HC Deb 26 February 1981 vol 999 cc1029-67

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

7.14 pm
Mr. John Grant (Islington, Central)

It is somewhat unusual, I know, for the House to debate the economic and unemployment situation in the South-West. It last did so in 1977. It is without precedent for the House to debate unemployment in the South. The affluent South, as it was once known, is now suffering severely from the same economic situation that affects the rest of the country. I do not pretend that the South, even with the inclusion of the South-West, is in the dire economic position of the worst hit parts of the country. All things, however, are relative. We are talking of a grave and fast deteriorating situation which should be fully exposed in this debate.

I do not want to take too long in my remarks. I recognise that there are many hon. Members who wish to make constituency points. Although this is an Opposition Supply day, we can thank the Prime Minister and the Government for this debate. The Prime Minister's policies have spread the misery of grievously high unemployment so that no area of the country can escape its tragic consequences. The fortunes of any region are inevitably dependent largely on national trends.

At the moment, we are slap in the middle of the worst recession since the 1930s. The fall in output last year was the biggest since those grim years. The trend is continuing unabated. Only last week the Confederation of British Industry warned that no one should think that there is an upturn round the corner. Even the Institute of Directors is saying that the Government's economic policies are in a shambles. I believe that even the Minister of State, who, I understand, is to follow me in the debate, has been forced to become a wet alongside the Secretary of State for Employment. I suspect that he is probably dripping with chagrin.

The output of manufacturing industry last year fell by 13½ per cent., and industry was reducing stocks at an unprecedented rate. Investment by manufacturing industry was 7 per cent. down in the second half of the year. We are talking of an appalling mess. When we discuss unemployment, a nightmare turns into a full scale horror story.

During the debate on the Redundancy Fund Bill last week, I drew attention to the staggering financial cost to the nation of unemployment. The Secretary of State for Employment played a little with the figures, but nothing that he said refutes the fact that the Government are needlessly paying people not to work instead of helping to create employment and jobs. They are pursuing the economic theories of the madhouse. Only industrial brute strength frightens them into listening to reason. That is the meaning of the pragmatic interventionism of the last few days in the coal mining industry and in the water industry.

The unemployment figure nationally is 2,463,000—or 10.2 per cent.—a rise of 974,000 in a year. It is a damning indictment of Government policy. I should like to examine the situation regionally. In the South-East region, excluding Greater London, unemployment went up by 59 per cent. between October 1979 and October 1980 compared with a national rise of 51 per cent. The figure since that time has steadily increased. There are almost 300,000 people out of work in the region. Vacancies number only about 16,000 and have dropped appreciably this month. People tend to forget that the South-East is this country's largest manufacturing centre. If its prosperity falls away, it can only be the hallmark of national decline.

In the South-West, there are almost 155,000 people out of work—9.3 per cent. There are only 6,500 vacancies. There are 24 people chasing every vacancy, which, measured in those terms, represents as bad a situation as exists in Scotland. In 1980, unemployment in the South-West was up by more than 50 per cent.

A debate of this sort will obviously cover contrasting ground. Employment conditions are different in Cornwall and Devon from those in Bristol or those in the Home Counties. Hon. Members will be making their own constituency points. Their speeches, I am sure, will reflect the extraordinarly diverse nature of industrial development that we are considering. Whether we are talking of major factory closures in Hertfordshire, Kent or Essex, of the effect on office jobs, which make up 40 per cent. of employment in the South-East, or on the hundreds of small engineering and printing firms that have gone bust or are deep in trouble, of building and construction, which is regarded as crucial in the South-West, of the contraction of work in the great ports of Portsmouth, Southampton or Bristol, or of agriculture and tourism, wherever we look, the picture is equally grim.

There are large pockets of unemployment in the South and South-West that well match many of the problems further north. Some places, specially in Devon and Cornwall, have jobless rates of two or three times the national average. In those areas the smaller firms in the private sector tend to be the hardest hit. Many of the workers in these firms who are thrown on the scrap-heap are less well provided for. They do not have the special payments and treatment provided when there are large-scale redundancies in parts of the public sector. For a Government who were supposedly dedicated to helping small firms, particularly the self-employed, their record is nothing short of an unmitigated disaster.

Earlier I mentioned the 1977 debate on the South-West. I have re-read what some right hon. and hon. Gentlemen, who were then in opposition, said. They were calling the unemployment position in that area "unacceptable" and "disgraceful". I wonder what they will call it tonight when over 1 million more are out of work. At that time they demanded remedial measures. The Labour Government introduced a good many remedial measures. I am thinking especially of the special employment measures which were sneered at by the then Opposition. They spoke then about the need for "real jobs". That was a favourite phrase.

Now the Government are being forced to expand those remedial measures—for the most part inadequately. Unemployment fell steadily during the latter days of the Labour Government. It went down month by month in the South and the South-West as it did in the rest of the country. At that time inflation, too, was going down. At that time we were not using unemployment as a weapon, and the figures prove it.

One subject to which I draw the attention of the Minister of State is the Youth Aid report published yesterday about the youth opportunities programme. That applies to many young people in the areas we are debating. The report warns starkly that the youth opportunities programme faces the danger of breakdown if it is enlarged to cope with the increased numbers of young unemployed without offering the right quality of education and training. I do not have time to go into the details of that report. I am not attacking the increased spending on the youth opportunities programme, but I ask the Secretary of State to consider carefully the message contained in the report and to take it seriously.

I looked at the report of what the right hon. Member for Taunton (Mr. du Cann) said in 1977. He called for a great public works programme to build roads and hospitals. I hope he will repeat his call tonight. If such works were needed then, they would be a godsend to such areas now. I hope to see the right hon. Gentleman and all his hon. Friends joining the queue outside No. 10. I understand that the Prime Minister said that she would see any Members who had major redundancy problems in their localities. If they queued up outside No. 10, they would be a rather more honest assembly than the Saatchi and Saatchi rent-a-crowd queue that we saw in the infamous pre-election dole queue poster.

The way to revive the flagging economy of the South and South-West and to get people back to work must be for the Government to change course but primarily to eject a Government who by any standards are dragging the nation deeper and deeper into a morass.

The Secretary of State for Employment—I am sorry he has had to leave—said in Eastbourne recently that it was all very well in the South-East of England, the relatively prosperous South-East, the pretty smug South-East, to be patronising about the North and the North-East but by God if you live there it is tough, it is hard. If we talk about a united nation, one nation, do not let it just be words, let us try to understand the problems they face in places like Sunderland. I agree with the right hon. Gentleman entirely, but he was talking to that smug, self-satisfied Young Conservatives audience—the same people who gave the Prime Minister a standing ovation not long before.

A week before that speech I was in Eastbourne speaking at a public meeting on unemployment. I had with me on the platform a representative of the local unemployed workers' organisation. There was nothing smug about that meeting. It is a sign of the times that one can be invited to speak at meetings on unemployment in such places as Eastbourne.

The Secretary of State should face the facts. The policies of his Government, especially those of the Prime Minister, have succeeded in achieving the one nation of which they speak, because there is nowhere else for the unemployed to go. Labour mobility—something else that the Prime Minister was fond of talking about—is now a very sick joke. The Government have united the nation, including the South and the South-West, in economic misery. We are suffering a level of unemployment that is a scandal in a civilised society.

I quote the Prime Minister's words in 1977. It is not the first time that the House will have heard this comment. I have no doubt that we shall hear it again form time to time. She said: Sometimes I've heard it said that Conservatives have been associated with unemployment. That's absolutely wrong. We'd have been drummed out of office if we'd had this level of unemployment". That was at a time when there were 1 million fewer unemployed than there are today. The Prime Minister is condemned out of her own mouth.

Only last week the Secretary of State for Employment made what I thought was an amazing U-turn. He publicly recorded what he called his unstinted admiration for the Prime Minister. I do not think that added to his public credibility. If he can find even an echo of that unbelievable sentiment among the 2½ million people now unemployed, especially among those in the South and South-West, he will deserve a medal. What he really deserves is the sack, along with the rest of the Government.

7.26 pm
The Minister of State, Department of Industry (Mr. Norman Tebbit)

I thought that it came oddly from the hon. Member for Islington, Central (Mr. Grant) to remind us of hon. Members who have said that the level of unemployment was unacceptable. He remembers, as well as I do, that time after time the right hon. Gentleman who is now the Leader of some of the Opposition-gradually, day by day, they desert him, two, three, four, five; is it a gang of 11, 15, 30 these days?—came to the Dispatch Box, wrung his hands and said "The level of unemployment is unacceptable". That is one of those things that Secretaries of State, faced with such difficulties, very often say.

Mr. John Grant

There is only 1 million in it.

Mr. Tebbit

There may only be 1 million in it, but the hon. Gentleman forgets that when the right hon. Gentleman came into office he inherited a level of unemployment of about 600,000. He more than doubled that level of unemployment. It does not do for the hon. Member for Islington, Central to shed tears over the unemployment level when he knows that the record of his Government was quite disgraceful.

Then, when the hon. Gentleman takes some credit for the fact that unemployment was falling in the last days of that Government, he has a sauce He knows why unemployment was falling then. It was falling because, first, the economy had been turned round from the disaster when his right hon. Friend the then Chancellor of the Exchequer came running back from Heathrow and called for the International Monetary Fund to bail him out. He had taken that measure with all the expenditure cuts that were involved. Secondly, even the former Prime Minister was able to muster just enough vision of the future to see that a general election was coming, although he did not even control the date of it. Having seen that it was coming, he stoked up the fires of future inflation by Government spending, in one programme after another, leaving us to clear up the mess that we inherited.

I agree with the hon. Member for Islington, Central on one thing—that it is unusual for the House to discuss problems in the South and the South-West of Britain. As a Southerner myself. I find that perfectly welcome.

The House hears often enough about the obvious widespread problems in traditional manufacturing areas. It is important to recollect why those problems are so much worse in the old manufacturing areas. It is because past resistance to change prevented the solution of industrial problems when they were still sufficiently small to be easily handled.

Now, as always happens when the dam bursts—and it always bursts when it is built up to try to stop progress—we get a flood of problems. They are problems that have submerged many firms and threatened whole industries. The South and the South-West, in contrast, have not suffered to anything like the same extent, because they have never had the same rigidities of structure that have so damaged the North of England and the Lowlands of Scotland.

No one would deny that we have our problems in the South, and in the South-West in particular. In London the local economy is usually very overheated. Even today, although the hon. Gentleman says that there are no jobs, the evening newspapers show that there are jobs aplenty being offered in a way that can only evoke envy among less fortunate, unemployed workers in the other regions of the country.

Mr. John Grant

I did not say that there were no jobs. I pointed to the ratio between unemployment and the vacancies. If it is said that many people do not register their vacancies, it is equally true to say that many people do not register for unemployment.

Mr. Tebbit

I do not think that anyone has suggested that the ratios are anywhere near the same. They are nowhere near the same. The hon. Gentleman has only to look at the evening papers around London to know that that is true. Many skills are still in short supply in the South and South-East. All too often the poor levels of educational qualifications damage the chance of youngsters, especially in inner London, of finding employment. High commercial and industrial rents, expensive transport, and high rates—I emphasise high rates to the hon. Gentleman, remembering which borough he represents in London—together with traffic congestion, and the prospect of regional grants elsewhere, tend to drive or lure manufacturing away from the South and the South-East, and particularly away from the capital.

To some degree the same problems exist in other parts of the South. Despite the availability elsewhere of regional aids, however, new towns such as Crawley, Hemel Hempstead, Harlow and Basildon—and growing centres such as Reading and the areas that are prominent in the electronics industry all along the Thames Valley—remain attractive to industry. There are abounding instances of successes scored at home and abroad by companies in those areas.

