just as other parts of the region have theirs, and, of course, one of the serious problems facing us in the far North-West, in company with others, is unemployment.

In my part of the country—the same has been true in other parts of the region—a number of redundancies have been announced in textiles, and I understand that further redundancies in other industries are likely to be in the pipeline. Thus, under this Government, I foresee the Northern region experiencing a sharp decline in employment during the days ahead.

At one time British Rail was the largest employer in my constituency. Now, the largest employer is the Ministry of Defence, through the Royal Air Force. Under the Labour Government, the top brass in the Royal Air Force in Carlisle and other parts recommended to my hon. Friend the Member for Pontypridd (Mr. John), then the Minister responsible, that part of the Royal Air Force No. 14 Maintenance Unit should be transferred to Harrogate. After meeting a deputation, my hon. Friend rightly turned that down. Rumour has it that the top brass are now suggesting to the present Government that what was turned down by a Labour Government should go ahead under the Tories, namely, the transfer of part of No. 14 MU RAF Carlisle to Harrogate. I hope that we can have an assurance to pass on to those in my constituency who work at No. 14 MU Carlisle that that move will not take place.

During the election campaign Conservative candidates in the Northern region were keen to assure the electors that, in the event of a Tory victory, the quality of services generally would be maintained. Now, about 10 months later, instead of their quality being maintained, the state of our services is quite otherwise There are extensive cuts in the health budget for the Northern region, and in my part of the country we have had to bow to the Government's squeeze, with the result that services are being axed here and there.

Massive cuts in the Health Service seem now to be the order of the day, and prescription charges have risen by about 350 per cent. under this Government, a Government who gave an undertaking about 10 months ago that services generally would be maintained.

I had a letter from a constituent today—I shall not quote it because of the time—deploring what has been happening under this Tory Government. I promised to be brief, and I shall be, so I close with a reference to one specific matter which is worrying us in Cumbria, namely, the provision of education services and, in particular, transport for education in Cumbria and in Carlisle.

My guess is that a number of jobs will be lost in the teaching profession and as a result the standard of education may not be maintained. The Cumberland county council, which is Tory-controlled, imposed secrecy and would not allow the press into its meetings, but we know that it followed the pattern set by the Tory Government, and it has considerably slashed the provision of transport for various schools in my constituency.

The right hon. Lady the Prime Minister was responsible for cutting free milk for schoolchildren, and now school transport is being savagely raped by the Cumberland county council, more or less acting on the instructions of the Tory Government. This is causing great public concern in Carlisle and elsewhere in the Northern region, which will mean 20p per day for people in Carlisle.

I am grateful to the House for its tolerance in hearing me for a few minutes. I end by assuring the Government that whenever the next election comes, be it general election, local government election or even European Assembly, the electors of Cumbria will remember what is happening now.

6.16 pm

Mr. Gordon A. T. Bagier (Sunderland, South)

As a Member for Sunderland, an area experiencing very difficult unemployment—in fact, it is one of the serious pockets of unemployment in the Northern region—I welcome the opportunity to speak for a few minutes, and I assure my hon. Friends that they will be but a few minutes. This debate has arisen because of the realisation in the Northern region that we can look forward to nothing from the present Government. Since they were elected last May, we have seen move after move that has done nothing but harm to our region.

I welcome the presence of the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott), who always speaks for the region, but I could not help feeling that he had his tongue in his cheek when he said that Labour had failed. If he had said that Labour did not solve the unemployment problem in the Northern region, I could agree with him to some extent, but if he asserts that the Tory Government are doing something to put matters right, I can only assure him, notwithstanding the way in which he always speaks for the region, that he must have his blinkers firmly on.

Sir William Elliott

rose—

Mr. Bagier

I cannot give way because there is no time, but I shall be happy to discuss these matters later if the hon. Gentleman wishes.

The hon. Gentleman tells us that his Government have been doing something. Indeed, they have. There has been a massive application of medicine throughout the country. The indictment of the Government is that they have not sought to protect or cushion against the impact of those measures the regions that are already badly hurt. The medicine applied over the whole country has been administered to every region, no matter what its circumstances, and it is in this context that we must emphasise to the Government the enormous harm that is being done.

For example, what good has it done to the region to cut £25 million from the youth opportunities programme? What good has it done to the region to cut £42 million from the special temporary employment programme? What good has it done to reduce the amount to be made available for education grants? What purpose has been achieved by slashing youth services?

