HC Deb 04 June 1981 vol 5 cc1195-200

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

12.11 am
Mr. Lawrence Cunliffe (Leigh)

I should like to record my appreciation and gratitude to Mr. Speaker for graciously according me this Adjournment debate on a very important, significant and, as will be seen in the future, historical subject.

My purpose is to dot the i's and cross the t's in regard to the very serious unemployment problems in my constituency. The area also embraces a section of the constituency of my hon. Friend the Member for Newton (Mr. Evans). It will be a great privilege to hear him speak for a few minutes in the debate this evening about the problems that affect us and about the day-to-day issues with which we are dealing consistently as a result of the abysmal failure of the Government to follow any sensible form of industrial strategy.

I well remember attending a meeting of the North-West group of Members of Parliament at which the Secretary of State for Industry—now known only as the Secretary of State for Industrial Sterility—told us openly that the degrading of our area from intermediate area status as from 1 August 1982 was a sign of hope. Because of the number of industrial closures that have taken place within the Leigh travel-to-work area, however, that hope has been turned into hopelessness.

I should like to give three classic examples of very go-ahead industrial units which have shown the sort of enterprise of which the Secretary of State for Industry spoke. He referred to the extrapreneurial spirit that was imperative if we were to hold our own with our international competitors and to retain within world markets our commercial standing and our ability to win orders.

I wish to relate to the Minister examples of what has happened in the travel-to-work area. The Government's silly and suicidal economic policies have had an adverse effect on the welfare and the standard of living of the people represented by my hon. Friend the Member for Newton and me. Three closure announcements have been made within the last two or three weeks involving practically 1,000 workers. This means that by the end of June unemployment will have trebled in two years.

A classic example is textiles. Thirteen mills were operating within the Leigh constituency when I arrived at Westminster. Five have since closed and three are operating short-time working. Without the short-time working compensation scheme, many more jobs would have disappeared. That is probably the only point that I concede to the Government. Unit One of Carrington Viyella, the most up-to-date textile mill in Western Europe, is on short-time working. It has impeccable industrial relations. It has multi-shift working. Its unit production costs compare with those anywhere in Great Britain and Western Europe. It has, however, encountered unfair foreign competition, principally from the United States, where energy subsidies enable industrialists to charge competitve prices, in contrast to the "Queensberry Rules" that operate in this country.

The closure, recently announced, of the Sir John Holden mill with 230 employees and the situation at Unit One mean that they are the victims of unscrupulous tactics used by our competitive adversaries overseas. Another shock announcement is that BICC, whose chairman is Sir Raymond Pennock, president of the CBI, is to make 350 employees redundant within the statutory limit for notice of job cessation to be given to employees.

When great multinational companies with an international reputation for producing goods of the right quality at the right price cannot achieve the unit costs of foreign companies it is a terrible indictment of the Government's inability to provide some form of protection against unfair competition.

Only recently the BICC circular, "Focus on Leigh", said that teamwork is the keyword for 1981. It says: Despite many difficulties 1980 turned out to be a very successful year and credit for this must be given in no small part to Leigh employees at all levels for the high degree of cooperation and flexibility they provided over the year". It goes on to say that they will accept the challenge in 1981 of international competition. The paragraph known as the confidence paragraph says: Leigh's efforts have by no means gone unnoticed and as a result of our recent performance the Board has agreed to allow us to invest about three times as much on plant improvement and new material compared with 1980. This is a measure of the confidence which the company has in the Leigh Management and workforce". That was just two months ago. Now, we have the shock announcement that the company finds that the industrial recession is biting so deeply that orders have been reduced by 38 per cent. and that it must therefore take measures to reduce the labour force.

In 1980, the reasons given for a gloomy picture by management were as follows: the commercial manager—recession; the accountant—the strength of the pound; the works services manager—the energy cost gap; and the Vic Warr works manager—inflation. So there may be a combination of factors that derive directly from the Government's economic policy. This crazy policy of pursuing monetarist theories has now proved that when firms honestly try to compete they find it impossible to do so with the restraints and inhibitions imposed on them by the Government.

I take another firm, renowned in the automobile industry, which produces electrical harnesses—Ward and Goldstone. It makes electrical harnesses for Ford Cortinas, Fiestas, the Princess and others. I shall quote from a message sent on 12 February to all its members, employees and staff: Good news at Ward & Goldstone, Butts Mill—The company is pleased to announce that due to the sales success of British Leyland work they are able to reinstate the guaranteed working week for all its transport and general workers' employees —250 employees— effectively meaning an end to short time working. The statement has reminded the workforce that the efforts in both labour and management, over the past year, is only the starting point for the year to come. Yet the firm has announced only within the past 48 hours that the jobs of 300 employees are threatened because it is facing unfair competition, in the main, from Spain, Taiwan and the cheap labour markets. The firm's assessment is that on the year's turnover there will probably be a loss of about £700,000, and this loss would be returned every year thereafter. Obviously, the company could not allow this", and it would have to consider reducing its labour force by about 300 employees.