Mr. Stanley Newens (Harlow)

Does the hon. Gentleman agree that even in new towns such as Harlow, which he previously represented, many firms are being driven out and are under very great pressure? Many people are becoming unemployed there because of the policies of the hon. Gentleman's Government. Will he say something about the effects of high interest rates, about the present overvaluation of the pound, and about many other issues that undoubtedly are producing unemployment in the South-East, in precisely the areas to which he has referred?

Mr. Tebbit

I shall be willing to give way again to the hon. Gentleman if he wants to welcome, for example, some of the new firms that are coming to Harlow and increasing employment opportunities, such as Merck Sharp and Dohme, the pharmaceutical company. I am sure that the hon. Gentleman, who is a very fair-minded man, would want to make that point in order to get the record straight.

Sometimes the projects that we are talking about are run-of-the-mill projects, but sometimes—indeed, very often in the South—they are well up in the forefront of technology. I have in mind such firms as Redifon, of Crawley, and its rivals in flight and other simulation, Link Miles at Shoreham—world leaders and well capable of taking on competition from anywhere in the world, despite the high level of the pound and despite high interest rates and all the other problems of which hon. Members are so aware.

Mr. Stephen Ross (Isle of Wight)

The Minister has great knowledge of the aircraft industry. He may agree that the Isle of Wight is a very good place to be for those in the civil aviation and light aircraft industry; indeed, it is probably the home of the industry now. But he must be aware that, in spite of the fact that we have very modern industry on the Isle of Wight, we have 10½ per cent. unemployment. The unemployment figure in Ventnor is 20 per cent. That is not the fault of the people there. Firms such as Ronson are closing down, due largely to the high interest rates and the overvalued pound.

Mr. Tebbit

I shall not duck these points. I prefer to come to them in my own time.

It is perfectly easy to turn to the South-West and to assume that it is still all tourism, agriculture and fishing, but that is very far from the case. When we talk about the South-West, it is wise to remember that Bristol and Severnside, and the industry there, present a very different picture from that in the far South-West of the country. Places such as Plymouth are different again, with the historical dependence on the Royal Naval dockyard.

I am not sure whether the hon. Member for Islington, Central is in favour of defence spending or against it. No doubt he is against it if it is defence spending and for it if it creates employment. But there are problems that are totally different from those of the traditional South-West—the rural and small towns of Cornwall and Devon.

It should be remembered that the distance from Bristol to London is hardly any greater than the distance from Bristol to Plymouth, and that it takes rather less time to get to London from Bristol than to get to Bristol from Plymouth. So the South-West region is one in which there are great differences between places, although we tend to talk about them in the same way.

Mr. Peter Emery (Honiton)

The Minister has wisely hit on the difficulties that exist. Will he say something about the pressures being brought by many hon. Members from Devon and Cornwall for the regional headquarters to be moved from Bristol to somewhere such as Taunton, Exeter or Plymouth? There are many places in the area that are further from Bristol than Bristol is from London. It really is nonsense to have the headquarters in Bristol.

Mr. Tebbit

I entirely understand my hon. Friend's point of view. It is one of the matters that we have to look at all the time. We have to consider whether these centres are in the best place. In the past, because most of the work has been in the Bristol and Severnside area, that is where the centre has been. It is because of the weight of population as well as the distance factor.

Mr. David Penhaligon (Truro)

The Government have just closed down the regional employment headquarters in Exeter, which is 100 miles from where I live, in order to concentrate the facilities on Bristol. That is exactly the sort of thing about which there is mutual complaint in the South-West.

Mr. Tebbit

It may well be that in the interests of the control of Government expenditure—which at least half the House has in mind—it is right to concentrate the facilities in the areas where most of the business is done, as opposed to meeting the other desirable criteria mentioned by hon. Members.

The unemployment rate in the South-West is now 9½1 per cent. That is the fourth lowest regional rate in the United Kingdom. None the less, we are aware that it conceals areas of acute local difficulties, as well as areas of considerable prosperity. The tourist business has a short seasonal peak and long winter troughs. It has had a hard fight to remain competitive against overseas holidays, but it has done remarkably well in recent times.

This is a debate about the regions, so it is right to refer to regional policy as such, and how it aims to assist areas such as the far South-West in coping with present problems. When we came to office in May 1979 we inherited a quite extraordinary regional policy. It had started back in the 1930s as a system for selectively aiding the most hard-pressed areas—Merseyside, the North-East, and South Wales. But it had been allowed to grow, until 40 per cent. of the working population of the country was in assisted areas.

The key to any regional aid policy is that it must be discriminatory. One could not hold with a system offering aid so widely spread that it redressed the disadvantages of the most needy areas. So, following a review of that policy we decided that we had to enhance the attractiveness of the worst-off areas—the special development areas—by increasing the differential between regional development grant paid there and in the development areas. We increased that differential from 2 per cent. to 7 per cent. We concluded that it would be possible to reduce over three years the coverage of regional policy to 25 per cent. of the country.

We are now in the second of the three phases of changes implementing that conclusion. We are on the way to a concentrated and more cost-effective policy aimed at the areas most in need of help. More help is being brought to the extreme areas of the South-West, the special development areas and the other assisted areas—relative to the rest of the country, which is what counts—than they received previously.

Mr. Tony Speller (Devon, North)

Does my hon. Friend agree that there is a certain illogicality in an exercise whereby the excellent city of Plymouth gains the benefit of development area status—an area with good roads, excellent rail services and some air traffic—whereas an area such as North Devon, which has none of those advantages, loses development area status?

Mr. Tebbit

It is always possible to put a case by deploying the favourable aspects—if that is the right word—of a particular area in its quest for special treatment. We have to take a balance of all the factors that are involved—unemployment levels, the question whether unemployment has been persistent, communications, and whether the area is cut off from other travel-to-work areas. Moreover, we keep the areas under review.

Regional policy is not only about grants; it includes infrastructure improvements. Much benefit has come from improved communications. For example, the Gloucester northern bypass will start this summer. That represents another £12½5 million of road building. I am glad, too, that the M5-Tiverton link—another £12½8 million of road building—will start at the end of the year. These are useful schemes of road development.

The other characteristic of the South, as opposed to the North, is that it is probably far more dependent than is the North upon employment in small firms, which nationally employ about 25 per cent of our work force. The SouthWest, without heavy or capital-intensive industry, is even more dependent on small firms than is the rest of the South.

We have set out to create conditions that are more favourable to small firms. Since his appointment in January my hon. Friend the Under-Secretary has been seeking new ways to build on the successes of his predecessor, who had become identified with the cause of small firms. In particular, he is interested in the work of COSIRA and the Development Commission, which have given much support to small firms, not only by offering advisory training and financial services but by factory building in the South-West. The hon. Member for Southampton, Itchen (Mr. Mitchell) seems to find something amusing or derisory in assisting firms with advisory and financial services, or with small factory building, but these matters are of considerable assistance to smaller firms in the South-West, apart from the general changes in the last Budget that benefited small firms in other ways.

Sir Frederic Bennett (Torbay)

I agree entirely with what my hon. Friend is saying about help for small firms. Does he accept that the present facilities are very limited in time—limited to about six months? He said that the South-West can no longer be dependent on fishing, agriculture and tourism. So additional help is needed to extend the periods of training to enable people to take jobs in small firms which at present are not there. I hope that either he or his hon. Friend will be able to comment on that matter.

Mr. Tebbit

I am sure that my hon. Friend will wish to say something about training of that sort because it is rather different from the work of COSIRA and the Development Commission.

I know that Opposition Members are specialists in gloom tonight, but there are a number of bright spots in that gloom. Let me give some of them: J. I. Case Limited, at Redruth—another 500 jobs over the next two to three years; Becton Dickinson, at Plymouth—another 340 jobs over the next two to three years; Marconi Avionics, at Bristol—850 jobs over the next two to three years; Lee Cooper, at Helston—220 jobs over the next two to three years; Intel, at Swindon—500 jobs over the next two to three years; Racal Milgo, at Swindon—another 500; Tectonic Electronics at Swindon—300 more.

In the Reading area, Digital Electronics is recruiting for another 700 to 1,000 new jobs; Ferranti Computer Systems—400 new jobs; Racal—300 new jobs; and Mitel Telecommunications—250 new jobs.

In Essex, to please the hon. Member for Harlow (Mr. Newens), there are 500 new jobs at Marconi Avionics, at Basildon and Rochester. I have mentioned Merck Sharp and Dohme and Trebor Mints, at Colchester—400 new jobs; and Gordon's Gin, at Basildon—150 new jobs. I know that the hon. Gentleman wants to recite all the bad news. I understand that he wants to tell us about the closures and to keep telling us that everything is bad, but I want, to impress upon him the fact that there is another side to the story.

The new jobs that are created in the hard times of a recession are jobs that are viable in the long term, whereas many of the jobs that have gone to the wall during the past few years—less in the South and South-West than in the rest of the country—are jobs that have been hanging on by the skin of their teeth for many years past. They are jobs that would have had to go before long if British industry was to become sufficiently competitive to live in the competitive world of exports, where it has to face the challenge of the Germans and the Japanese.

There is good news, too, in the broader view. The Government have set as their prime objective the reduction of the level of inflation. Inflation is coming down fast. The underlying level of inflation is probably well under 10 per cent. But the hon. Gentleman does not want to talk about inflation now, though a year ago that was all that he wanted to talk about. Opposition Members do not want to discuss good news. It reminds me of a broadcast that I heard on the BBC yesterday morning, when it appeared that a football team had won a match against another football team that had been losing a lot. The Opposition always refer not to somebody winning a match but to somebody else losing.

Miss Joan Lestor (Eton and Slough)

Will the hon. Gentleman give way?

Mr. Tebbit

No. I want to leave time for others to speak.

The balance of payments is now far more favourable than Opposition Members are willing to admit is possible. We are exporting £1 billion worth of goods a month despite all the problems. There is much better news of pay settlements generally in industry. Pay settlements in the engineering industry are reported to be well down to single figures. That must be good news for the future. Industrial relations are better in terms of days lost and strikes. The Opposition wanted to talk about that in the past.

All that has been achieved without the rigidities of statutory pay and price control. All that will ensure that as the recession eases British industry and commerce will be better equipped than before to take advantage of it and less likely to run back into the familiar cycle of high inflation and another round of high unemployment.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Before I call the first Back Bench speaker, I remind the House that 19 right hon. and hon. Gentlemen have indicated their wish to speak in this important debate.

7.52 pm
Mr. Arthur Palmer (Bristol, North East)

As usual, the Minister gave his party knockabout, at which he is always good. However, he then drifted into the realms of fantasy. I shall be, I hope, short, but many hon. Members from the South-West sit on the Government Benches, whereas only a few sit on the Opposition Benches. They are many; we are few.

I propose to keep my remarks practical and to confine them to the Bristol area. Bristol has a fair mix of industry and commerce. It contains some advanced industries. It is also a commercial city. In the past, in times of depression, one aspect has balanced the other and Bristol has not suffered as much as, say, the North or South Wales. I am not talking of course, about the far West. But the situation in Bristol today is different. Our unemployment figures are all too close to the national average.

The Minister spoke of gloom and suggested that we on the Labour Benches are merchants of gloom. Some gloomy Bristol people are probably closer to the Minister, politically, than we are. I received a memorandum from Mr. John West, the director and chief executive of the Engineering Employers' West of England Association. The Association's head office is in Bristol. The memorandum was sent to all hon. Members representing constituencies in the South-West. He stated: A few companies have been pushed so hard that they will never recover. Many more are having to close parts of their business with little hope that they will ever be able to start up again. A large proportion of our members have been shedding staff and/or working short-time. Many are reporting declining profits and some are eating into their financial reserves. Not since the War has there been such a picture of immense industrial change nor such worrying unemployment trends. I do not know anything about Mr. West's politics, but I guess that his members support the Conservative Party more than the Labour Party.