The high minimum lending rate and high interest charges are preventing those engaged in a smaller way of business from expanding and providing necessary jobs. Local government cutbacks are being introduced despite impending unemployment. That will have an effect throughout the country, including the more prosperous regions. However, it is noticeable that the shire regions have been cushioned from most of the blows that I have mentioned.

The Government's IDC policy, their high rates of interest and the high level of VAT cannot be said to be cushioning the regions from the medicine that has been applied throughout the country. I am talking of specific measures that are increasing unemployment in the Northern region. When the local government cuts take place, my local authority colleagues will have my deepest sympathy. The sensible Labour-controlled councils will be faced with the difficulty of applying the tough medicine that the Government wish to implement. Local authorities know that that will create even more unemployment.

A constituency problem has been brought to my notice in a letter that I received from the chief executive of the area that I represent. The subject matter is the housing investment programme. I hope that I am not reading anything sinister into the letter, but I understand from the chief executive that the housing investment programme for 1980–81 has not yet been agreed by the Secretary of State for the Environment. What has happened to young Tarzan? Why is the right hon. Gentleman so shy about coming forward with the figures?

Sunderland's authority is having to agree tenders for about £5½ million worth of work for 1980–81 in the absence of an indication of the sum that will be made available by central Government. We also have the embarrassment of a programme that is designed to provide necessary improvements for council houses. It will not be possible to go ahead with that programme because it is not known from where the money will come. Last year, agreement on the figures was reached on 29 November. Why is the Secretary of State so shy this year?

6.23 pm

Mr. Derek Foster (Bishop Auckland)

It is vital for the Government to appreciate the rising tide of anger, if not despair, in the Northern region. It has long had the highest unemployment level in Britain and more than its fair share of the 300,000 and more long-term unemployed. The Government expect unemployment to increase still further by at least 300,000. The Northern region can expect to suffer disproportionately. That is the prospect at a time when 12 people are chasing every vacancy in the region. However, the Government want to penalise those people by taxing or reducing benefits. The Government argue that that will strengthen the incentive to work. Do they not realise that the reduction in regional income must multiply further job losses, more redundancy payments and even more claimants?

In the North there is a great willingness and eagerness to work. What the region lacks is jobs. Northern working people have always been deeply sceptical about central Government. They believe that there is little knowledge of, understanding of, or sympathy for their stuggles either in Westminster or Whitehall. It may be that the communication gap between upper-middle-class Oxbridge values and working-class values underlies our relative industrial decline.

Many northerners would welcome more control over their own affairs. However, they recognise that further massive central Government support is necessary for at least another 15 years if the region is to achieve self-sustaining growth. We in the North are anxious to work in a constructive partnership with any Government who have an ambitious regional development policy. When unemployment is increasing, when industrial development has become—nationally and internationally—much more competitive, and when central London, the Midlands and every inner city area have entered the job-hunting arena, the North has been greatly disadvantaged by the Scottish, Welsh and Northern Ireland Development Agencies. The problems in the North are as severe and long-standing as those faced by Scotland, Wales and Northern Ireland. We must have a development agency. Without it the judgment of northern people will remain that this is the most harsh and inhumane regime of the century and that its overthrow cannot come too quickly.

6.26 pm

Mr. Ted Leadbitter (Hartlepool)

For some decades we have been debating the same problem. During the many years that I have been in public life, I cannot recall one new argument that has been presented in the debate. We must address ourselves with some pertinence to the general attitudes that impinge upon the vexing issue of the Northern region and its economic prospects.

We are living in a time in which economics have gone mad. For example, a ship arrived in Hartlepool flying the West German flag and carrying East European steel that had been subsidised by a Communist State. That ship had a Common Market licence. The steel workers of Hartlepool are being put out of work, but during the present steel strike we have learnt that two ports on the North-East Coast import 25 per cent. of the United Kingdom's domestic requirement. That is economics gone mad.

On the other hand, we build large steel complexes, albeit on the basis that with basic oxygen systems unit costs of production will be better. We listen to clever people explaining how that will be achieved. However, we learn that our domestic demand is about half of our capacity. It is inevitable that our unit costs will increase. That is economics gone mad.