I am glad to say that, as a result of an agreement between the unions and employers, as temporary relief to parry immediate redundancies, short-time working compensation agreements will be applied to the firm. I hope that the Minister will be receptive to this. It is a classic case of a company which has endeavoured to meet the challenge of foreign competition on a fair basis and has been unable to meet that demand simply because the dice are loaded against it.

There is also the scandalous problem of youth unemployment within the Leigh travel-to-work area. Again, it is an indictment of the Government that youth unemployment in the area is running at between 15 and 20 per cent. and will certainly be 20 per cent. by the end of this month.

I therefore appeal to the Minister to ask his immediate boss to consider, because of the dire circumstances in which the area finds itself, giving full development area status to the part of the world represented by my hon. Friend the Member for Newton and myself. Having read out to the Minister the dictionary of disaster that has overcome the industrial work force in our area, I am convinced that no Government since the war have done so much to damage British industry in so short a space of time as the present Conservative Government.

Having said that, I appeal to the Minister seriously to consider the position that I and my hon. Friend put to him and our appeal for intervention and help to be given to our area.

12.26 am
Mr. John Evans (Newton)

I am grateful to my hon. Friend the Member for Leigh (Mr. Cunliffe) for allowing me to participate in this short debate. I congratulate him on promoting the debate on the vitally important subject of the serious and mounting unemployment problems deliberately created by the Tory Government for the people of his constituency and mine and, indeed, of every other parliamentary constituency in the North-West region. I also pay tribute to the splendid work that my hon. Friend does for his constituents in constantly seeking to protect them from the outrageous depredations of the Government.

Golborne and Lowton, in my constituency, are part of the Leigh travel-to-work area and, of course, many of my constituents work in Leigh. I should say that they used to work there, as many of them are now in the dole queue. The economic health of Leigh is therefore of vital importance to my constituents in that whenever closures or redundancies take place there some of my constituents lose their jobs.

There is not a great deal of employment in Golborne and Lowton, which tends to be a dormitory area for people working in surrounding towns, but the industry that we had has been crucified at the hands of the Secretary of State for Industry. Two major blows have been struck since this awful Government were elected.

First, there was the closure of Intex Yarns in two phases, with the loss of some 800 jobs. The closure of that plant signalled the virtual ending of my constituency's links with the textile industry.

The second major blow was the closure of Lowton Construction Limited, a stricken victim of high interest charges and the Government's ruthless decimation of the building and construction industry. More than 600 jobs disappeared with that closure.

Delecta Foods and Goodenough Pumps, excellent small firms, closed with the loss of more than 100 jobs. Redundancies at other firms, such as Rexpack and Unit Pallets, have all added to the mounting toll of unemployment deliberately created by the Government.

Unemployment was less than 6 per cent. when the Labour Government left office. It has now risen to 13.3 per cent. in the Leight travel-to-work area. Those grim figures mask the fact that male unemployment is even higher. Even worse, they mask the horrifying and, to my mind, frightening figures for youth unemployment, particularly among school leavers. I warn the House that unless the Government take action to get our young people into full-time, worthwhile employment in the immediate future the consequences will be disastrous for the future of our country.

I endorse my hon. Friend's plea to the Minister to use his good offices with the respective Secretaries of State to upgrade Leigh to the development area status that Wigan enjoys, reminding the Minister that Leigh is part of the Wigan metropolitan county district. I hope that the Minister will be able to be helpful to us tonight. We need all the help that we can get within the Leigh travel-to-work area.

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

As the hon. Member for Leigh (M r. Cunliffe) knows, I, too, have a constituency in the North-West. Like the hon. Gentleman and the hon. Member for Newton (Mr. Evans), I am well aware of the problems that unemployment has created in the North-West. I know them personally. My constituency may have a marginally lower unemployment rate than the constituencies of the hon. Members for Leigh and Newton, but I am aware of the difficulties that people are suffering as a result of unemployment. I am aware of the problems that are being suffered by their families and their children. The hon. Member for Leigh articulated extremely well the problems and the personal difficulties.

Unemployment in the Leigh travel-to-work area is running at a higher level than generally in the North-West. However, the current recession is the deepest since the 1930s. The hon. Member for Leigh will appreciate that the North-West has suffered more than any other area. Textiles in the North-West are experiencing special difficulties. I could give an analysis of the problems—perhaps not as well as the hon. Gentleman—and we could contiue discussing and debating them for a long time. It is easy to present an analysis of the problems, but it is more difficult to explain exactly how one will solve them.

The hon. Member for Newton, who is an eminent Member of this place, is the parliamentary private secretary to the Leader of the Opposition—

Mr. Frank R. White (Bury and Radcliffe)

Hear, hear.