Business men seem to be torn now between their political allegiance and their practical experience. In spite of their theoretical principles at a general election, they are often now near to bankruptcy, and that concentrates their minds. They want cuts in public expenditure and reductions in the public sector borrowing requirement. At the same time, they praise those who maintain useful capital expenditure. Much capital expenditure these days is bound to emanate from the nationalised industries within the public sector. That is particularly true of firms in the Bristol area. I refer to the electricity, gas, nuclear energy and railway industries.

I do not blame firms for being confused, because clearly the Government are divided and confused. They do not know whether they are coming or going. Business men want both public expenditure to stimulate growth and public economies to keep down taxation. That is the impression that I gained also from a weekend ministerial television programme. So if the employers in Bristol are divided and confused, we should forgive them, for so are the Government.

But my present intention is not to go over the Government's general policy. I wish to make some short observations about the special difficulties of the Bristol area. Bristol is not a development area, and therefore receives no special assistance. It receives no encouragement from the Government to stimulate new industries. New industries often find fertile soil in the Bristol area, but the city receives no help from outside to provide additional stimulus.

Two bad decisions affecting Bristol were made by the Government recently. The first was the Government's decision to send the Inmos production development to South Wales. As a result, the development has slowed down. It is a loss to Bristol's economy and to that of the country as a whole. So far as I can judge, no great further progress has been made and no employment has been created in Wales. That was a bad decision about which there is strong feeling in Bristol.

Mr. Paul Dean (Somerset, North)

On the other side of that coin, Marconi Avionics has come to our area and it will create a substantial number of new jobs.

Mr. Palmer

I admit that there is good and bad in everything, but the loss of Inmos to Bristol, when it wished to be in Bristol, was the result of a mistaken decision.

The other grievance involves the refusal to make the area around the new Portbury dock an enterprise zone. The city council has been energetic and it applied for enterprise zone status for that land. We all know the history of Portbury. It was a venture of faith by the old Bristol corporation when Bristol had the resources of a county. It was constructed at ratepayers' expense, with no assistance from national funds. Potentially it is a tremendous national asset, being at a key point in the motorway system. It could be one of the most up-to-date ports of a new type in Europe. However, the city council and the port of Bristol are now going through heavy financial difficulties with the burden of Portbury. Therefore, it would be reasonable if the Government could give assistance by making the area around the port of Bristol, particularly on the western side of the Avon, an enterprise zone. Although it involved no cash subsidy, the enterprise zone was refused.

Bristol has lost again. Because if it is not a special area of one kind or another it does not rank for any help from EEC funds. Similarly, it fails to get the advantage of low interest rates. The Government's decision was conveyed to me and other Bristol Members in a short letter from a Minister, with no further explanation. By taking that decision, the Government have not just hit Bristol in one direction; several other consequent blows have flowed from it, against Bristol and its port.

Mr. William Waldegrave (Bristol, West)

I sympathise with a great deal of what the hon. Member says. However, in all honesty, he must make it clear that it would have been extremely unlikely for his party to start to give privileges of this kind, much as we might want them, to an area such as Bristol, whose unemployment rate is still two points below the national average. This is not a party point. It would be almost inconceivable for a Labour Government to give such privileges to Bristol.

Mr. Palmer

I should have thought that the same was obviously true of the present Conservative Government, but I am speaking here for Bristol and I hope that the hon. Gentleman will do the same.

These adverse factors have entirely distorted the competitive position of Royal Portbury, and are significant to Bristol in the present economic situation. I am sure that the hon. Member for Bristol, West (Mr. Waldegrave) would agree with me at least on this point. The Bristol city council has made tremendous efforts to attract industry to the Bristol area. It has not been asleep on this matter, as the hon. Member knows.

An additional suggestion from Bristol is that we should have some overall good sense and planning in the port facilities for the Severn as a whole, because the nationalised ports on the other side of the river have advantages because of the special status of South Wales. Those advantages are lacking for the port of Bristol.

The port of Bristol is the largest municipal trading undertaking left in this country. Its finances need reorganisation. We would be helped if private funds were available. They are badly needed. But it will not be possible to attract private funds to the port, unless the Government make a gesture to Bristol. I hope that we shall have a public response on this matter from the Minister, rather than private correspondence.

Finally, I turn to the possible Severn barrage. As the Minister knows—he is a man of all wisdom—a special committee has sat for some time, appointed by my right hon. Friend the Member for Bristol, South-East (Mr. Benn), when he was Secretary of State for Energy, following a report by the Select Committee on Science and Technology, of which the Minister was a member. That report suggested that there should be a new look at the possibilities of a Severn barrage for electricity production. If constructed, it would be a public work of great size and immense potential, not just for the present but for well into the future. It would stimulate engineering work, not only civil and mechanical but electrical, on an enormous scale. That would last for many years to come.

The barrage would be a power producer. It would be remunerative and would give an adequate return on capital for if it did not it would not be constructed at all. I have the privilege of serving on that special committee. Our report will be out soon. I think that I can say, without giving away any secrets, that the report will be in favour of proceeding with the barrage, subject to a further feasibility study. If built, the barrage will take the place of about three large modern power stations, whether nuclear or coal-fired. Therefore, the report should be taken seriously in the energy context.

There has been much talk over the years, going back before the First World War, about a Severn barrage but if one constructs a barrage it must be related to the electrical demand of the country. For this reason, today a barrage can be placed economically at the best point across the Severn Estuary to give maximum output.

I hope that when that report appears there will be some political will on the part of the Government and the Cabinet, to go further, because the construction of the Severn barrage is not just a question of reports, or of engineering capacity, but of political will.

8.6 pm

Mr. Edward du Cann (Taunton)

The hon. Member for Bristol, North-East (Mr. Palmer) is right. The context in which we are having this debate is one of a depression in our country. I regret that we have so short a time in which to discuss the matter.

I shall make a suggestion which I hope will be of help to the House, particularly to my hon. Friends, when too many Members wish to speak on important subjects with too short a time in which to fit in those speeches. It is always agreeable to listen to the hon. Member for Islington, Central (Mr. Grant) and especially to my hon. Friend the Minister of State who has many qualities which I admire. However, perhaps it would be better if we did not have opening speeches from the Front Bench but merely had the motion moved formally. We could then have a series of more important winding-up speeches in answer to the debate.

On the face of it, it is surprising that we are discussing the economies of the South and the South-West together, because they are wholly different areas. They are as different as the Scilly Isles are from the Shetlands. However, there is a certain amount of logic in what we are doing. The economic health of the United Kingdom is indivisible. In terms of economic prosperity, the nations and regions of the United Kingdom are wholly interdependent.

In our part of the world, we have special problems. We have an older than average population and we have less industry. I could quote statistics at some length, but I shall forbear to do so, for obvious reasons which we have already discussed. I quote one example: The South-West grew more slowly between 1971 and 1975 than any other region, and by 1975 the GDP per head in the South West was the lowest of any English region at just over 90 per cent. of the United Kingdom average. That example comes from Economic Trends, published at the end of last year.

Although, remarkably, more people are employed than there were five or six years ago, too many people are on short-time working. There are 150,000 or more out of work. In my area the unemployment percentage rate has increased by 50 per cent. in the last five years. The reality is that not only are we in the South-West growing more slowly than is the remainder of the United Kingdom but, alas, we are getting poorer in comparison with the remainder of the nation. If I have an ambition—and I declare this plainly to the House, and I do not doubt that the feeling is shared by many other hon. Members—it is to see a greater level of economic health in the South-West and a better opportunity in particular for our young people.

How can we help? This is my third and last point, and it is the major issue to which we should address ourselves. We heard a great deal about regional aid. Regional aid has a part to play, but, as a rule, only a small one. From my experience as a Minister at the old Board of Trade and with the Public Accounts Committee, I am convinced that if industries wish to move to a particular place they will go there irrespective of regional aid. If the whole country is prosperous, such aid is unnecessary.

Advance factories can help, as can bodies such as COSIRA. However, what matters much more is the attitude of the Government to the regions. It should be a prime aim of policy to do everything possible to maintain local interest and amenities. That has not always been the case. For example, we have not always nurtured local patriotism. We have destroyed some of the ethic of really local government. In my part of the world we have taken the Army away completely. We no longer have a local regiment. We have moved it to a ghetto on Salisbury Plain. The catalogue could continue with village schools. Hardly one substantial business in the South-West is now locally owned. It is the duty of the Government in every way possible to foster local amenities and interest.

We must strive to increase the general level of economic activity. It was once remarked that we had only tourism and agriculture in the South-West. If that were the truth, we should not be ashamed of it. However, it is not true. In 1979, domestic tourists spent £650 million, and overseas visitors over £100 million. Last year in the SouthWest they were spending on average £2 million a day. About 170,000 jobs are involved. We must endorse the strategy of the West Country tourist board. Why did I begin by saying that prosperity was indivisible? If people in the remainder of the United Kingdom are prosperous, tourism will benefit and so shall we in the South-West.

Then we come to agriculture. In the six counties there are 40,000 farms and 50,000 workers. From 4¼million acres our regional output is £1,000 million a year, onethird of it from dairying. However, what arrangements do we make as Members of this House and within the EEC? Farm incomes last year fell by 24 per cent. If the Common Market proposals go through in their present form there will be a further fall of 30 per cent. No wonder bank borrowing for agriculture rose by 30 per cent. last year, which is in any case, a rise on the previous year. If fanning is prosperous, more machinery will be bought. Prosperity is truly indivisible.

The general level of economic health is important to the South-West, but there are also special points. We must see that our communications are good. We have never paid proper tribute to my right hon. Friend the Member for Yeovil (Mr. Peyton) for the work that was done on the A303 when he was Minister of Transport, for the dualling of the A38 to Plymouth and for the building of the M5 motorway—incidentally, in response to a campaign led from the Conservative Benches some years before. We must press on with roads and keep the rail link to Penzance.

I was challenged to repeat the remarks that I made in 1979. I shall do so. This has been a constant theme of mine. We must launch a strong public works programme, preferably privately funded. The hon. Member for Bristol North-East (Mr. Palmer) quoted the Severn barrage, which is an admirable case in point. The Department of Industry should set up a task force to identify all over the United Kingdom a series of projects like the Severn barrage. Let us put together a group of people to see what is practicable, what can be done and what can be funded. Let us do something constructive. In such a way let us bring a little more prosperity to those parts of the world in which we live, in which our children are growing up and which we love.

My hon. Friend the Minister was right. The theme should be success. Here is an ideal opportunity for the Department of Industry to give a lead, which would transform at any rate our part of the world.

8.18 pm
Mr. David Penhaligon (Truro)

I am a West Countryman and sound like one. I was born and brought up in Cornwall and am proud of it. Cornwall has a tremendous problem, although I do not underestimate the problems of other areas.

Percentage male unemployment registered at the employment exchanges in Cornwall is as follows: Penzance 18.1, St. Ives 29.7, Redruth-Camborne-Hayle 17.2, Falmouth 23.5, Helston 20.1, Truro 13.9, Newquay 19.2, St. Austell 10.6, Bodmin 12.1, Wadebridge 18.6 and Camelford 18.3. That is a district average of 16.5 per cent. A recent parliamentary reply that I received revealed that Cornwall had two out of the six worst exchanges for unemployment figures in Britain. The figures say it all. The area is only 80 or l00 miles long. Not one employment exchange shows male unemployment at less than 10 per cent. Not one employment exchange has figures less than the national average.

In mid-summer we can look to a marginal improvement, but it will be nothing like as good as those outside assume that it will be. Some of our detailed employment legislation precludes local people having a regular pattern of summer-time only employment. In the third year some people may end up receiving no unemployment benefit.