In recent times we have had the most reactionary Government this century, with the most reactionary Prime Minister. The Government and the Prime Minister are supported by the Ayatollah of Leeds, North-East, the Secretary of State for Industry. The right hon. Gentleman pleads for a non-intervention policy. He did so only the other day. However, intervention is affecting those in the Northern region. Gas prices are forced up although that is not required by the gas industry. Price control is abolished and prices are allowed to rise. The right hon. and learned Gentleman the Chancellor of the Exchequer, who is not short of a penny or two himself and can afford to pay increased charges for gas and higher prices generally, increases the rate of value added tax to 15 per cent. Therefore, regions such as the Northern region are immediately affected. Hardship is imposed upon the regions.

Mr. Robert C. Brown

Has my hon. Friend noticed that at 6.28 pm the hon. Member for Tynemouth (Mr. Trotter) has only just walked into the Chamber?

Mr. Neville Trotter (Tynemouth)

On a point of order, Mr. Deputy Speaker. I have been attending an extremely important constituency luncheon engagement. I came to London on the first available plane thereafter.

Mr. Leadbitter

My hon. Friend the Member for Sunderland, South (Mr. Bagier) mentioned that the youth opportunities programme and the special temporary employment programme have suffered greatly from the Government's cuts. However, when we go through a political exercise—that is all that it is, and it happened when the previous Labour Government were in office—of pleading for work and investment in the regions, an appeal is made to the Common Market and we have, for example, the Davignon formula for steel, which I have described on previous occasions. We pay the EEC £1,000 million net. We give large grants, amounting to millions of pounds, to some parts of the Third world which do not trade with us in a reciprocal manner. We forget the simple philosophy that, in some cases, charity ought to begin at home.

In my region there are cuts in hospital services, thousands of nurses unable to find work, thousands of teachers out of work in our schools, fewer books, less transport and less food—or, if not less food, higher charges in order that children cannot buy that food. The whole social and economic infrastructure is placed at risk.

The Government have brought to a head the crucial problems facing the country and it is time that they spoke with some sense. I hope that when the Minister replies he will not give us any more claptrap, because we have had enough from the Ayatollah, the right hon. Member for Leeds, North-East (Sir K. Joseph), and from the abbrasive lady, the Prime Minister.

6.32 pm

Mr. Ted Fletcher (Darlington)

I refer to a constituency matter that has repercussions in the North-East. As a consequence of the public service cuts, it has been proposed that certain skillcentres should be closed, and 20 are currently under review. One of them is in my constituency of Darlington, and another is likely to be Maryport. In addition, one of the three rehabilitation centres in the North-East at Killingworth, Felling and Billingham is scheduled for closure. I understand that at Billingham the trainees, who are disabled, have been asked whether it would be possible for them to travel 30 miles every day to Felling to continue their instruction.

There are seven skillcentres in the North-East. Darlington has a tremendous record of placing as many as 80 per cent. of the trainees in employment after initial training. Twenty-three of the trainees are sponsored by British Rail and prominent firms in the North-East to the extent of£65 per year. As a consequence, the Government are receiving some income. It is inexplicable why the Government have decided to put Darlington on the list when it is an area that attracts from southern Durham many trainees who are vital and necessary to small firms, especially those moving into the district.

The hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) mentioned that his heart bled for the youngsters leaving school with no training facilities available. There was hardly a dry eye on this side of the House. Why does not the hon. Gentleman approach his Government and ask them why they intend to cut the staff of the Manpower Services Commission by 3,400, cut the training staff of skillcentres by 520, and cut the staff of rehabilitation centres by another 100 in the next three years?

Yet the Government speak plausibly about the needs of the North-East. They say "If only we had more skilled men in the North-East, small industries would flock to the North-East." They are deliberately economising at the expense of our employment prospects. When the Minister replies, I hope that he will never mention that we need more skilled men in the North-East as the Government are doing everything that they can to frustrate our efforts to recruit skilled people.

The best contribution that could be made by the hon. Member for Newcastle upon Tyne, North, if he is so concerned and sincere in his desire to see the youngsters that he described to us so vividly receive training, would be to go to his Government and say "I am not prepared to vote for these cuts in the skillcentres. I intend to fight to keep them open."

I hope that my few remarks will induce the Government to think again, especially about Darlington. They will receive letters from the local authority and employers' organisations urging them to reconsider their decision. I hope that my small contribution will lead in that direction and that the skillcentre will remain open.

6.35 pm

Dr. John Cunningham (White haven)

The burden of the argument in the debate from these Benches has been about intervention in the economy and the responsibility of any Government to take that course—intervention in the industrial scene and in the public sector. Nowhere is that sort of approach to economic and social difficulties more necessary than in the Northern region. The narrowness of the traditional industrial base—coal, steel, shipbuilding and heavy engineering—is, even now, under further attack because of the Government's cash limits policies. That applies especially in steel but has repercussions in coal—perhaps the coalfields of Durham—and shipbuilding on Tyneside, Wearside and Teesside. Our heavy engineering industries associated with shipbuilding would be placed in jeopardy.

