§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
11.56 pm§ Mrs. Ann Taylor (Bolton, West)I wish to raise a subject that is extremely important to my constituency and to everyone in the Bolton area—that is why some of my colleagues are present — namely, the withdrawal of assisted area status from the area. Bolton has already lost the right to regional grants and it is to lose all the help that has been available since 1972, when it was given intermediate area status.
The decision to withdraw intermediate area status from Bolton was taken shortly after the Government came to office. Many of us thought that the decision was hasty and short-sighted. When we said at the time that the Government had not thought out the consequences of what they were doing and had taken a hasty decision that would have a detrimental effect on Bolton, none of us believed that the employment position and industrial base in Bolton would deteriorate so rapidly and cause such a great deal of alarm and concern in the whole area.
I remind the Minister that a Conservative Government first granted intermediate area status to Bolton in 1972. In the middle of 1972 there were exactly 4,952, or 4.7 per cent. of the working population of Bolton, unemployed. The Tory Government at that time rightly thought that, because of the decline of the textile industry and other factors, Bolton had enough unemployment problems to warrant giving it intermediate area status.
What do the Government think has happened since then to justify withdrawal of intermediate area status from Bolton? Do they think that Bolton has no unemployment problem? Do they think that Bolton has a healthy industrial base? Anyone who knows the town and what is happening will realise that Bolton has serious problems.
As I have said, unemployment in the middle of 1972 when we got development area status was 4.7 per cent. When the Government decided to withdraw our intermediate area status in the middle of last year, unemployment was 6,521, or 5.9 per cent. The Government decided to give us intermediate area status when unemployment was 4.7 per cent., but when unemployment had climbed to 5.9 per cent. they decided that it should be withdrawn.
685 That was a year ago. What has happened since then? The latest figures show that unemployment in Bolton is 11,433. That is 10.3 per cent. That is not counting more than 1,000 young people who are at present in artificial jobs created by the youth opportunities programme. So that is an increase from 5.9 per cent. to 10.3 per cent. between the announcement of the withdrawal of intermediate area status and the present time. I would not like to hazard a guess about what the unemployment figures will be in another 18 months' time if the Government continue with their present patterns.
Even tonight in Bolton there was another announcement of massive redundancies, in that 519 jobs are to go at Edbros in Bolton. That is typical of the announcements that we are getting week after week, which are causing so much concern in Bolton, because as well as a great deal of unemployment we have a great deal of short-time working, which is not giving any kind of confidence to people in the town.
The fact of the matter is that in recent years Bolton's unemployment level has been fairly close to the national average, but in recent months unemployment in Bolton has become very much more severe than the national average and our unemployment rate is accelerating far faster than the national rate.
Therefore, although the Minister may say this evening that his Department does not want to spread the funds available too thinly, I warn him that if areas such as Bolton are to get no assistance whatever and have the assistance that we have had removed, he will put us in the situation of requiring more help later on. Bolton does not want to become a special development area. What we want is a little more help at present so that we do not come to suffer the problems of the areas which have special development area status. I ask the Minister to accept that there has been a very dramatic decline in Bolton's industrial base over the last year or so.
§ Mr. Roger Stott (Westhoughton)Both my hon. Friend and I have the honour to represent part of the metropolitan borough of Bolton. I should like to supplement what she is saying by citing a very pertinent example. Since the withdrawal of intermediate area status from Bolton, a firm in my constituency is now considering closing down its operation and re-establishing itself in another area which has special development area status, where the grants and facilities for the industry concerned continue. That means a further nail in the partially constructed coffin which my hon. Friend and I represent in terms of unemployment in our area.
That is the crucial question that this debate is raising. I suggest that there is a direct correlation between the withdrawal of intermediate area status in the Bolton travel-to-work area and the level of unemployment now pertaining.
§ Mrs. TaylorI am grateful to my hon. Friend the Member for Westhoughton (Mr. Stott). I know that he shares the concern of many people in Bolton. The example that he cited illustrates the sort of problem that is already arising — and we still have some time to go before intermediate area status is withdrawn. My hon. Friend shares my concern about the number of firms in Bolton that have already gone out of business because of the recession. If the economy revives, which does not look likely at the moment, what sort of basis for expansion will we be left with in Bolton?
686 I accept that the availability of intermediate area status and the grants that go with it are not the be-all and end-all of attracting industry, but often they will be the extra factor that tips the balance in just the sort of case mentioned by my hon. Friend the Member for Westhoughton. A few small firms have had to move premises and they have moved out of Bolton because they know that they will not get grants to expand if they remain. We are worried that some of the larger companies may move. Some may have ties with Bolton, but many will have managements outside the town. We wonder where they will expand and develop when things improve. We think that they will not come to Bolton in future, especially as we are on the edge of areas such as Wigan, where companies can get much more help. Of sourse, we shall also face competition from enterprise zones.