The figures for the South-West—or at least the Government's version of the South-West—are better than the national average. I have never been able to work out how Bristol is part of the South-West. I know that by saying that I shall upset Bristol Members, but from the great community in which I live Bristol seems more like a suburb of Birmingham. The figure for the South-West overall is 9.3 per cent. and for the South-East 7 per cent., and the national average is 10.2 per cent. The area has seen a substantial increase in unemployment in the past few months, which is a reflection of the general decline in employment. I firmly believe that most of it is a direct result of deliberate Government economic policy.

Currently the Government—I do not say wrongly, given the situation in which they find themselves—are pouring money into British Steel and British Leyland. That is no help at all to regions as far away as mine. To say that it is no help is perhaps an exaggeration, but it is certainly very little help. I regard that money as a tax on monetarism—a penalty that the Government are being forced to pay to try to prop up the formerly prosperous Midlands because of their own economic policy. The Government are probably now spending more money on propping up those industries than they are spending in all the development areas in the country.

I am firmly of the view that the only real economic hope for Britain now is that the Prime Minister, during her current travels, will persuade the President of the United States to pursue an even more insane economic policy than her own, thus driving the hot money out of Britain and into the United States, and returning to a more sensible exchange rate.

Let us consider the individual industries which are important to our region. In the building industry, unemployment among building workers in Plymouth is 27 per cent., and I have no doubt that the figure for Cornwall is very much the same. Part of that is certainly the result of deliberate Government cuts in financing public housing—in an area in which massive housing queues are the norm, not the exception. In the building industry in the South-West, what the Government have not succeeded in damaging through cuts in public expenditure has been slaughtered by interest rates. Private house building has virtually terminated in my area. That is not surprising when one analyses the reality. For a modest £17,000 house, the first-time purchaser is required to make monthly mortgage repayments of almost £200. In an area in which wages are substantially below the national average, such mortgages are beyond reality and possibility of repayment.

I strongly believe that areas with an essentially weak economy are more dependent upon a regular supply of Government investment than the more prosperous areas of the country. My own county council, probably above all in Britain, could not be accused of overspending. The argument is constantly rolled out in the House that we must keep the rates down and business will pour in. That hardly follows in my county, where I believe that we have the lowest rates of any county in the country.

The Inner London Education Authority spends 92 per cent. more per head on educating primary school students than the county council in Cornwall spends. I give that illustration to show that the county cannot be accused of any ludicrous waste of public money. Nevertheless, in order to maintain a reasonable background of employment, the county requires a steady level of Government investment. Tragically, that level is currently being reduced.

It is in the industrial sector, however, that the real mayhem is being created. The South-West has lost Rank Toshiba, which was mostly in Plymouth but some of it also in the far South-West. There are massive cuts in employment in many of our industrial companies. The China Clay group in my constituency, a prosperous company which last year made £42 million in profits—if we had a few more like it in Britain we should not be in our present difficulties—has reduced employment by 800 in the past nine months. There have been no redundancies. It has been done very nicely and very skilfully. Nevertheless, it now offers 800 fewer jobs in my constituency than it did a while ago.

The county has a peripheral economy. There is no doubt about that. We encourage people to come to our county because the alternative of telling them to stay away would cause even more problems. But there is no doubt that if there is a general reduction in the economy it will further affect some of the peripheral satellite companies in my county.

Mr. Peter Mills (Devon, West)

I am listening very carefully and I have considerable sympathy with what the hon. Gentleman says, but he has not mentioned the fact that, particularly in an industry such as china clay, there is the problem of world recession. If there is no demand, it is very difficult to export clay.

Mr. Penhaligon

Whether it is the peripheral economy, ECLP, Rank Toshiba or the tourist industry, when asked what the problem is, the reason they all give is the exchange rate. Whether it is china clay, tourism, manufacturing springs or any other business that I can think of, all of them blame the exchange rate. Most of them tell me that they are losing their share of the world market and that, over and above the world slump, the exchange rate is one of the reasons why Britain is performing a great deal worse in the current situation than most of our industrial competitors abroad, and this is affecting the South-West as much as anywhere else.

If it is not the exchange rate, it is interest rates. I regard small businesses as one of the most hopeful areas for development. But one has only to meet the people running those companies to know that interest rates are crippling them as nothing has ever done before. I cite the example of tourism, which is a useful part of the West Country's economy. I do not know what kind of season we shall have this year. What with the internal slump and the high exchange rate, we may be in for a very rough time.

The farming industry, in which the hon. Member for Devon, West (Mr. Mills) is respected in the West Country, is experiencing a very difficult time. There is no doubt that the current price review in Europe is very important, because the industry could be swamped with debts—I do not say bankrupted—which will take a very long time to clear.

These are the important parts of West Country employment patterns. All of them are suffering from reversal and decline, which are a direct result of current Government policies, high interest rates and a massive exchange rate.

If I were to recommend a strategy for the South-West, certainly for the far South-West, it would be to encourage what is natural. Farming, fishing, mining and tourism are the natural industries that come to mind. It is true that in the southern half of my constituency there is an engineering tradition which is more substantial than most people believe. I am a product of it. Whether that is a recommendation or not, I do not know. A combination of that with a massive long-term effort to expand telecommunications—to be fair, I believe that the Government are, by legislation, doing some good work on that—could enable the South-West to offer clerical and office services far more cheaply because of cheap office space and, to be honest, a relatively low-wage economy. Such services could be offered for some of the businesses in our big cities.

I therefore argue for an encouragement of what is natural. I am delighted to see the Minister nodding his head. Perhaps he will find out why mining, which is the backbone of Cornwall's industrial development, is excluded from development and special development area help. I have never understood why the industry which is most likely to grow in the far South-West of Cornwall is excluded from help afforded to development and special development areas.

It is true that if we want the tin mined we shall have to persuade people to go there. However, if the idea of such aid is to build up such an industry, it is logical that mining should be included.

Mr. Tebbit

I do not think that the hon. Gentleman hit the issue on the head. The special and selective aids are supposed to be for mobile investment, and by definition the mines are not mobile.

Mr. Penhaligon

That just shows how stupid the scheme is. It seems far more logical to encourage what is natural and what may actually grow than to force something to come in from outside which does not even know where the great county of Cornwall is. Perhaps we can debate that matter in some detail on another occasion.

I accept that there is no way in which the regional problems of Cornwall will be solved in a general slump. We must look to an improvement in our infrastructure. The right hon. Member for Taunton (Mr. du Cann) mentioned roads. I would not argue with what he said about that. It is time that our rail links were improved. There are great fears in the county that the railway line through Cornwall will one day be totally chopped.

It is said that there are no votes in sewage. However, Cornwall is coming to an economic halt because of lack of sensible sewerage investment. There are few areas where industrial or domestic development can take place if there is a lack of sewerage investment.

My final point relates to industrial sites. Surprisingly, despite the slump, relatively few industrial factories that have been built over the years are empty. That shows what a success that policy has been. Now is the time to build further factories so that when the great recovery comes, about which the Government have more confidence than I, the infrastructure will exist to take advantage of it.

I beg the Government to consider giving the far SouthWest a larger responsibility to administer itself. I am constantly writing letters to Bristol, Cardiff, Gateshead and Salisbury—Salisbury is the centre for COSIRA, one of the more successful enterprises—but I fail to understand why so many of the real decisions affecting Cornwall are taken outside the county. If the global sum currently given by the Government to the far peninsula of Cornwall to help it out of its economic difficulties were given to the county itself instead of being administered by all these other bodies, the people living in the county could make better use of it than people sitting in Gateshead, Cardiff, Bristol or Salisbury. A transfer of responsibility to the people who are affected by wrong decisions would help a great deal.

The figures that I quoted earlier are figures of tragedy. People in Cornwall are used to leaving the county to look for a job. Many a Cornish lad has gone to what is locally regarded as England in order to look for employment. The Government's failure is reflected in the fact that that lad no longer looks to England for employment because the situation is not much better there. The people in my county are born and brought up there and they are proud of their Cornishness. Outsiders may not understand that. Cornish people want an opportunity to earn their living, to raise families and to carry on their traditions.

The Government are, to a significant extent, responsible for the current slump. It has caused a breakdown in Cornwall's economy. I doubt whether we shall see a recovery within the next decade.

8.30 pm
Miss Janet Fookes (Plymouth, Drake)

I warmly welcome the opportunity to debate the affairs of the SouthWest. Rightly or wrongly, we feel that, in the national context, we are often overlooked and forgotten. Unconsciously, that was borne out by the note that I received from the Library. I applied to the Library for some additional information for the debate. The Library wrote: There have been a good many articles about the impact of the recession on other regions, particularly the West Midlands … but practically nothing in the national papers on the South-West. Other hon. Members have already intimated that the South-West has its own serious problems. I have been very worried by the increase in unemployment that has taken place even in areas such as Plymouth, where unemployment has risen to 12.6 per cent.

The hon. Member for Truro (Mr. Penhaligon) indicated that in Cornwall there are even worse problems of unemployment. However, it is a mistake to assume that all is gloom and doom, or that all is the Government's fault. Clearly, the world recession must affect every part of the United Kingdom. No one can escape entirely from that. I welcome the fact that, early in their career, the Government gave the city of Plymouth the development status that had been asked for throughout the period of the Labour Government but which had not been granted. That is an earnest of the Government's good will towards that part of the world.

My hon. Friend the Minister rightly drew attention to the number of new firms and new jobs that are being attracted into the South-West generally. He mentioned some, including Becton Dickinson, by name. That firm is now building on a site in my constituency. Recently I had a discussion with the managing director, and I particularly asked him why that international firm had chosen the West Country, and Plymouth in particular. The answer that he gave was instructive. He said that the choice had largely been made because there was an excellent work force, with a reputation for good industrial relations, good humour and skill, and because there were good communications—particularly with the Continent—through the operation of Brittany Ferries. That is important for the attraction of new industries, and I am pleased to be able to trumpet that tonight.

It is important that industrialists who might consider coming to the West Country should know that we have an excellent work force and good communications. Of course, those communications could be improved. I hope that nothing will be allowed to stand in the way of the development of the A38 bypass round Plymouth, which links up with Cornwall and the development of the North Devon link road. That is vital for the development of North Devon. No doubt my hon. Friend will wish to expatiate on that at greater length. Those are two incomparable assets and they offer enormous hope for the future.

There has been a renewal in the old industry of mining. I notice that the hon. Member for Truro did not make that point. More than £9 million is being spent on the Wheal Jane and Mount Wellington mines. If that is wrong, no doubt the hon. Member for Truro will tell me.

Mr. Penhaligon

I am familiar with the activities of the Wheal Jane. If I had not blackmailed the Labour Government into running the pumps for about 12 months, the mine would have been flooded and dead years ago.

Miss Fookes

That does not invalidate my point. Those mines now have a new lease of life, and I am delighted. There is a scheme—which I hope will be successful—to dredge for tin off North Cornwall. If that scheme comes to fruition it will prove vital to an area that has been hard hit by the recession. I am astonished that no one has mentioned the prospect of offshore oil exploration. Oil finds would provide a magnificent opportunity for Falmouth and Plymouth to act as bases for such a major new industry. That would give an enormous boost and incentive to the South-West.

I am in no position to say whether such exploration will be successful. However, those to whom I have spoken—who know more about the matter than I—are sure that it is not a question of if, but of when, it will come about. I know that the city of Plymouth and its commercial organisations are anxious to give every assistance. Even now they are trying to work out schemes so that when the oil comes they will be able to offer every facility. They have visited Scotland to see how things work there and how to avoid the pitfalls.

