HC Deb 16 April 1981 vol 3 cc436-43

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

10.39 am
Mr. Joseph Dean (Leeds, West)

I believe that this debate on the effects of unemployment in Leeds is extremely relevant. Certainly, bearing in mind the questions that were put to the Home Secretary in the absence of the Prime Minister by Members of the Opposition, it can be said that what is happening in Leeds today is mirrored in almost every other major city in the United Kingdom and the conurbations in which the majority of our people reside. I am delighted to have obtained this debate, because this is the most acute and depressingly dangerous problem facing that great city and its residents at this time and for the foreseeable future.

Leeds is the second largest city outside London. Its population of more than 750,000 represents almost half the population of the metropolitan county of West Yorkshire. Historically, the city's prosperity has been based on a diversity of industries and commerce, with perhaps the main industrial emphasis placed on engineering, textiles and clothing manufacture. During the debate I hone to highlight what has happened to that industrial base during the past two years under the Tory Government.

I should point out that I am speaking about a wider area than the city of Leeds, because the figures that I shall quote relate to the Leeds travel-to-work area. The people from that wider area who man the industries to which I have referred have traditionally been hard working and moderate in their wage claims. They have one of the best industrial records in the country. Therefore, no one can claim that the rapid increase in unemployment there is either due to their own actions or in any way self-inflicted.

To illustrate the problem, I shall quote the figures for the Leeds travel-to-work area during the past two years. In March 1979, the total of unemployed, both male and female, was 17,551, or 6.4 per cent. of the working population. At that time the percentage figure was slightly better than the national average. Since then the situation has deteriorated alarmingly in what was once a reasonably prosperous area. On 12 March this year unemployment stood at 33,575, or 12.1 per cent. That means that in the city of Leeds and the surrounding areas unemployment has more or less doubled.

It is no use Ministers or the Government falling back on the stock answer that they are not responsible for what has happened during the past two years. I am well aware that the Government inherited an unemployment level of 1½ million, but the rise over the past two years has been the fastest in history. It is no good the Government's saying that they are not responsible for what has happened. They must bear a large responsibility for the situation that their policies have created. Indeed, the situation will continue to deteriorate unless there is a drastic change in those policies. High interest rates and the lack of a firm imports policy have played a major role in creating the problems in Leeds and the surrounding areas.

Although the recent reduction in MLR is welcome, it is by no means large enough to make a substantial impact. Increased energy costs and the Chancellor's recent announcement about increases in the price of petrol and derv will only have a worse effect, as it is well known that, compared with our overseas competitors, including those in the EEC, British industry suffers more severely because of energy charges.

On 11 July last year the Yorkshire Evening Post reported a debate that took place in the House in which I stated what was happening in Leeds. The acceleration of the problem has since been much greater than anyone expected. During that debate, on the Government's industrial policies, I asked certain questions of the Secretary of State. For example, I asked why there was an increase in job provision in the Conservative areas of the country compared with job losses in traditional Labour areas. That was not the first time that I had asked that question. I had asked it previously of the "Secretary of State for Unemployment". No answer was forthcoming until the House debated the engineering industry in December, when the then Minister at the Department of Industry, the hon. Member for Basingstoke (Mr. Mitchell), admitted that jobs had been lost in areas such as Leeds because of deliberate Government policy.

I cannot understand why I had to wait such a long time for an answer. It was beyond belief when I heard the Minister say that a company in my constituency had moved to Cornwall which was regarded as a better area because of the status granted by the Government, especially when we consider what has happened there since.

The three industries which I highlighted earlier have suffered most severely. Engineering—the industry to which I belonged—has seen a massive reduction in jobs. It is the largest employing industry in the manufacturing sector, yet over the last decade the number of apprenticeships has halved. In other words, when the so-called upturn in the economy takes place we shall not have a sufficient number of apprentices to become skilled men. That is the size of the tragedy.

The largest acceleration in the loss of apprenticeships has occurred during the last two years. I am secretary of the AUEW engineering group of Members of Parliament. We have met many times and discussed the possibility of approaching Ministers in order to prevent the closure of engineering industries, of which there has been a surfeit in the Leeds area.