Mr. Morrison

The hon. Gentleman sought to put the problem as well. I understand that he is in a difficult position. He is the PPS to the Leader of the Opposition and in the situation that exists in the Labour Party it must be difficult for him to know which way to turn. Is he to support the right hon. Member for Bristol, South-East (Mr. Benn), as he indicated by his speech? Is he to argue for mammoth intervention, as I understood him to advocate, or is he to argue in favour of the person to whom he is the PPS—the Leader of the Opposition?

The hon. Gentleman must be in an extremely difficult position. I understand why he has to intervene in a debate such as this. I understand the difficulties that exist in the Labour Party.

Mr. John Evans

The relationship that I have with the Leader of the Opposition has little to do with the problems of the Leigh travel-to-work area. There is no question about where my support and loyalty lie in terms of the Labour Party. It is with the leader of the Labour Party. I ask the Minister to stick to his brief and to refer to the problems of Leigh.

Mr. White

Is the hon. Gentleman a wet?

Mr. Morrison

I understand the problem of the hon. Member for Newton. I was somewhat bamboozled, but perhaps I was wrong.

Mr. White

Is the hon. Gentleman a wet or a dry?

Mr. Morrison

Was he arguing for mammoth intervention? According to him we must have a solution. That appears to be the solution that the right hon. Member for Bristol, South-East is proposing. I apologise if I misunderstood the position that he was putting before the House. However, he has put me right and we now know his position.

The hon. Member for Leigh explained that there are serious unemployment problems in his constituency. He blamed them on the Government's strategy. He says that we are following a monetarist strategy. I argue that we are following not a monetarist strategy but a commonsense economic point of view—namely, living within the family budget. No doubt we shall debate that in the House for a long time.

I appreciate the points that both hon. Members made about the Leigh travel-to-work area. The subject of Ward and Goldstone was raised. I understand that it is the second largest employer in the area and that it has given notification of 306 redundancies. I also understand that the company has already made an application under the temporary short-time working compensation scheme in respect of 250 workers. It is understood from the firm that it proposes to extend the scheme to cover all 306 jobs. My Department is considering the application for 250 workers. Assuming that the scheme is approved in respect of all 306 workers, there should be no redundancies.

There are signs that the economy is on the upturn. Inflation is falling and we are seeing more moderate pay settlements. In the last six months of 1980 the number of strikes was the lowest since and war and the number of days lost was the lowest since 1966. Many firms are finding new markets and making themselves more competitive both here and overseas. I hope that both hon. Members, who have understandably raised important constituency points, will realise that those two aspects of the economy are important in terms of jobs in the long term. We must be competitive, and firms must make profits. In addition, we must have firms that trade overseas.

I hope that both hon. Members will agree that it is important that new firms should come up. Inevitably, there is a wheel, and some firm will come up as others go down. The importance of the North-West is that small companies should be emerging. I understand that the local authority is engaged in the building of a small industrial estate of 18 units in Victoria Street for letting to small businesses.

I also understand that in Atherton six nursery units have recently been constructed, and all have been let. They are the seed corn of the future and, providing that they are successful, will offer many jobs. Whatever political philosophy we may follow, success matters when it comes to jobs. In addition, I understand that there is a National Coal Board project in hand for the opening of two opencast mining sites in the Atherton area. I do not know what will come of that, but if they go ahead more jobs will result.

I hope that both hon. Members will accept that the Government have already played a role in terms of financial assistance in the past two years. Under section 7 of the Industry Act financial assistance has been given to the tune of £1.4 million for four projects in the Leigh travel-to-work area, involving a total estimated investment of £8.7 million. The estimated number of jobs associated with those projects was 623. It would be wrong to suggest that the Government do not care. Government and taxpayers' money has been invested.

During the same period, £101,000 was offered under section 8 of the Industry Act for six projects involving a total estimated investment of £383,000. Again, that is an example of the Government's allocating taxpayers' money to the area. As for schemes that the Department sponsors, or that are sponsored under the remit of the Manpower Services Commission, the Government have a good record.

All is not entirely gloom and doom in the Leigh travel-to-work area. In the past year, 2,500 people found work through the jobcentres in the area, and we estimate that four times that number filled vacancies there. In other words, 10,000 people in the travel-to-work area found jobs in the year ending April 1981. That means that there is a volatility in the labour market and there are opportunities for the unemployed to find work. I accept that the situation would be better if the unemployment rate were lower, but jobs are available and will, I am sure, continue to be available.

The Department has a good record in terms of special employment measures. The youth opportunities programme has been successful. In the Wigan metropolitan district, which covers Leigh, about 3,200 young people entered the programme last year. This year the Manpower Services Commission is making available to its Manchester, West office—I cannot give the figures for the Wigan district, because they are not yet available—sufficient funds to provide opportunities for 12,000 young people.

We are concerned, as is the hon. Member for Leigh, about school leavers, and we are doing all that we can to ensure that their opportunities are as—

The Question having been proposed after Ten o'clock on Thursday evening, and the debate having continued for half an hour, MEMBERMR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at nineteen minutes to One o'clock.