I hope that the Government will bear in mind that, whatever the new industries may bring, the South-West still relies heavily on a number of small firms—some very small indeed, with fewer than 10 employees. Any assistance that the Government can give, either directly or indirectly, to those small firms will do more to assist the South-West than anything else. I hope that there is a real prospect of future prosperity for the South-West.

8.37 pm
Miss Joan Lestor (Eton and Slough)

We are debating the interests and problems of a large region. There was a time when I spent my holidays in North Devon in Noss Mayo and Newton Ferrers. I thought that I was getting away from the position in Slough. I was seeking a change. I have listened to the speeches that have been made, and it may be that the problems confronting my area are very different from some of the problems confronting the areas to which I have referred.

One thing that many Conservative Members and some Labour Members have in common is that traditionally many of their constituents have come to Slough to find work. Until comparatively recently Slough, with its huge trading estate, was a magnet for labour from many parts of England, Wales and, indeed, the world. That is not so today.

When the Prime Minister made the extraordinary statement that people should move to where there was work, she was probably thinking of the traditional pattern of people seeking work in Slough. But its present unemployment rate, including Windsor and Maidenhead—which are served largely by the huge trading estate in Slough—is now more than 6 per cent. I accept that that is only half of what it is in Plymouth, but it is the highest that it has ever been in the history of the area. It is especially important that that point should be made because, historically, whatever recessions hit Britain in the 1930s, before and since, Slough's multiplicity of industries, its bouyancy and its willingness to experiment in many different industries have always enabled it to escape the effects of a recession. That is not so today.

The Minister spoke about gloom and said that we wanted only to be gloomy. Nobody wants to be gloomy. The fact is that things are gloomy. I tried to interrupt the Minister, but he would not give way to me. He spoke about jobs being created in certain areas, but the question to which he should address himself is whether unemployment is still rising. In my area it is rising more rapidly than ever before. That is the crucial issue. It is no answer to say that in one area some jobs are being created and that in another area other jobs are being created.

There is another question that I put to the hon. Gentleman. I asked the same question during Prime Minister's questions a few weeks ago but received no reply. Is the unemployment that we are now experiencing accidental or intentional? There must be an answer to that somewhere. Is it accidental? Is it unfortunate? Did not the Government intend it? Is it intentional to enable the Government to reduce inflation?

I know of no confident long-term projections that the rate of inflation will continue to fall. However, there are many long-term predictions that unemployment will increase. How can it be said that there is no reason to be gloomy and that we can all be buoyant because things are improving and inflation has begun to decrease? It is not fair to put that argument to those who are now experiencing the loss of their jobs.

Mr. Chris Patten (Bath)

Does the hon. Lady think that unemployment of 1½ million under the Labour Government was accidental or intentional?

Miss Lestor

Unemployment under the Labour Government was wrong and indefensible. I do not defend it. The hon. Gentleman should not try to be clever. Unemployment under any Government is either accidental or intentional. One of the reasons why the Labour Government were unable to tackle rising unemployment was that, unfortunately, they did not have sufficient support in the House for the measures that they wanted to carry through. They were a minority Government. Is unemployment accidental or is it intentional? An answer must be given to the question tonight.

Mr. Tebbit

Will the hon. Lady give way?

Miss Lestor

No. The Minister would not give way when I asked him to do so. He should not expect me to be more ladylike than he was gentlemanly.

Mr. Tebbit

I give way too often; that is the trouble.

Miss Lestor

The hon. Gentleman would have given way once too often if he had given way to me, I can assure him of that.

Slough has always been a magnet for labour. Workers have travelled to Slough from Wales, Scotland, Ireland, the Indian sub-continent and the West Indies. One of the contributory factors to the good race relations that we have always enjoyed in Slough has been the existence of full employment. Slough has a good solid base and experience of working and living with all sorts of different groups. That will stand it in good stead.

It is my fear that one of the consequences of growing unemployment in many of our large cities will be a deterioration in race relations. The Government are not really taking that on board, any more than they are taking on board the deleterious effect that it is having on many young people in our society who find themselves with no prospects of getting a job and the prospect of a nuclear war facing them.

The Government came to power on two important propositions. We all saw the posters that stated that Labour was not working. Presumably the implication was that Conservatives would get people back to work. Secondly, they promised that they would do something for small businesses. There are many small businesses and small firms in my area. Indeed, it has been characterised by those undertakings. What has happened to them? I have a list of small businesses that have closed down. They have given a variety of reasons that led them to close. Interest rates are high on the list.

We have a higher degree of short-time working than at any other time in our history. Since November 1979, 31 firms have gone on to short-time working. In the same period, in 80 firms there have been redundancies of from 12 to 240 people. This is in prosperous Slough, an area people have looked to for developnent and opportunities.

Mr. Newens

Does my hon. Friend recognise that the problems which she is pointing to as applying to small businesses in Slough apply generally throughout the country? Certainly they apply in Harlow. Is it not a fact that this Government, far from masquerading, as they have managed to do for a period, as the Government who defend small businesses, ought to be recognised by small businesses generally in the country as being absolutely a disaster for them? Ought not this to be recognised to be the case throughout the country as well as in our areas?

Miss Lestor

My hon. Friend has made the point that I was coming to—that this characterises almost every area of the country.

In the last two or three weeks, starting with the coal dispute and going on to the announcement of the increase in gas prices, there have been letters in my postbag from small businesses in my constituency pointing out how the increase in gas prices will affect them adversely and saying that the Government had said that they would help them. I have had letters from others saying that, when they wished to switch to coal in the interests of economy and also to help stimulate the coal industry, they were refused assistance that had previously been available to those who wished to make the switch. So the argument that small firms would be helped was nonsense from beginning to end.

I was amazed to hear the Minister say that one of the reasons why we have had a shortage of skilled labour was that people were coming out of school with poor educational qualifications, which meant that there was a lack of skilled people available for jobs. That is amazing to me. Here we have a Government who are doing everything in their power to undermine the education system at almost every level and who are denying young people opportunities to train in skills that would be appropriate to the environment in which they will find themselves, yet we are told that the shortage of skilled labour is due to the fact that skilled people are not coming out of schools ready to take on these occupations.

Firms in my constituency say, quite rightly, that in Slough there has always been a shortage of skilled labour because of the particular types of skills that we have been looking for. That is true. But what the firms are telling me now, and what is obvious to anybody who cares to look, is that many of the firms who form the basis of the training and apprenticeship opportunities for the skills we need are closing. Those which have not closed are not taking on the young people because of financial restrictions and because they are afraid that they will not exist to continue the training.

Therefore, it is nonsense to say, as is true, that we have a shortage of skilled labour in certain industries and, at the same time, undermine the firms and the education system that will provide the training that we so desperately need. This is what I find so extraordinary in the Government's reasoning.

Earlier this week I talked to the secretary of the industrial engineers in my area, who said that, if there was a change in the fortunes of the country and we got a Labour Government, my area would be unable to meet the demand for the skills that would be necessary to take advantage of the upturn in the economy, because the process of learning skills was being undermined and destroyed. That has been said by almost every area of management concerned with training. The Minister should be considering this aspect very closely.

The Minister said that we were all too despondent, that we should be looking buoyantly towards the future. But even if there is an upturn in the economy in the next two or three years, skilled labour will not be forthcoming in industries that have traditionally demanded it, and they will have to look elsewhere for it. That is why many of us are depressed and feeling far from buoyant about the future of the areas we represent.

It is not sufficient for the Minister to say that certain jobs are being created when unemployment is rising to an unprecedentedly high level in my area and in others which in the past have managed to escape the full blast of economic recession. Unemployment will go on rising, as every economist predicts, because it is out of hand.

During the election campaign the Tories said that Labour was not working and spoke of helping small businesses. They raised hope in the minds of many owners of small businesses in my constituency and throughout the country. Those people have been sorely disappointed, they have been pulled down, and in their wake the opportunities for thousands of people have been destroyed.

8.52 pm
Mr. Peter Mills (Devon, West)

I welcome the opportunity of saying a few words in the debate, but I shall not follow the arguments adduced by the hon. Member for Eton and Slough (Miss Lestor). I do not shy away from them, but I want to concentrate on the problems of the South-West, and particularly those in my constituency.

I wish to report to the Minister a serious problem that has arisen in North Devon, which my hon. Friend the Member for Devon, North (Mr. Speller) and I represent. The development area status that we had was taken away. We were told that our employment position did not warrant development area status. We warned the Minister concerned at the time that this was an unwise decision. Now our fears have come true and the problems in North Devon are growing fast, just as they are in other parts of the country. The loss of development area status has increased our problems. Firms have reduced their staff, some have gone out of business, unemployment is rising fast and we need the development area status to be reinstated.

Although we work hard and attract new firms into the area—we have been successful, it is not all gloom—the problem is that they are being attracted back into Plymouth and other areas with development area status. It is difficult to convince small companies that they should start up their factories in North Devon.

This is a growing problem, and I should be grateful if the Minister would reconsider the position of Bideford, Barnstaple, Torrington, and Okehampton, all of which have lost development area status. Our case is sound. If development area status is taken away because the level of unemployment is low, when the level of unemployment rises above the cut-off point development area status should be given back.

The problems of retired people in the South-West, particularly in the rural areas, are becoming increasingly distressing. Naturally, we welcome retired people into our small villages, but they face extremely high costs, especially in rural transport. I recognise that the Government have made kinds of efforts to help to ease the problem, but there are still extreme difficulties!. Many concessionary fares are disappearing. The motor car is becoming extremely expensive. I believe that attention must be given to these matters particularly as the economy improves. I am not arguing that it is possible to do much at present. When the economy improves, we should turn our attention seriously to these matters.

One worry for retired people was the possibility of the disappearance of sub post offices. It is probably true that we have won that battle, or at least gone a long way towards winning it. The problem could be very serious. Coupled with the tremendous loss of village shops up and down the land, it becomes difficult for elderly and retired people to obtain the services that they want and the provisions and goods that they need. I understand the Government's attitude. I can see that they want to reduce public expenditure, and the number of civil servants, by switching to modern methods, but I must say that those of us who live in the rural areas are concerned about any further movement in this area. We must hang on to our sub post offices. They give immense help and benefit to those living in the area.

I should also mention the cost of fuel in rural areas. I say, frankly, that I do not agree with my Government and party on energy policy. The criticisms levelled at this policy are justified. It is extremely difficult to explain the policy to people. I get bogged down myself if I try to do so. I realise that I do not possess all that much intelligence, but it is extremely difficult to explain the policy to a retired person living in a small village in the South-West. These people do not have the opportunities of those in the towns to obtain alternative supplies of energy. I hope that the Government will look carefully at the problem. I hope that they will readjust their energy policy. It is not right at the moment.

Another factor is the cost of water. It is true that the Government have taken action recently to ease the problem. All Governments make mistakes, but I believe that we made a real mistake on the issue of democratic representation on water authorities. If the representation was more democratic, some of the changes that are necessary could be introduced, and insisted upon, to the benefit of those living in rural areas. Water is an extremely expensive item, as I believe it is also in the towns.

I should also like to refer to the cost of living. The Government have to be congratulated. To reduce the cost of living has been one of their main planks. It has become a fact of life. I have every faith that this progress will continue. I must say, however, that it is a fallacy to believe that because one lives in a village or the countryside the cost of living is much cheaper than in the towns. That is not so. For the retired and the elderly, this is a real burden.

I should like to describe to the Minister the difficult position that they face. Those who are retired and come to live in a small village bring with them a certain amount of capital and cash and their pension. As they get older, these funds start to dry up. The cost of living rises, but their income does not increase very much. They have to sell their car. This means that they cannot get into the towns to take advantage of cheaper prices or cheaper food in some of the big supermarkets. That is something we need to watch carefully, because a growing number of people feel frustrated and angry at what is happening. I fully realise that the Government cannot do much about it, but I ask them not to add to the burden in any way. It is not on.