Textile and clothing manufacturers, on which Leeds primarily made its name, have suffered the most savage job losses of all. Most of the industries in Leeds, which were household names, have disappeared from the face of the earth and I doubt whether they will ever return.

Mr. K. J. Woolmer (Batley and Morley)

Does my hon. Friend agree that the problems in the textile and clothing industries affect not only the main city of Leeds but also the outlying textile towns such as Batley and Morley? Is he aware that unemployment in Morley has increased by 167 per cent. since the Government came into office and that 27 people are now chasing every vacancy? In fact, the situation is even worse in Batley where 66 unemployed people chase every vacancy. Does he agree that the massive demonstration of textile workers in Bradford last week reflects their genuine fear because they are baffled by the fact that their own moderation over the years has now been rewarded by the destruction of their industry?

Mr. Dean

My hon. Friend the Member for Batley and Morley (Mr. Woolmer) is correct. The people of that area are fortunate to have a Member of Parliament who has shown such a close interest in that industry. His knowledge about it is probably second to none.

A few weeks ago, a lobby came to the House, composed mainly of women, to protest at the loss of textile jobs and the way in which the industry in Yorkshire has been savaged. Those people could not understand why their industry had received nothing like the assistance given to other major industries to enable them to stay afloat until better times came. These industries are interdependent, but in the steel or mining industry the muscle is there to get funding from taxpayers' money—and quite rightly.

Mr. Stanley Cohen (Leeds, South-East)

My lion. Friend and I both represent Leeds constituencies. He will be aware that 2,000 jobs per month are disappearing from the wool and textile industry. Having visited Taiwan, I know why. Can my hon. Friend deal with import duties? The Taiwanese export to us and pay an import duty of only 6¾ per cent., but our exports to them are 100 per cent. dutiable, which makes our effective and efficient industry wholly uncompetitive.

Mr. Dean

My hon. Friend is correct. We play the game over international agreements, which is perhaps a good thing. I learnt this morning that the Japanese have been cooking the books over exports of manufactured goods. I ask the Government, as I asked the Labour Government, to be more assiduous and forceful to ensure that import controls are rigidly adhered to. Where we need to save an industry on which our prosperity depends, they should even consider banning the import of certain commodities.

The catalogue of industrial contraction is sad and shocking. Unemployment is a tragedy for everyone involved. Our youths and school leavers provide the seed corn for the future. In March 1980 in the Leeds travel-to-work area 199 school leavers under the age of 18 could not obtain work. In March 1981, the figure was 684, an increase of over 300 per cent. For young people between the ages of 18 and 20 the figure in 1980 was 2,627 and is now 5,297, an increase of 100 per cent. The last set of figures is only an accurate estimate because of the civil servants' industrial action. It is a tragic waste. I trained to be an engineer at 14 years of age and helped to produce marketable goods until I came to the House.

The Government's policy will not help to solve the problem. With so many youngsters unemployed and the situation getting worse, the tragedy in Brixton may occur elsewhere. The nation and certainly the Government have a lot to answer for. Last week in the debate on youth unemployment the Minister blandly said that the predictions were that four in five school leavers would get jobs. That sounds all right until we realise that one in five is 20 per cent. The Government believe that 20 per cent. unemployment for school leavers is acceptable. I welcome the youth opportunities programme, but it is only a palliative and a substitute for real jobs.

I have spoken of the youths in my area. When I finish canvassing for the local elections I call occasionally into clubs. More and more people of 50 years of age and upwards tell me "I have finished work, Joe. I have been made unemployed." Those men will be on the dole for the remainder of their lives. What sort of society are we becoming if we accept that? There is little opportunity for people in the middle age range to get jobs. The enormity of the tragedy affects everyone from school leavers to people who are about to retire.