Even though we have skilled workers in Bolton, good industrial relations and a good industrial record, we shall not be able to counter the financial incentives that will lure firms to other places. It is sad that when companies move to special development areas they will not be moving from the South-East, as they should, but will be attracted away from other parts of the North and areas such as Bolton. We are also worried about losing section 7 aid and EEC grants.
When the Secretary of State made his original announcement in July last year about changes in the Government's regional policy, he said—and he repeated this at a subsequent meeting with me and my colleagues—that the areas that were due to become non-assisted areas would be subject to special reviews before descheduling took final effect. I hope that the Minister of State will confirm that and will acknowledge that Bolton has a good case for retaining intermediate area status. Unemployment in the town is now more than double what it was when intermediate area status was granted.
I hope that the Minister will recognise the dramatic changes in unemployment in Bolton that have occurred in the past year and that the situation in Bolton has got relatively worse compared with that in many other areas. I hope that he will agree to look again at the decision that has been taken and will tell us something about the special review that the Secretary of State promised. I hope that he will also give us information about the criteria on which Bolton was taken out of the intermediate areas and will say that he does not have a closed mind but will be able to offer some hope to industry and workers in Bolton so that they will not have to suffer the same concerns, worries and rising unemployment as have dogged them for the past 12 months.
§ 12.9 am
§ Mr. David Young (Bolton, East)My hon. Friend the Member for Bolton, West (Mrs. Taylor) has outlined succinctly the main case that we are putting to the Minister but any case for the giving back of status to Bolton must, of course, be assessed against the present position.
By every criterion, the position has deteriorated. We have double the number of unemployed of a year ago, double the number of unemployed school leavers and double the number of young unemployed. By every criterion, there has been a vast increase in unemployment.
I know that the Government have introduced certain measures during the past week. They will be cosmetic unless there exists an industrial base to absorb them. Our case is that over the last year the industrial base of Bolton has been pulverised. There have been closures in textiles, 687 leather, engineering, electronics, vehicles, rubber, plastics, clothing, paper, printing and food. We survived through previous recessions because we had diversified. That diversified base is now being eroded. Firms are closing daily. Redundancies are being declared daily. The CBI was growling about this very point at its conference, albeit that in the last resort the growl came from rather toothless jaws.
We must have this base. I must refer to the young unemployed. It is no good paying out money for schemes unless at the end of the day jobs are provided by industry. Those jobs are not available at the moment. The longer that young people and others are unemployed, the more unemployable they become. There is a strong case for reassessing the position of Bolton because of the situation in which we find ourselves.
I did not agree with the Government's decision when the status was originally withdrawn. I understood that their argument was that money should be put where it could do most good. The situation has changed nationally. There is a strong case for Bolton's status to be restored. Because of shortage of money and incentives, companies in my constituency are scrapping schemes that would have allowed for mobility of labour. These schemes are needed if we are to take off when a boom comes.
Unless it is the deliberate policy of the Government to create a wasteland in Bolton and the surrounding district, the Minister should put to the Government the need to reassess the position and restore Bolton's intermediate area status.
§ The Minister of State, Department of Industry (Mr. Adam Butler)It is a measure of the importance that the two hon. Members who represent Bolton, supported by two of their hon. Friends, attach to this subject that five people, as opposed to the more usual number of two, should be involved in the debate. I congratulate particularly the hon. Member for Bolton, West (Mrs. Taylor) on the reasoned manner in which she has presented her case, supported with considerable feeling by her two hon. Friends.
I do not believe that I shall be able to help directly in responding to the particular request that the hon. Lady has made. We in the Department understand very well the kind of problems that are occurring in Bolton. The hon. Lady and the hon. Member for Bolton, East (Mr. Young) referred to the problems of youth unemployment. If one has to single out a group of people in today's situation, it must be agreed that the young should receive special attention. That was why the massive extension of the youth opportunities programme featured so largely in the measures introduced recently by my right hon. Friend the Secretary of State for Employment.
I shall spend a few minutes going over the basis of the Government's regional policy, because in that policy are to be found most of the answers to the questions that have been raised.
Successive Governments have operated varying degrees of regional policy, designed principally to regenerate industry in the areas in which traditional industries are in decline and which appear to suffer persistent problems of high unemployment. Although the hon. Lady made considerable play of the difference in the 688 percentage figures of employment today compared with 1972, the relative position of areas is one of the principal considerations.