Industrial intervention is called for. As my hon. Friend the Member for South Shields (Dr. Clark) so vividly illustrated, public expenditure through the local authorities is crucially important in the Northern region. That is a complementary factor, especially in view of the narrowness of the industrial base. I hope that when the Minister replies he will meet that point head on. There is no argument that he could advance or sustain that would lead anyone on this side of the House to believe that these problems would be resolved by the market forces about which the Government are keen to speak.

I agree with the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) that regional policies have not solved the problems of the Northern region. That is clear and we accept it. However, they have been making a positive and necessary contribution. I hope that the hon. Gentleman will agree with me.

Given the difficulties of the British, economy—they are not all the responsibility of the Government, and we need not waste time saying that they are—and of the world recession, surely it is the worst possible time to diminish regional support to an area such as the Northern region. If the Minister says that market forces will resolve the problems, we say that they are a bit slow oft the mark. Market forces have been with us for even longer than regional policy. Therefore, his argument is even more true in the case of the market forces approach to the economy. They have caused many of the deep-seated and structural problems with which the Northern region has much difficulty.

The Minister may tell us that the Government cannot find the money, but the people of the Northern region will recall that the Government found £1.6 billion in tax cuts in the last Budget for the benefit of the top 6 per cent. of high income earners in the United Kingdom. Set beside that amount, the support that we are suggesting for the Northern region should be made available when considering the problems that exist, especially for youngsters. In my constituency, youngsters with O-levels and A-levels are hopelessly under-employed—working in garages serving petrol. That is absolutely disastrous for the long-term future of our industries. It is under-utilisation of the tremendous talents to be found in our youngsters. Even worse, some youngsters cannot find any sort of job.

Whatever else this Government may be able to say—they cannot say much so far—their actions have further disadvantaged the region, whether we talk about local government expenditure, public sector expenditure or the small firms about which we have heard so much. Crisis-level interest rates and 15 per cent. VAT are absolutely inimical to the interests of small firms. Far from helping the economic climate, they have further damaged opportunity.

I hope that the Minister will not make any criticism of trade unions for preventing change in the region. Far from preventing Change, in the coalfields, in the shipyards and in industry as a whole—in my constituency, iron ore mining and coal mining have disappeared, to be replaced by the nuclear industry—trade unions have welcomed change and sought to bring it about, but they will not welcome it when, as at present, no alternative employment opportunities exist.

We seek some answers and some commitment. We seek particularly a response to the case for a Northern development agency. Although it will not solve the problems, it will help to make a significant contribution to dealing with them.

6.41 pm

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

It is good for the House to turn its attention in some depth to the problems of a specific part of the country. Like other hon. Members, I congratulate the hon. Member for Thornaby (Mr. Wrigglesworth) on the way in which he opened the debate.

The debate has been generally constructive, with perhaps a certain amount of politicking about the numbers of Members returned for the Labour Party in the Northern region. They may indeed be 81 per cent. of the Members, but they received only 50 per cent. of the votes. That should not be overlooked.

There is a certain irony in my first appearance as a Minister in a debate about the Northern region, because my father, like many others in the shipbuilding industry, was twice unemployed in the 1920s and migrated south. The right hon. Member for Durham, North-West (Mr. Armstrong) referred to the situation which existed then, thereby underlining the length of time that this has been the case.

I share the concern expressed by many hon. Members about the high and sustained level of unemployment in certain parts of the region. Figures are easy to give, but they do not record the personal anguish of those out of work. There is still a loss of self-respect, a failure to achieve expectations, family hopes and plans dashed, perhaps never to be fulfilled. The hon. Member for Newcastle upon Tyne, West (Mr. Brown) spoke eloquently about that.

Two aspects of unemployment stand out in my mind. The first is the serious increases of the last five years, the second is the chronic and deep-seated nature of the underlying problems.

Unemployment in the Northern region doubled between 1974 and 1979. My hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliott) pointed out that this was not the product of a new Conservative Government. In fact, unemployment in the region went up under the previous Government from 4.2 to 8.5 per cent. It is certainly not something that we caused: it is very deep-seated.