Two politicians who should be grateful to the people of Leeds are playing an unacceptable role in the tragedy facing the city. The first is the Secretary of State for Industry. I have written to the right hon. Gentleman and told him that I should be mentioning him. It is unfortunate that pressure of business has kept him away from the Chamber. He has severely damaged Leeds's prosperity. In 1982 Leeds will lose its assisted area status, which is a scandal. Politicians of both major parties in West Yorkshire have pleaded with him to reverse his decision. There is time to reconsider. I hope that he will think of the people he represents.

The second politician is the noble Lord Bellwin, a former Conservative leader of the Leeds city council. He is now an Under-Secretary of State in the Department of the Environment. He has meekly acquiesced in Leeds's rate support grant being reduced by 4½ per cent. so that the Conservative shire counties may receive increased allocations. The reduction has forced the local authority to shed labour. Perhaps the enormity of the tragedy can be seen when I say that between 20 and 30 school teachers have been made redundant. There could be no greater waste of talent and damage to our future.

The Government should take immediate action to reverse the desperate situation in Leeds—and it is not only in Leeds; it is a national problem. They should urgently introduce a further substantial cut in the minimum lending rate and make use of the North Sea oil revenues. The cut in the MLR is called for by all sections of industry, including the CBI. North Sea oil revenues should be used immediately to introduce a crash programme in the public sector to include building council houses and re-equipping and modernising our manufacturing industries to allow them to compete more favourably with foreign competitors.

The quickest and best investment would be a substantial increase in council house building. The waiting list in Leeds is over 30,000, yet the Goverment are instructing local authorities to sell houses, increasing it even further. A quick way of getting people off the dole queues and into work is to establish a substantial building programme that includes the modernisation of council houses. That is also one of the quickest and best ways of creating productive apprenticeships.

Time will not be on our side unless drastic action is taken. The deterioration of the industrial base of Leeds and of the nation will continue. In some areas that base is being damaged almost beyond repair. It will not reappear and that will be to the detriment of our nation. Some people may judge the happenings in Brixton as an oddity. I hope that they are, because they do not achieve an end.

The people of Leeds represent one of the most stable, orderly and law-abiding communities in Britain. The pressures imposed on them could easily have an adverse effect before long. We boast about our education system and we are proud that youngsters leave school with more and better qualifications than five years or a decade ago. What future are we providing for them? We are giving them the opportunity to go straight to the dole queues. Given the way in which basic industries have been mauled and damaged, I cannot see an end to the dole queues. I cannot see any hope of improvement unless there is a drastic reversal of the Government's policies and unless they take note of those in industry.

11.1 am

The Under-Secretary of State for Employment (Mr. Peter Morrison)

I am delighted to reply to the prints raised by the hon. Member for Leeds, West (Mr. Dean). I am also delighted that he was lucky enough to be able to initiate this Adjournment debate. I have always been a keen supporter of Leeds. Obviously, I do not know the city as well as the hon. Gentleman, but whenever I have been there extremely generous hospitality has been accorded to me. I have always received a very friendly reception.

As the hon. Gentleman said, it is an illustrious city not only in its make-up but in its representation in the House. I am delighted that the right hon. Member for Leeds, South (Mr. Rees) is in the Chamber. As the hon. Gentleman reminded us, my right hon. Friend the Secretary of State for Industry represents a Leeds constituency. The Deputy Leader of the Opposition also represents a Leeds constituency, as does the hon. Member for Leeds, South-East (Mr. Cohen). That demonstrates to the citizens of that city that their views are well represented in the House.

I have no doubt that the hon. Gentleman was correct when he said that the citizens of Leeds were hardworking, industrious and moderate. No doubt that is why it is such a great city of the North. In his thoughtful speech, the hon. Gentleman made clear the anxiety that he feels about the problems that the recession has brought to the Leeds area. Although unemployment in the Leeds travel-to-work area is running at below the national average, I fully recognise that the position has deteriorated markedly since last year.

The problems facing the textile industry are felt deeply in West Yorkshire. The Government in no way wish to minimise the real hardships—both social and economic—which unemployment has brought to Leeds. We have never sought to disguise the severity of the present unemployment situation; nor have we made any secret of the fact that unemployment may get worse before it gets better. However, I am sure that Opposition Members will agree that we must not forget that the economic situation today is not the economic situation of, say, five years ago. We are in the midst of one of the worst periods of economic recession that the country has known. That has had effects not only on the traditional areas of high unemployment but also on those areas that would normally expect to escape the worst of any slump. Leeds, like many other areas, finds itself facing relatively new problems.