I know that many other hon. Members wish to speak about agriculture, transport and many other subjects. But I want to bring two matters to the attention of the Minister. First, the Government should look again at the matter of development area status. Secondly, they should watch carefully what is happening in the rural areas, especially our small villages, and try to deal with the problems and difficulties that are facing retired people because of the cost of living.

9 pm

Mr. David Stoddart (Swindon)

I express my appreciation to the Shadow Cabinet and to my right hon. and hon. Friends on the Front Bench for giving the House the opportunity to discuss the problems of the South and the South-West. It shows that the Labour Party is concerned about the whole of the country and not just one part of it. The problems which beset the northern part of the country through Government policies of monetarism, high interest rates and the high value of the pound abroad affect the South just as much. Firms are going out of business and many are being put out of work. When I was first elected to my constituency in 1970 we had an unemployment rate of 2 per cent. At the last count, it was 9.7 per cent.—the highest in Swindon's history. That is a direct result of the policies pursued by the Government.

The Minister mentioned my constituency and pointed to a number of firms that would be moving there. I am glad to say that they are, but that is no thanks to him. Some of the moves are due to the efforts of the Labour Government, but most are due to the efforts of a very progressive local council, which has done its job without Government assistance.

However, in 1980 we lost 3,600 other jobs. The jobs we are gaining will in no way make up for the jobs that we have lost. The depressing march of redundancies goes on from day to day. Day by day we hear of new redundancies here and there. Today, we heard of sackings by Emerson Electric, a modern forward-looking firm manufacturing products of the present and the future. The resistors division of Plessey Electronics has laid off 92. Another branch of the firm is laying of 72. That is all in a week, and the depressing march goes on. Yorkshire Imperial plastics, a firm which provides water pipes, is closing down in Swindon because the Government have slashed the housing programme and cut the amount of money available to water authorities. That firm is going out of business in Swindon as a direct result of Government policy.

The number of vacancies, too, is depressingly low. At the last count there were only 12 vacancies notified for people under the age of 19 years. The young people in my constituency, who are being helped through the youth opportunities programme, do not think that that is good enough. They want to get out and do a good job of work. They want to have apprenticeships. They want to be trained in a proper manner and to feel that they are doing a worthwhile job, but as long as the Government pursue their present policy there is little hope of their being able to do that.

I do not suggest for one moment that Swindon is a depressed area; nevertheless, it is suffering very badly under this Government. It is not only industrial firms that are making things difficult; it is the Tory-controlled county council, which seems to cut services with great alacrity, sacking teachers here, caretakers there, and dinner ladies somewhere else. The council does it with alacrity. Indeed, the local Tories on the borough council have been advocating the sacking of 200 people, just like that, without any investigation. The Government are joined in the local sense by their friends who want to make a bad situation worse by sacking more people in the public sector.

This policy also affects the surrounding areas of Swindon. Swindon is a little red spot in a great ocean of blue. [Interruption.] Hon. Members can say "Yah, yah", but there are a lot more red spots appearing now. After the elections it will be seen that there are a lot more people who are sick and tired of the Government for whom they themselves voted.

I am glad to say that people are now joining the Labour Party in large numbers in those areas. They want to do everything they possibly can to help get the Tories out. But it is not only the Labour Party, my hon. Friends and the Leader of the Opposition, who are talking about the Government and criticising them. Industrialists are also criticising the Government. One of them—a Mr. Turley—made a speech in my constituency. The report, which I shall quote to the House, shows exactly what industrialists feel about the Government. The newspaper report states: The boss of two Swindon engineering firms has hammered the Tory Government's economic policy—as one of his factories has been forced on to a three-day week. Instead of sacking 60 workers at the Auto Precision factory in Blunsdon, John Turley has put 156 on short time … 'We are just slipping into a black hole, and I can't see any end to it. It is the worst situation I have ever come across', said Mr. Turley, who is chairman of the Blunsdon factory and Kembrey Engineering … 'I am so depressed as I really can't see any answer. It is only going to get worse. Engineering is on the slide. The only growth industries are law and order, the armed forces, banks, and the labour exchanges.' That is not from a Labour politician; it is not from the hon. Member for Swindon; it is not from my right hon. Friend the Member for Bristol, South-East (Mr. Benn). It is from an industrialist who was good enough to take over some firms in my constituency and save 400 or 500 jobs. So the criticism of the Government and the policies that they have pursued for far too long is coming from all quarters.

Fortunately, Swindon has been a forward-looking authority. It has planned its housing and its population as a whole. As a result, we are very fortunate that the position is not worse than it is, since the British Rail workshops were run down from about 13,000 jobs to the present number of about 3,500. Swindon has planned its future, but the Government's policy is making that continued planning very difficult indeed. The Government's housing investment programme cuts, for example, are hindering the policy of job expansion.

One of the policies of Swindon is to house key personnel and to provide housing for firms coming into the area. Its ability to do that has been badly hit by the restriction in the housing investment programme. I hope that the Government will give further consideration to the cuts that they have imposed, particularly on housing, because they are affecting employment.

Swindon is still a railway town. It still has all the facilities for rebuilding and refurbishing rolling stock and locomotives. If the Government really want to tackle unemployment, in Swindon and elsewhere, they should do something to refurbish and rebuild railways and the other public services that are in decline. There is no doubt that our railways are an utter disgrace. Many of the carriages still in use are 30 and 40 years old. They need modernising and renewing. We have the skills and the resources to do that, if only the Government would use those skills and resources.

We have 2½ million people unemployed. It would be far better if those people were used to refurbish our public services, which are in a state of squalor and decline that has never been seen before in this country. I therefore urge the Government to use the money that they are now spending in large amounts on keeping unemployed people on the dole for the purposes that I have mentioned. If they do that they will reduce unemployment, and they might even earn a little gratitude.

9.12 pm
Mr. Robin Maxwell-Hyslop (Tiverton)

If one is to attract new enterprises to an area of unemployment, and if local authorities and, indeed, Members of Parliament are to be as effective as they can, it is absolutely essential that the Department of Employment should be able to provide accurate and relevant statistics.

Although we live in a computer age, it is astonishing to find that the Department of Employment is still in a quill pen age. I should like to give some specific examples. Crediton, in my constituency, is nearly eight miles from Exeter. It is impossible to get from the Department of Employment the unemployment figures for Crediton, because they are lumped in with Exeter. Ten years ago, before the labour exchange at Cullompton closed, there were separate unemployment figures for Cullompton and Tiverton. Now all that one can find out from the Department of Employment is that there are 1,091 people unemployed in an area covering both, but that is not the information that is needed if a firm is to locate itself accurately.

At the south end of my constituency, Teignmouth and Dawlish together have 1,038 unemployed people. But the Department of Employment cannot tell me what percentage that is of the normally employed population. It can only give a percentage figure for the whole of Torbay, spanning three different constituencies.

It is grossly past time that the expensive and enormous Department of Employment pulled up its socks and produced accurate figures of local unemployment so that any mobile industry or enterprise that might be attracted can know the precise situation—where sites are available, but where the labour that they require may not be available.

Today we have been discussing employment primarily in terms of industry and, to a lesser extent, the service industries. Let us remember that between 1976 and 1980 net farm incomes decreased by 21 per cent., assuming a constant value of the pound which does not exist. Interest payments went up by 230 per cent. and borrowing by 186 per cent. That is not only why direct employment of farm workers has shrunk and continues to shrink but why we have avoidable unemployment in the Midlands in the traditional engineering supply industries which used to depend for a large part of their sales on an agriculture industry which is now squeezed desperately.

We heard the Opposition spokesman on agriculture on Tuesday pressing the Government to revalue the green pound so that more and more agriculture enterprises will make a loss without any net income. It is incomprehensible why the Opposition do not realise that they are condemning not only the rural areas but industrial areas to poverty as well.

Mr. Newens

Will the hon. Gentleman give way?

Mr. MaxwelJ-Hyslop

I shall not give way because I am trying to confine my remarks to five minutes so that other Members may speak.

I conclude with the plea that my hon. Friend the Member for Honiton (Mr. Emery) made, namely, that Government services should be situated in the centre of the area that they are supposed to serve, not in one extreme corner. Bristol is nearer to Dover than it is to Penzance. That is sometimes overlooked. If the so-called regional headquarters of the various Government Departments were located in the Exeter-Plymouth-Torbay area, they would be more accessible and therefore much more efficient. In addition, in an area where there is tremendous seasonal unemployment as well as unemployment in the summer, that would provide an outlet for employment, particularly for women, which is desperately needed and which will be needed in the foreseeable future.

9.17 pm
Dr. David Owen (Plymouth, Devonport)

This is not the time to savage the Government's overall economic policies, although the effect of them in the West Country has been more devastating than at any time in my life. We must urge the Government to take measures that will help us in the far South-West.

I take up what the right hon. Member for Taunton (Mr. du Cann) said, namely, that there is a vital and urgent need for public investment in certain key areas. The first is the Severn barrage. That should be brought forward at the earliest possible moment. Some further planning has to be done, but an early decision is needed. It would help in the far South-West because English China Clay would be a major supplier of some of the essential elements of the construction work.

The construction industry is one of the worst hit. In Plymouth the situation is bad. The Government could make selective investment decisions. For example, the construction at Deriford hospital has ceased simply because the regional health authority does not have sufficient money to fund its completion. That could and should be brought forward. It would ease the situation in the construction industry, and it is an investment that it would pay us to make.

We need better roads, particularly in Cornwall. There is a strong case for increasing the road building programme and continuing the extension of the motorway through Plymouth. I hope that that will continue, because it will provide jobs in the construction industry and generally in Plymouth. I refer to the plan to link the existing road with the Tamar bridge.

Something must also be done about the extractive industry. It is an indigenous industry and needs extra aid. The Minister said that it was not a mobile industry. That attitude must be revised. There is abundant evidence that, with a little more help, the tin mining industry, which is marginally economic, could be tipped towards being economic in Cornwall. There is also the possibility of mining at Hemerdon. That is an interesting prospect which could be tipped towards being worth while. There is a strategic need for the extractive industries of this country to be safeguarded at the first opportunity.

The Royal Navy is vital to Plymouth. If there are to be cuts in the Ministry of Defence, there must be certain safeguards, and they must have a regional emphasis. We have lost 1,000 jobs at the Naval base in Plymouth. Those jobs should not be lost. The Navy must consider Bath. I know that unemployment may be a problem there, but it is by no means as bad as that in Plymouth. I realise that there are also problems in Portsmouth and Chatham. The effects of the rundown of jobs at the Naval base in Plymouth are extremely serious.

The Minister knows that we face a serious problem with the Rank-Toshiba redundancies that are about to be made. It looks as if Toshiba will stay but with a much reduced capacity. There is a large partly empty plant at Rank, which will need to be filled. We shall expect every help in trying to persuade Toshiba to put a semi-conductor factory in the United Kingdom if it decides to build one in Europe. We must put forward a convincing case for the South-West, particularly Plymouth. I know that there are serious problems in Cornwall, particularly in Redruth. I hope that something can be done about the employment problems in Helston, which will certainly be affected by the Rank-Toshiba closure.

I have given some practical suggestions which the Goverment can carry out without changing their other policies. Major areas must be covered. We cannot afford to have another year in which Devonport dockyard is preferentially cut back, as opposed to Chatham and Portsmouth. There were higher percentage reductions in employment in Devonport and in the naval base. That cannot be right with any regional policy.