The right hon. Member for Houghton-le-Spring (Mr. Urwin) said that the region had been top of the unemployment league for far too long. That is true. Regrettably, under all Governments, going back to the 1930s and the 1920s, in spite of all that has been done with agreement on both sides of the House, the same structural problems in the same areas still confront this region.

Like all other hon. Members, we on this side care deeply about unemployment and the problems of the unemployed. I therefore want to turn now to our assisted area policy. The situation that we inherited in this respect was that the aid was spread too thinly and too widely to be effective. We found that 40 per cent. of the country had assisted area status and, what was more important, that under the criteria applied then there was no way in which we could resist the applications of Birmingham, Wolver Hampton and the whole of the West Midlands for the same status.

If we had continued that policy, we would have been well on the road to giving assisted area status to over 50 per cent. of the country and to a point at which everybody would be taking money from everybody's pockets in order to put it back into everybody's pockets.

We have sought to concentrate assistance on the areas of greatest need. We have reduced the application of assisted area status to 25 per cent. of the country. That is a substantial change and it means that those which remain assisted areas stand out and become relatively much more attractive.

Even after the changes, 81.5 per cent. of the population in the Northern region will be in a special development area or a development area. That is the highest proportion anywhere in England. As we have rolled back the rest of the map and made the Northern region stand out, so it should benefit relatively more from this policy than it did before.

We have also sought to single out the special development areas, those which have had the most deep-seated structural problems, by retaining the 22 per cent. rate, and we have widened the differential for special development areas from 2 to 7 per cent. Thus, any industry which is considering whether to move will find the SDAs much more attractive now. We believe that that will make a substantial difference.

Mr. Campbell-Savours

The Minister refers to the need to put the emphasis on the areas of greatest need. Surely, the unemployment figures in ratio to the number of job vacancies are the real criterion which should determine where the aid goes. In one town in my constituency 45 people are chasing one job, yet under the Government's proposals the SDA status of that area is being downgraded to development area status. Surely, that is defeating the whole object of the policy.

Mr. Mitchell

Had the hon. Member intervened earlier, I would have dealt in depth with the reasoning applied in the case of his constituency. I do not have all the constituency figures at my fingertips at this moment, but if there is any aspect of the matter which we may not have taken fully into account, I am prepared to look at it carefully.

We have sought to apply a criterion right across the country. There has been no political favouritism. No one can point to a marginal seat which has been favoured. Some of my hon. Friends in North Devon and parts of Wales will no doubt complain furiously, but we have sought a criterion based on the conditions in the 1972 Act and applied it absolutely fairly. By concentrating on the SDAs in this way, we see to give them relatively more help.

Perhaps it will be of some assurance to hon. Members who have raised this matter to know that if there are changes in the relative unemployment in any particular travel-to-work area, subject to the decisions that we have taken, we are prepared to look at those areas again if hon. Members will raise them with me.

The hon. Members for Thornaby and for White haven (Dr. Cunningham) asked me to announce a wholesale reversal of our assisted area policy. For the reasons that I have just sketched out, it would be wrong to go back to the well-meaning but failed policies that we have sought to sweep away.

The hon. Member for Consett (Mr. Watkins) raised the question of the steelworks closure in his constituency. He said that he forecast at the general election that a Conservative Government would close the steelworks at Consett. The closure decision is a matter for the BSC board. Perhaps the hon. Gentleman has recognised a distasteful but essential logic inherent in the commissioning of new plant. He stressed the need for improved communications and for more factory building, and he indicated that local resources were unable to cope on their own.

I accept and recognise the need for diversification. An 80-acre site is now available, and two factories totalling 33,000 sq. ft. are in the process of being built. I join the hon. Gentleman in his deep sense of concern for his constituency and for the problems which face the town of Consett. He and representatives of the local authority are to visit me. I shall listen to what they say and consider constructively what can be done.

Mr. David Watkins

I appreciate the remarks of the Under-Secretary of State. Is he seriously suggesting that the British Steel Corporation in its programme of closures is acting outside the lines laid down by the Government?

Mr. Mitchell

The BSC is following the inevitable logic of having recently commissioned new low-cost plant.

My hon. Friend the Member for Newcastle upon Tyne, North, the right hon. Member for Houghton-le-Spring, the hon. Member for Jarrow (Mr. Dixon)and the hon. Member for South Shields (Dr. Clark) raised the matter of the siting of the first Inmos production plant. That decision was made by Inmos. The burden of the Inmos board's arguments is that the first plant is a high-risk, advanced technology plant and, in the opinion of the management, it needs to be close to and closely integrated with the technology centre in Bristol. I understand that the North-East, South Wales and assisted areas in the South-West were considered. Inmos stated publicly that the second production plant would be in an assisted area. The right hon. Member for Houghton-le-Spring sought an assurance on that.