Unemployment is like a cancer which eats away at all it touches. It affects not only those who are out of work, but their families and friends and, perhaps hardest of all, their children. Understandably, the hon. Gentleman referred to men in their late forties and early fifties who found themselves in personal difficulties. Thanks to the recession, they have lost their jobs and wonder what to look forward to. I sympathise with them.

However, there are signs that the economy may at least be on the upturn. No doubt the hon. Gentleman will agree that inflation is falling. We are seeing more moderate pay settlements. In the last six months of 1980, the number of strikes was the lowest since the war and the number of days lost was the lowest since 1966. The hon. Gentleman asked for a reduction in the minimum lending rate. I hope that he will agree that a reduction per se would not necessarily solve the problem.

In my view and that of my right hon. and learned Friend the Chancellor of the Exchequer, a reduction in the minimum lending rate would exacerbate the problem. Were it to be reduced, it would prove impossible to fund the public sector borrowing requirement. That would involve the printing of money, which in turn would involve a higher rate of inflation, which in its turn would involve a greater number of lost jobs.

Just as I know from my constituency of Chester, the hon. Gentleman will know that firms are finding new markets and are making themselves more competitive both at home and overseas. All is not doom and gloom. For example, in the Leeds area there are a number of signs that firms are showing confidence in the future. I am told that Systime Ltd. hopes to build a £13 million factory in Leeds which may create up to 1,000 jobs by 1984.

Mr. Barry Henderson (Fife, East)

Is not my hon. Friend encouraged by the fact that a substantial investment has recently been taken in Systime Ltd. by a group of Edinburgh finance houses, which has been particularly successful in spotting winners in this type of advanced technology?

Mr. Morrison

If that is the case, I am encouraged.

Tudor Vehicles Imports (UK) Ltd. of Morley is expanding and hopes to create 400 new jobs over the next three years. Garanor Ltd. of Rothwell is setting up a freight complex, which could lead to the creation of 1,000 jobs.

The hon. Gentleman referred to the role that local authorities can play. I understand that Leeds city council is taking on 50 apprentices this year, which is double its normal intake. The authority is also spending £2 million on setting up a science park for microtechnology firms, which could bring 1,000 jobs to the city. Another example of local initiative can be seen in the Leeds business venture, which was recently established by the Leeds chamber of commerce to provide assistance to people wishing to set up in business and to advise existing firms. To date, I understand that the venture has had about 115 inquiries, which have led to 20 new firms being set up. In addition, help and advice have been given to over 50 existing firms.

Those are all optimistic signs. After all, companies are run by business men who are unlikely to invest money if there is to be no tomorrow. Like the rest of the country, Leeds has a future and many in the area will benefit from the confidence shown by the companies that I have mentioned. No doubt there are many other such companies.

The Government have a role to play and we are doing all we can to encourage firms to expand in the Leeds area. Since the general election in May 1979, Government financial assistence worth £2.2 million has been offered under section 7 of the Industry Act for 41 projects in the Leeds travel-to-work area, involving a total estimated investment of nearly £34 million. The estimated number of jobs associated with those projects was almost 3,000. During the same period, £1.7 million was offered under section 8 of the Industry Act for 95 projects, involving a total estimated investment of £10 million.

However, ultimately a fall in the level of unemployment in Leeds depends primarily not on the amount of regional assistance that the area receives but on the vitality and competitiveness of industry and commerce in Leeds and on the degree of co-operation between managements and work forces. As the hon. Gentleman rightly said we need to tackle the root causes of higher unemployment. The main cause—the hon. Gentleman does not necessarily agree with me on this—is the current recession. It is outside our control. I hope that we shall agree that it is a world recession and not just a United Kingdom recession.