The problems in the South-West are devastating and are getting worse. If we do not take action now the situation will be far worse next winter. Action that is taken in the next few months might help to shield us from worse consequences next winter. There is not much time. I beg the Government to look at investment programmes that will have merit in five or 10 years' time. Sewerage programmes, sensible public works building programmes and the injection of a little money into local authorities, such as Plymouth, for their house building programmes should be considered. Plymouth has a homeless problem and bad housing. There should be an extra financial allocation for public housing in Plymouth, which would help the construction industry.

Those are positive suggestions, and I hope that when the Minister replies to the debate he will say that they will be considered seriously.

9.23 pm
Mr. David Mudd (Falmouth and Camborne)

I hope that the right hon. Member for Plymouth, Devonport (Dr. Owen) will forgive me for not taking up his comments, although I am most grateful for the concern which he continually and genuinely shows for the problems which are related to his constituency and to mine.

I shall first deal with the problems of incoming international firms wishing to come to Cornwall and trying to create jobs. When they come into Cornwall, they unlock a veritable Pandora's box with a proliferation of advisory bodies and organisations, each scuttling hither and thither and falling over each other in an attempt genuinely to help.

There should be one advisory body which is able to answer five main questions which any incoming industrialist wishes to be answered: "Can you provide me with a site and, if so, at what cost? Does your area have the type of people I want to employ and can you train them for me? Are all the main services available, which I want, and can you guarantee that I will not have to face a hassle with energy or environmental services, and how soon and at what price can you connect me to those services? Can I get the support services which I need from subcontractors and suppliers? How in terms of communications and distribution does your area measure up to my needs to move raw materials, people and finished products?"

Those are five simple and basic questions that are asked over and over again. However, instead of there being a simple answer the responsibility spills over to the district council, the county council, the English Industrial Estates Corporation, industrial estate officers, district valuers, public utilities, the Department of Energy, the Department of the Environment, the Ministry of Agriculture, Fisheries and Food, the Department of Employment, the Manpower Services Commission, gas, electricity, water and telecommunications authorities and local chambers of commerce. If we want to see industry generated in special development areas, why on earth cannot we have a simple, well advised, well equipped and representative task force able to deal with the questions of incoming industrialists?

The second part of my speech concerns two problems particularly associated with the recession that has hit Cornwall. First, too little thought and encoragement are coming from the Government and industry over the continuation and creation of industrial apprenticeships. The folly of that neglect will seriously hit us in the mid-1980s, when we shall find ourselves deprived of the skilled nucleus that we need and, ultimately, of middle-line management.

Secondly, I fear the social consequences of our failure to consider the long-term effect of redundancy on men in their late forties and early fifties. One town in my constituency has an unemployment rate of 23 per cent. I am increasingly meeting unemployed men in that age group, and I find them resigned to living off their redundancy payments but eagerly reading every economic forecast in the belief that as things get better they will be re-engaged. We must be honest with those men, with ourselves, with industry and with the country. The majority of those men will never see the inside of a work place again. If they do, it will be an immediate step back into over-manning and will set off another crazy cycle of lack of competitiveness.

However distasteful and politically unacceptable in the short term, we must spell out the fact that for many men there is no way back, but for goodness sake let us not be negative. Let us try to find ways to occupy their energy and leisure time in a dignified and useful manner. What I am about to say may be considered pure heresy by some of my hon. Friends, but let us educate ourselves and the public to realise once and for all that the man who, by becoming redundant, has helped to save a firm and the jobs of his colleagues for the future is not an idle scrounger and is perhaps contributing a great deal more to the future prosperity of the nation than the man who insists on turning up day after day for the job that makes his firm uncompetitive.

Several Hon. Membersrose

Mr, Speaker

Order. I understand that the Front Bench is co-operating and is not seeking to wind up until 9.35 pm. Two other hon. Members may therefore be able to speak.

9.27 pm
Mr. Stephen Ross (Isle of Wight)

My speech is the second Liberal contribution, and I shall keep my remarks short. However, I make no excuse for speaking. My constituency has the highest rate of unemployment in the South of England, and mine is one of the few contributions from that area. Unemployment in my constituency stands at 10½ per cent., and is increasing.

The Minister expected speeches of gloom from the Opposition Benches, but my speech will not be all gloom, although we need a bit of help. I have tried to get assisted area status. The application has been turned down, and I do not intend to press the matter unless the situation gets very much worse. We have modern industry in the Isle of Wight, but we have many problems. Many hon. Members may not know that the cost of our petrol is at least 10p a gallon higher than the national average. We have 50 private stations and no company-owned ones. That is an additional burden that everyone living on the Isle of Wight has to bear.

Secondly, we do not get the advantage of certain heavy duty oils. I am thinking particularly of the horticulture industry. We have a modern horticulture industry, with a great deal of glass. It is a tragedy that horticulturists are virtually bankrupt. One of the largest companies, which used to employ over 60 people, has already finished business. On Monday night I met some of the growers. I do not know how they have survived thus far. One problem is that the industry cannot get gas or some of the cheaper types of heavy duty oil. First, the companies will not supply the oil and, secondly, it would have to come to the island on a boat, and there is argument about whether it is safe to bring it across. The industry is up against that, in addition to the fact that in Western Europe it is competing with the Dutch, the Germans and the rest, all of whom are subsidised.

I plead, as I have tried to do time and again with the Minister of Agriculture, Fisheries and Food, that at least some pressure should be brought to bear by the Department of Industry to see whether help can be given towards energy costs in offshore islands such as mine. Some tax relief on heavy duty oil in the Budget would be helpful.

Secondly, the roads on the Isle of Wight are absolutely deplorable. We need a 10-year programme. Other hon. Members have pleaded for the infrastructure. Certainly, it would be an enormous boost if we could have a promise that the money available through the transportation grant, or whatever grant now applies, will be considered and maintained.

Thirdly, in the tourist industry, there has not, I think been a new hotel built on the Isle of Wight since the war, although there has been some modernisation. Frankly, we are losing out. There is a great need for investment. When I look at other parts of the country that happen to be in assisted areas [am envious of the money that they have received through EEC grants. I believe that Rhyl received a sizeable sum and that Cardiff was given more than £1 million towards its opera house. Those are the sort of grants that we, too, could desperately do with at this time.

Finally—this has not been mentioned so far, although I am sure that other hon. Members encounter similar cases—one of my greatest problems, arise from small firms coming to me because they are in trouble with VAT or PAYE I am often on my knees pleading with VAT officers and collectors of taxes to be reasonable, as, on the whole, they are. Nevertheless, I am sure that the Government could do something about this. It is tragic to see firms going further and further down because they have got themselves into trouble with the Inland Revenue. Of course they have to pay their debts, but there must be some way in which those debts could be laid over for a while without penal interest rates being charged. Otherwise, we simply put the firms into bankruptcy and wind them up. The chaps are then on the dole and cost the Government just as much money in other ways, when they could be in business.

We have some very modern industries on the island. I am constantly surprised at how well they are doing. We have the light aircraft industry. We have probably the best boat designer in Britain, although, unfortunately, the Navy does not want to build his boats and therefore he has to go abroad. We have Plessey, BHC and a number of companies of that kind, all doing very well.

Nevertheless, we still have a 10½ per cent. unemployment rate, and the figure is rising. The hardest letter that I have to answer is that in which a youngster thanks me for sending him a birthday card but asks when I am going to do something about getting him a job.

Help can be obtained from some multiple companies and from the banks through enterprise agencies. I am doing my best with that. But we need a little more help from the Government. That is my plea tonight.

9.33 pm
Mr. Chris Patten (Bath)

I should like to put a couple of points to Ministers which I believe would not only help industrialists and firms in my constituency to survive the recession but would help to stimulate recovery in due course.

The first concerns the temporary short-time working compensation scheme. A number of firms in Bath and in the surrounding area have used the scheme as a breathing space. It has given them a valuable chance to retain during the recession skilled labour which they hope then to use in the upturn. One thing that bothers me a little is when the upturn will come. Many firms in my constituency joined the scheme last autumn. Several hundred jobs are involved. They come out of the scheme next summer. I am not sure that we shall have seen much sign of even an incipient recovery by that time.

I therefore ask my right hon. and hon. Friends—and I hope that an answer can be given on this today—although I know that the scheme is expensive—to consider the possibility of extending it for three or six months next summer, even if it is at a lower level of subsidy. That is a very important factor in retaining skilled jobs until the level of economic activity in this country begins to rise once again.

The second point concerns that iniquitous tax on jobs and exploits—the national insurance surcharge on employers. I have already used up most of my adjectives in talking about that tax in the past. I remind my hon. Friend that the CBI, in its pre-Budget memorandum to the Chancellor of the Exchequer, pointed out that it would be almost impossible to imagine how one could devise a more damaging tax on business. I believe that that is correct. It is absurd that, on the one hand, we are subsidising labour costs and, on the other, increasing them through the national insurance surcharge.

We are told that nothing can be done about the matter because it would be too expensive. In other words, the argument is that, because the burden on the shoulders of industry is so great, nothing can be done to relieve industry of it. That is a ridiculous proposition, particularly from a Conservative Government. I realise that a solution would be expensive. Therefore, if we cannot abolish the tax completely, we should look at ways of cutting it selectively, for example, in order to help those areas or industries that have been hardest hit by the recession.

It is perfectly possible to do that administratively. For example, charities are at present exempt from the tax. I therefore hope that the Government will look positively at ways of reducing the tax, or removing it entirely, in respect of manufacturing industry at the least.

In the remaining few minutes available to me, I should like to touch on a point made by the right hon. Member for Plymouth, Devonport (Dr. Owen). When one looks at documents such as the Manser report which was produced for the Federation of Civil Engineering Contractors last year, it is obvious that throughout the 1970s there has been a decline in capital investment in the public sector and an increase in current spending in the public sector.

Four years ago, the Estimates Committee said that that was a damaging trend which should be reversed. I understand the constraints on the Chancellor this year, even though I do not entirely share his views about the PSBR and how it should be assessed. Nevertheless, he has real difficulties. Even so, I hope that we can find some way of using capital programmes in the coming year in order to give a modest boost to the British private sector. I emphasise that, because there are one or two outrageous examples of public procurement policy in my constituency where local firms have found themselves elbowed aside by foreign competition in going for public sector contracts for no very good or discernible reason. By nudging and shoving, it may be possible to deal with that sort of problem.

I am not suggesting that the Government should publish guidelines or issue instructions, which are the sort of actions that would annoy foreign competitors.

Ministers are there to do that sort of thing in a more discreet way. That is more important than understanding the case for monetary-based control. That may be a rather old-fashioned view of politics, but it is a more realistic one, particularly in the present climate.

9.37 pm
Mr. R. C. Mitchell (Southampton, Itchen)

This is a unique occasion. It is the first time since the war that the House of Commons has had a debate on unemployment in the South and South-East. We have had debates on the South-West, but never before on the South and South-East. The reason is obvious. It is only in the last year that we have really needed to have such a debate.

The Prime Minister often goes around saying that unemployment doubled under the Labour Administration, but in many parts of the South and South-East unemployment has doubled in the 18 months that this Government have been in office. We now have the worst unemployment rate in many parts of the South and South-East since the 1930s.

One thing of importance that it has shown—here I agree with the right hon. Member for Taunton (Mr. du Cann)—is that unemployment is a national problem and not just a regional problem. It is ironic that the South, which voted Conservative in large numbers in the general election, is now being sacrificed on the altar of monetarism.

The Prime Minister tries to blame excessive wages. Has she heard of the factory in Weymouth, in the constituency of the hon. Member for Dorset, South (Viscount Cranborne)—who is not present today—where the workers on low earnings agreed to take a reduction of £10 a week, but still the factory closed? I had hoped that the Minister would tell us something new. However, he said nothing and took a long time to do so. I noticed a certain degree of scepticism on the faces of those of his hon. Friends who sit behind him when he read out a list of promises. It must have taken the Department months to dig them up.