Mr. Radice

rose—

Mr. Mitchell

Ministers are aware of the concern of right hon. and hon. Members, and they will study carefully the points made today.

I accept the points made by the hon. Member for South Shields about the attractiveness of the North-East Coast and of Cumbria and have pointed out that that is not a valid argument for the decision. I have given the reasons, and I undertake that the points made today will be brought to the attention of Ministers.

I turn to the question of a northern development agency, which was raised by the hon. Member for Bishop Auckland (Mr. Foster). I recognise the desire of the Labour Party to set up a northern development agency. However, the previous Labour Government throughout their life had the opportunity to do something about it but they did nothing until the eve of the election and then raised the matter as an election cry in their manifesto. If they believed so deeply about it, why did they not do something? My right hon. Friend the Secretary of State received a deputation last December. He listened carefully to what was said and is now considering the arguments.

The right hon. Member for Houghton-le-Spring was deeply concerned about BSC's extensive imports of coking coal. He called it a callous failure of the Government to intervene to direct British Steel to buy British coking coal, even if if is more expensive. I ask the House to follow through the consequences of that. If we have higher-cost coking coal, we have higher-cost steel. If we have higher-cost steel, there will be fewer sales. If there are fewer sales, there will be fewer jobs in the steel industry. I do not think that the right hon. Gentleman was seeking that. If the consumers of British steel—in the engineering industries—are forced to buy more expensive British steel, the level of unemployment will be raised in the engineering industries because they will not be able to sell more expensive products. It is with regret that we must recognise an economic reality.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) asked about the location of the Sterling Winthrop research laboratory project. It will be located in Alnwick in his constituency and is being supported by section 7 assistance. After completion, in about two or three years' time, it will provide employment for 130 people.

The hon. Member for Newcastle-upon-Tyne, West raised the case of a 714certificate. I hope that he will write to me about that matter, because I should like to consider it. The hon. Member for Chester-le-Street (Mr. Radice) raised the matter of the review of skillcentres. No decision has been taken, and the matter will be dealt with in an Adjournment debate this evening by my hon. Friend the Under-Secretary of State for Employment.

The hon. Member for Jarrow raised the question of IDCs, which he described as shortening the stick with which to beat firms to move to the North-East. The problem is that many of the firms which were initially refused IDCs do not then move to a development area. They melt away. Some go abroad and then come back to Britain. Others find some other way. Sometimes it does not happen.

The hon. Gentleman said something of profound importance when he stated that if the national economy catches an economic chill, the North-East gets pneumonia. That is right. Nothing helps the region more than a virile national economy. That is why the Government have been making changes in their overall economic policy, for which the cuts in regional policy and financial savings are all part of the overall package designed to bring about a more virile national economy.

In the medical world there is a trend towards prevention, not cure. Equally, in the economic field we must move to the prevention of unemployment in the future by the starting up of more businesses now. That is the main need of the North-East and of so much of the country. There should be more firms. That cannot be done by importing firms. Firms cannot be bought. There is much less mobile industry in Britain now than in the past. Throughout recent years the amount of mobile industry has been steadily falling. We must see far more home-grown industry. I pay tribute to the many hon. Members who have drawn attention to the importance of small businesses. They are the seedcorn from which jobs will develop.

Mr. David Watkins

What about a reduction in the interest rates?

Mr. Mitchell

The hon. Gentleman calls for a reduction in the interest rates. If the Labour Government had not left us with a legacy of rip-roaring inflation, we would be able to do that. It ill becomes the hon. Gentleman to refer to the legacy left by the Labour Government and to attack our methods of dealing with it.

The country needs many more businesses. The North-East has fewer entrepreneurs than other parts of the country. We must encourage them. I pay tribute to what Enterprise North and Durham university have done to try to bring that about. The North-East is paying the penalty of nineteenth century success. We should ask ourselves how and why that success was built. It was built on a climate which rewarded enterprise. It was built on a business climate where business was not burdened by constant Government intervention, regulation and control. The re-creation of that climate is an essential part of the Government's policies. We are seeking to create a cult of success, incentives for people to start businesses and a new climate for success in the future.

Mr. John MacGregor (Lords Commissioner of the Treasury)

I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.