Commons Sitting of 15 June 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  SOUTH YORKSHIRE BILL
  Read the Third time and passed.
Oral Answers to Questions
  WALES

    Unemployed Persons
    Mr. Ioan Evansasked the Secretary of State for Wales what is the latest figure available for the number of people unemployed in Wales, Mid-Glamorgan and Aberdare; and what percentage these figures represent of the working population.
    The Secretary of State for Wales (Mr. Nicholas Edwards): On 14 May 1981, there were 148,722 persons unemployed in Wales, 28,603 in Mid-Glamorgan and 3,451 in Aberdare; the equivalent of percentage rates of unemployment of 13·7 per cent., 14·8 per cent. and 15·8 per cent. respectively.
    Mr. Evans: How could the Secretary of State say at the weekend that Wales has come through the recession remarkably well when it has suffered more from unemployment that any other region in the United Kingdom, apart from the North, as the figures that he has just given show? Is he aware that this Government's policies have deliberately increased unemployment, so that it is far worse than in any other country in Europe?
    Mr. Edwards: I entirely repudiate the suggestion that the Government's policies have created the situation. Unemployment has risen under successive Governments. Competitiveness and the ability to produce goods are what is important. In my speech, I pointed out that other areas had seen numbers of jobs deteriorate faster. The Welsh share of United Kingdom unemployment has fallen from 6·3 per cent to 5·8 per cent. In view of our severe steel redundancies, it is clear that the other industrial sectors in Wales have stood up remarkably well.
    Sir Raymond Gower: I support and applaud the Government's initiative in retraining, the massive building of new factories and the administrative and budgetary changes to help small companies, and thus deal with unemployment, but will my right hon. Friend and his Cabinet colleagues remember, in their anxiety to help new small companies, not to neglect the interests and needs of older small companies, which are facing difficulties?
    Mr. Edwards: Indeed. A prime objective of the Government's policy has been to reduce public borrowing, and thus interest rates, and to create a situation in which the burden of taxation can also be reduced.
    Mr. Wigley: Is not the time ripe for a major capital investment programme, so that we can pay people to work on many much-needed projects, such as building new houses and roads in Wales, instead of leaving them rotting on the dole?
    Mr. Edwards: The trouble is that all programmes have to be paid for, but we have a substantial public expenditure and construction programme in Wales at present, which is by far the largest programme of site preparation, factory building and road construction so far undertaken in the Principality.
    Mr. Hooson: To complete the record, by how much did unemployment increase in Wales, Mid-Glamorgan and Aberdare under the previous Government?
    Mr. Edwards: Unemployment more than doubled under the previous Government, and trebled in the constituency of the present Leader of the Opposition, when he was Secretary of State for Employment.
    Mr. Alec Jones: How can the Secretary of State reconcile the figures that he gave and the fact that most knowledgable people in Wales expect unemployment to be worse by the end of the year with his statement at the weekend that Wales has come through the recession remarkably well? On what evidence did he base his statement, or was it merely based on optimism and ignorance?
    Mr. Edwards: I based my statement on the facts. The position in Wales has not deteriorated as fast as that in the United Kingdom as a whole. In the previous year, we allocated almost a record amount of new factory space in Wales. In the first five months of this year the number of formal applications was up on the same period last year, as was the number of inquiries and applications for selective financial assistance. Taken with the major package of expenditure on infra-structure, those factors hold out hope for the future. I am happy to be able to say, for example, that Alpha Electrostatic Flocking Ltd announced today that it is setting up a new factory in Bridgend on the Kenfig industrial estate; that is only one of many new companies that are coming into being.
    Several Hon. Members rose—
    Mr. Speaker: Order. This matter comes up again.
    Mr. Ioan Evans: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    Forestry Commission (Land)
    Mr. Colemanasked the Secretary of State for Wales what consultations he has had with the Forestry Commission concerning the sale of property and land in the ownership of the Forestry Commission.
    Mr. Nicholas Edwards: The land and associated property managed by the Forestry Commission is vested in the forestry Ministers, of which I am one, and not in the