When the present Government came into office, we set about reviewing the position. We found that about 45 per cent. of the employed population were covered by assisted areas. The whole purpose of operating a regional policy and having assisted areas is that there should be a distinction between them and the rest of the country. To have nearly half the country covered by assisted areas seemed to us to frustrate the purpose of regional policy.
Therefore, we decided that we should have to apply a more selective policy and — I admit — to reduce the expenditure going into the areas. The reason for the reduction in expenditure is — and I think that it is fundamental to the argument—that, whatever the special demands of assisted areas, one must bear in mind that the expenditure must be at the expense of something else, unless money is to be printed. It can come from hospitals, schools or other welfare expenditure, but it can also come at the expense of other jobs.
Firms in the hon. Lady's constituency will be saying that we must allow more resources to be available to the private sector, that we must get our public expenditure down and that we must cut interest rates. One of the reasons why we have not been able to cut interest rates has been the level of Government expenditure. The demand for more expenditure on regional policy or for other purposes puts jobs in other companies at risk. Therefore, those who ask for special assistance must consider the impact it will have on the rest of industry.
We believe that regional differences will not be reduced simply by subsidising industry. I am sure that no company or individual employee in the hon. Lady's constituency wants to be in the position of depending on taxpayers' charity. The prosperity of any company or area depends in the end on its ability to compete, to make products that the customer wants to buy at the right price and at the right time. That is the ultimate test.
When we carried out our review, we decided to maintain the three-tier structure of categories of assisted areas. We decided that there should be not an abrupt change but a phasing out over a period, to reduce the 45 per cent. of the population covered by assisted area status to 25 per cent., to make it more effective and more selective. We also decided to take other policy steps, with which the hon. Lady and her hon. Friends will be familiar.
§ Mrs. Ann TaylorThe Minister said that his Department was conducting a review, and he referred to the original announcement of the change of policy. His Government made the decision two months after being elected. It was impossible for them fully to review the position in so short a time. I presume that that is one of the reasons why the Secretary of State said that before the plans for removal of assisted area status were finalised there would be a further review. Will the hon. Gentleman say something about that further review?
§ Mr. ButlerYes, I shall, because the hon. Lady put special emphasis upon it. It is correct that my right hon. Friend the Secretary of State said not that there would be a continuous review of all areas but that he would consider cases that were presented to him. He said that he would, to use the hon Lady's words, keep an open mind and, if certain areas seemed to justify a change of the policy he had announced, that he would be prepared to reconsider.
689 There have been a number of representations to the Department both of the sort we have heard tonight and directly from a number of areas. It was inevitable that when unemployment increased at the rate we have witnessed certain areas would ask to be reconsidered. I have listened carefully to the hon. Lady. I have considered the position in Bolton and its travel-to-work area. I cannot, I regret, find that the relative position of Bolton has changed so as to justify an alteration in the decision taken last summer.
That brings me to the argument that if regional policy is to mean anything it must be more selective. The hon. Lady will agree, knowing Bolton as she does, that while unemployment there has risen severely, the position in other places such as Liverpool, which has an unemployment rate of 15 per cent. or more, justifies their receiving more aid than the other parts of the country. I hope that the hon. Lady will accept that the Government have a responsibility to other sectors of the economy and that if we respond to the requests for the sort of aid that she has been making it will have be at the expense possibly of firms in her area.
We are trying to provide general help, first in regard to the severe social problems that emanate from unemployment. In spite of stringencies in other directions, we have decided on a range of measures to help in this area. I am glad to be able to put special emphasis on the youth opportunities programme. We have also been able to relax to some extent the interest rates that have borne so heavily on the firms in the hon. Lady's area.
690 The textile industry has dominated Bolton over the years and it still plays an important part in the life of the area. We have taken action to ensure that the multi-fibre arrangement operates to the best advantage. We shall work towards a successor to that arrangement that is just as tough. We are, therefore, trying to help that industry.
In addition, the metropolitan borough of Bolton is designated as a programme authority under the Inner Urban Areas Act 1978. It has special powers to assist industry. There is also the problem of land dereliction, and in that respect, although the assisted area status will be lost, Bolton and other parts of the North-West will retain eligibility for 100 per cent, grants for approved schemes of land reclamation. There is a particular development where that approach seems to be appropriate. One will look to Bolton to provide an added attraction to industry in consequence of the land reclamation that is happening and will continue to take place with the help of Government grants.
§ Mr. StottI have some sympathy with the Minister, because during my time it was recognised at the Department of Industry that there was a problem about the way in which money was spent on industrial grants and about designating areas for special development or intermediate area status. However, in the current climate the Government have exported our unemployment—
§ The question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at twenty-six minutes past Twelve o'clock.