As several of my hon. Friends have pointed out, the problem in the South is that the small business man has been hit. The South does not have the great concentration of industry that is found in the North and in the Midlands. It relies far more on small businesses. Every day we read in newspapers, hear on the television or receive letters in our postbags, about bankruptcies and about firms in the South that have had to go into voluntary liquidation. They cannot cope with excessive interest rates, or with having to borrow money at interest rates of 20 per cent. plus. Before they can start to make a profit they have to bear that tremendous overhead, and they cannot cope with the other burdens that the Government have placed on them.

When I canvassed during the last general election I knocked on a certain door, and when the man answered my knock I told him who I was and he said "Oh no, I must vote Conservative". I asked him why, and he said "I am a small business man". The other day he came back to me and apologised for what he had said. He is now on the dole, along with thousands of other small business men.

Can we see any hope for the future? At every management seminar the question is asked "Can you see a light at the end of the tunnel?" At a management seminar in Southampton a leading industrialist said: No, I cannot see a light. I cannot even see a tunnel. All I can see is a bloody great hole. Many people in the South have a similar feeling of no hope.

In addition to the unemployment that is shown in the statistics, there is a mass of disguised unemployment. Many firms are working only part time. Industrialists say that when the upturn begins they will be able to increase production, in many cases by 25 per cent., without taking on any extra men. The position is becoming increasingly serious. That is why I beg the Government to take note of some of the remarks made by the right hon. Member for Taunton and by others, who have asked for selective public works programmes for the region.

It is criminal that there should be an urgent need for houses and that there should be people on waiting lists when building workers are unemployed. It is criminal that we should be short of hospital beds and hospitals at such a time. We should get on with the electrification of the Southampton to Portsmouth line. That would provide employment.

Mr. Michael Colvin (Bristol, North-West)rose

Mr. Mitchell

The hon. Member for Truro (Mr. Penhaligon) gave us some appalling unemployment figures. Like me, he will know of the tragic stories that lie behind those statistics. Unemployment affects not statistics but people. Unemployment affects the man of 54, the former manager of a small firm, who sees no hope of employment. He thinks that he will have to spend the next 10 years on the dole despite the fact that he has a lot to offer society. Unemployment concerns the man who leaves home at 8.30 am, wanders about the town all day and returns home at 5.30 pm because he does not want his neighbours to know that he is unemployed in case they think that he is a scrounger.

Even more, unemployment affects the youngsters of 15 or 16 who argue that it is not worth getting O-levels or CSEs because there is no hope of finding a job. If Parliament deserts the young people of this country, they will desert us. They will turn to various forms of extremism. For a person of my generation, who remembers the last war, it was frightening to see—as I did recently—a parade through London of young people who carried and wore swastikas. That frightened me.

Unemployment and lack of hope are contributory factors. I seriously believe that if unemployment continues to rise at its present rate the whole basis of parliamentary democracy in Britain will be threatened.

I propose to quote from a speech made in the House on 27 November by the right hon. Member for Sidcup (Mr. Heath), who knows the South of England very well. He said: I find that I am not entirely alone among those in the Conservative Party who worked for its victory who are worried about the present situation. One of our intentions after the 1930s was to ensure that the Conservative Party was never again considered to be the party of unemployment. I ask my hon. Friends to think seriously about that in our present circumstances."—[Official Report, 27 November 1980; Vol. 994, c. 918] I assure the House that throughout the South and South-West the Conservative Party is once against known as the party of unemployment.

I hope that the Government will listen to what has been said from both sides of the House. I hope that they will change direction before it is too late. If that happens, the debate today will have been worth while.

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

If I were to answer the debate properly I would have to be the Chancellor of the Exchequer, the Minister of Agriculture, Fisheries and Food, the Secretaries of State for Defence, the Environment, Industry, Employment, Transport, and for Foreign Affairs. I am not, and I have only 14 minutes available to me. I shall try to answer most of the points raised as best I can.

I grew up in the South of England and know the area well, although I now represent a constituency in the North. It is only fair to say that we Northerners—I am a Northerner by adoption—have rather greater problems than do the Southerners, although I accept that there are pockets in the South where unemployment levels are especially high. The constituencies of the hon. Member for Truro (Mr. Penhaligon), my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) and my right hon. Friend the Secretary of State for Defence, as well as other Cornish constituencies, have employment levels as bad as those in the North. I appreciate that that is the case. But, overall, the problems in the South are not as great as the problems in the North, in Wales and in Scotland.

I do not think that the position is as gloomy as some hon. Members would have us believe. During the course of the last year, through the employment services division of the Manpower Services Commission, 121,000 people were placed in new jobs in the South-West. That is only about one-third of the total new vacancies filled during the course of the year, so we are talking about 360,000 engagements. The equivalent figures for the South-East are 575,000, and 1.5 million in all.

Vacancies come on to the market, and are filled. However, it should not be thought that I am in any way complacent about the position either in the South-West or in the South-East. So much so am I nor complacent—nor is my right hon. Friend the Secretary of State for Employment—that a considerable amount of resources have been devoted to helping those without a job, to those whose jobs are in jeopardy, through the temporary short-time working scheme. There are 11,329 in the South-West and 24,930 in the South-East currently benefiting from that scheme. We are helping as much as we can. The job release scheme benefits almost 5,500 in the South-West, and 8,398 in the South-East. All that costs Government money—taxpayers' money. We are doing what we can, in limited circumstances, to help overcome the difficulties.

I apologise for bashing on, but it is the only way to get through all the points that were raised. One of the themes that ran through the debate was the concern mentioned by several hon. Members about training and skilled shortages. The hon. Member for Eton and Slough (Miss Lestor), my hon. Friend the Member for Torbay (Sir F. Bennett), my hon. Friend the Member for Falmouth and Camborne and the hon. Member for Southampton, Itchen (Mr. Mitchell) were concerned about youth and the skill shortages that might take place as and when the economic upturn comes. It is an issue that very much concerns the Department of Employment. That is why we put it in the melting pot. I know that Labour Members are not especially happy about the approach that we are adopting, but we believe that we have to get things right for the 1980s and 1990s.

There is common ground that if young people and the middle-aged have to be retrained for new jobs they must have the right training. If those are not available, retraining will be no good for them and no good for Britain. There is common ground in that respect, although perhaps there is a difference of opinion between the two Front Benches about the way in which we should act.

Another theme running through the debate was the importance of small firms. I have personal knowledge of the area, especially of Wiltshire, Dorset, Devon, Cornwall and Somerset—and I entirely agree with my hon. Friends who said that in future it will be small firms more than any other firms that will bring employment to the South-West.

I had a hunch that small firms were being born at a rather greater rate than Labour Members have been suggesting. I asked what inquiries were being made of the small firms service in the South-West region. Rather amazingly, the number of inquiries has increased by 40 per cent. over the past year. I am told that 40 per cent. of the inquiries concern start-ups. I accept that not all these inquiries come to fruition. However, there is the entrepreneurial activity in the South-West that I expected. Over some years that activity, provided that it is properly supported by a Government who want to promote activity and enterprise, should provide more jobs and more prosperity in the area.

In one respect the hon. Member for Islington, Central (Mr. Grant) was contradicted by the hon. Member for Southampton, Itchen The hon. Member for Islington, Central said that the South-East is now the largest manufacturing centre. We in the North-West think of ourselves as the big industry area.

Mr. John Grant

I was talking in terms of population.

Mr. Morrison

Yes, I understand that. The hon. Gentleman talked about pockets of unemployment that are two or three times higher than the national average. I do not think that that is true, but we can split hairs about that later.

The hon. Gentleman referred to the Youth Aid report. He said that he was worried about the 440,000 places that the Government have guaranteed for the youth opportunities programme, and whether they could be filled or properly administered. I have been asking the same question, and I gather that everything is under control.

Mr. Grant indicated dissent.

Mr. Morrison

I have been assured that that is so. I am sorry that the hon. Gentleman does not believe everything that he is told. I was concerned, I made enquiries, and I have told the House what I was told.

The hon. Member for Bristol, North-East (Mr. Palmer)' raised several important issues. He spoke about the Severn barrage. I gather that a report is shortly to be sent to my right hon. Friend the Secretary of State for Energy. I am sure that my right hon. Friend will consider it carefully. The hon. Gentleman asked whether the port area of Bristol could be an enterprise zone. As he knows, the Conservative Party is in favour of enterprise zones and the Labour Party is against them. It seems that he is somewhat at variance with his party.

Mr. Palmer

We must take advantage of any offer that is open to us.

Mr. Morrison

It is interesting that the hon. Gentleman is at such variance with his Front Bench colleagues. I cannot say what view my right hon. Friend the Secretary of State for the Environment will take. I am glad to have the hon. Gentleman's support in principle for enterprise zones.

In regard to the remarks of the hon. Member for Bristol, North-East about the decision to send Inmos to South Wales, has he talked to his right hon. Friend the Leader of the Opposition to find out whether he approves of the idea of bringing it back from South Wales to Bristol? I assure the hon. Member that I know Bristol. I grew up 30 miles from it and I accept everything that he says about the city. It is a remarkable city, with merchant venturers and so on. It has an unemployment level of 8.4 per cent., which is high, but as compared with other areas is not that high.

My right hon. Friend the Member for Taunton (Mr. du Cann) made what was to me the most important point of the whole debate when he talked about patriotism. I agree with him entirely that if any area, town or city that is fiercely proud of itself goes out to sell itself and all the facilities in its area it is much more likely to attract business and industry.

I also noticed my right hon. Friend's recommendation that there should be no Front Bench opening speeches and only winding-up speeches. I am sure that my right hon. Friend the Chief Whip has paid attention to that.

As the hon. Member for Truro knows, I visited Cornwall. It was the second regional visit that I made. I went to Merseyside first and them to Cornwall, because I was more than aware that the levels of unemployment were incredibly high and I wanted to see for myself. I had a very interesting and, one might say, depressing time.

Mr. Penhaligon

We are always delighted to see visitors. In the case of the hon. Gentleman can he say what he decided to do as a result of that visit?

Mr. Morrison

I went to have a look for myself just after I was appointed. It is reasonable to go and look for oneself. What I discovered were jobs that had not existed two or three years ago. I noticed that the hon. Member did not talk about the further jobs in J. I. Case or in Lee Cooper. To a certain extent he undermined the Comishmen. I saw them, as I met them, and they were very proud of their county. They followed exactly the line that my right hon. Friend the Member for Taunton was putting. They were not sitting there being gloomy. I can assure the hon. Member that I am more than aware of the problem.

My hon. Friend the Member for Falmouth and Camborne talked about an advisory body. As he developed his argument one saw more and more the point of what he was saying. I would have thought that in the initial stages this work could be co-ordinated by the county council, but that would be a matter for the county council rather than for my hon. Friend or myself.

I was interested to hear what my hon. Friend the Member for Plymouth, Drake (Miss Fookes) said about the work force in part of Plymouth getting new industry. I also agree with her that, over a period, if there is successful oil exploration Plymouth and Falmouth are bound to benefit substantially.

The hon. Member for Eton and Slough talked about what sounded like the devastation of Slough. As the hon. Member admitted, the unemployment rate is just over 6 per cent. Of course that is bad, but as compared with other parts of the country it is relatively not too bad. The hon. Lady did not remind us that there was some good news from Slough, too. Being a good constituency Member she will know that last year McMichael Radio took on 119 new employees, including 24 school leavers. The company hopes to expand its work force again this year by 15 per cent. It has fuller order books than ever before. That is backing success, and I am sure that the hon. Lady would want to back success as much as I would—

Mr. Penhaligon rose in his place and claimed to move, That the Question be now put.

Question put.That the Question be now put:—

The House divided:Ayes 4, Noes 56.

Question accordingly negatived.