We also have to consider the public expenditure implications of the previous Labour Government. I do not mean to make a great political point here, but, if public expenditure were allowed to get wholly out of control, we should be back in the same old downward whirl that we have experienced for so long in this country. At the last general election we made clear our intention to control public spending, and we are sticking to it.

In a period of world recession, the Government's role in a national recovery can be likened to that of a member of a team. We cannot do it on our own. It will involve industry, trade unions, commerce, and all areas of the economy which have helped us to thrive in the past and will help us to thrive in the future, particularly in a great city such as Leeds.

As the chief Opposition spokesman on employment, the right hon. Member for Chesterfield (Mr. Varley), said in 1978, we need if we are to remain competitive and increase our share of world markets, increased production and higher productivity. The result will be more jobs and greater prosperity". The right hon. Gentleman put it better than I could put it. We must produce what people want. It is no use producing goods that people do not want to buy. It has to be done up to the standard that people require and at the price that they are prepared to pay. If we meet those criteria, the customers will come back.

The Government cannot be expected to wave a magic wand and overnight solve the problems of Leeds or anywhere else, as some Opposition Members seem to think, although I would not suggest for a moment that the hon. Gentleman put the matter in that way. What the Governmen can do, and what we are seeking to do, is to create the conditions which will enable United Kingdom firms, including those in the Leeds area, to compete successfully in world markets and thus create a genuine demand for labour. That is the only way in which to improve employment prospects, and that is why there is no alternative to our policy and no easy way out.

I hope that local authorities, whether in Leeds, Chester or anywhere else, are aware that, if they increase rates substantially the likelihood of new industry coming into their areas is thereby diminished" as compared with other areas.

Mr. Joseph Dean

I ought to make the Minister aware that Leeds is probably one of the lowest rated of the big cities.

Mr. Morrison

I am most grateful for that helpful intervention on behalf of Leeds, but rates have to be borne in mind by any potential industrial investor, and councils in turn must be aware of the effect on jobs if rates are increased substantially.

Mr. Woolmer

Is the Minister aware that to the tens of thousands of unemployed people and people on short time working, and to the managers of factories that stand half idle, many of his words, however nicely put, will sound very complacent? What is his answer to the Leeds chamber of commerce and industry, which has called on the Government to reflate? What is his answer to the CBI, which says that, unless something is done about the exchange rate, our manufacturing industries cannot be competitive?

Mr. Morrison

As I said earlier, I do not believe that reflation is the right way to tackle the problem, because it would create inflation, which in turn would mean fewer jobs. Perhaps the hon. Gentleman saw the front page of the Financial Times this morning where it was stated that the CBI is now taking a somewhat different line from the one taken by it a week or two ago.

I do not wish to sound complacent because I am not complacent. I am very concerned about those without jobs, and in particular the young. The youth opportunities programme—this is where the Government have shown themselves to be a caring Government—has been particularly successful in the Leeds area.

Since April 1980, almost 4,600 young people have entered the schemes. The stock of approved places is currently 3,200, of which almost 2,400 are occupied. It is hoped that the Easter guarantee will be met and that everyone eligible and suitable for a youth opportunities programme place in Leeds will be offered one. The fact that the guarantee should be met is largely attributable to the overwhelming response from voluntary organisations as well as the public and private sectors, combined with the help of the local careers service.

We must not forget the important role of training—the hon. Gentleman mentioned it in his speech—in improving individual employment prospects. Leeds is particularly well served in this respect, with skillcentres at Leeds, Bradford and Wakefield, and in having a large number of colleges and employers' establishments where skills can be acquired. In 1981–82, the Leeds-Bradford office of the Manpower Services Commission's training services division aimed to offer places to 2,360 adults and to make available 2,500 opportunities to young people.

The Government are doing all they can to help. The position in Leeds is linked indissolubly with that in the rest of the country. The enemy is inflation, which destroys jobs and creates unemployment.

As the right hon. Member for Cardiff, South-East (Mr. Callaghan) said when he was Prime Minister in 1978, Keep inflation down, reduce unemployment further, export more, improve our productivity. These will remain our main tasks". These are our priorities, too, and the signs are that we are on the way to achieving them. We must not be diverted from this course.