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    commission itself. Ministers consult regularly with the commission on policy matters, including the disposal of land.
    Mr. Coleman: Is the right hon. Gentleman aware that an offer was made by the Forestry Commission and accepted by its tenants at Rheola in my constituency that they should be able to purchase their houses? Is he further aware that the offer has since been withdrawn and the tenants told that they must now negotiate with the Aberpergwm estate to purchase those houses? Will he investigate the matter so as to give these Forestry Commission tenants the same rights as he is forcing local authorities to give their tenants?
    Mr. Edwards: I shall certainly look into the matter that the hon. Gentleman has raised. I am not clear from his question whether he is suggesting that property which relates to a particular service, as in the case of the Forestry Commission, should in every case be disposed of to the tenants. That is clearly a matter in which one must consider the circumstances of the case.
    Mr. Hooson: As the Forestry Commission has been in existence for more than 60 years, is not it reasonable that the new Forestry Act should have brought about some turnover in the capital invested in various forms of forestry?
    Mr. Edwards: I am anxious to see an expansion of forest planting. I believe that the best way to achieve this is to make some use of the existing assets and to make the best possible use of the financial resources available.

    Unemployed Persons
    Mr. Barry Jonesasked the Secretary of State for Wales what is the number of people out of work in Wales; what is the increase in the number of jobless since May 1979; and if he will make a statement.
    Mr. Hudson Daviesasked the Secretary of State for Wales what is the total number of unemployed persons in Wales; and what is the percentage increase in the numbers unemployed in Wales between May 1979 and May 1980 and between May 1980 and May 1981.
    Mr. Nicholas Edwards: On 14 May 1981, registered unemployment stood at 148,722, an increase of 65,698 over the total at May 1979. Between May 1979 and May 1980 and between May 1980 and May 1981, levels of unemployment increased by 16·9 per cent. and 53·3 per cent. respectively. Taking the period as a whole, the increase was 79·1 per cent.
    Mr. Jones: Can the right hon. Gentleman yet give us any news about the Nissan-Datsun project? Can he assure us that it will come to Wales? Is he aware that 7,854 Deeside citizens are now out of work, some 40 advance factories are empty and an army of young people are leaving school next month? What hope is there of work for the people on Deeside?
    Mr. Edwards: The Nissan company has said that it will probably announce its general intention as to the investment, although not necessarily the site chosen, by the end of July. I cannot give any further information about the project. I understand the difficult situation on Deeside. I was therefore pleased that Mr. Cotterill, the local director, could speak of record output at Shotton and a full
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    order book. I am also glad to tell the House that Metal Improvement Company Inc. is occupying a 45,000 sq. ft. factory at the Deeside industrial park to make products relating to the A310 airbus.
    Mr. Hudson Davies: Is the Secretary of State aware that the figures that he has given represent a deplorable record of a worsening situation? On a more intimate level, will he concede that, for the 28,603 unemployed in Mid-Glamorgan, the number of jobs available in the same area was 505, which means that only one in 56 has any hope of finding a job? On an even more intimate level, does he further agree that in Rhymney Valley and Caerphilly only one in 80 would have any hope of finding a job? How does he reconcile that with his assertion that Wales has come well through the recession?
    Mr. Edwards: I do not wish in any way to understate the difficulties. Nevertheless, in Mid-Glamorgan, as elsewhere, the number of factory allocations has risen, there is a considerable number of inquiries and there are advance factories ready. In the hon. Gentleman's own locality, which he cited, some companies are doing extremely well. A Pengam based company, Morris Cohen (Underwear) Limited, has just taken additional factory space from the Welsh Development Agency, as it intends almost to double the number that it employs.
    Sir Anthony Meyer: How many existing jobs would be at risk and how many potential jobs would be lost if the Labour Party were ever in a position to carry out its threat to withdraw from the EEC, to which 42 per cent. of British exports now go?
    Mr. Edwards: It would be a total disaster for inward investment in Wales. Most overseas companies would clearly no longer be interested in setting up their plants in Wales. There is the added threat in the Labour Party's programme that, whenever a grant for regional policy assistance is given, it would insist upon a compulsory shareholding in the company. I cannot think of a more disasterous proposal for the future of regional policy in Wales.
    Mr. Geraint Howells: In view of the seriousness of unemployment in many parts of Wales, has the Secretary of State any encouraging news to give to school leavers in Wales this summer?
    Mr. Edwards: I have tried to paint a balanced picture of a serious problem, in which, in the middle of a recession and a time when on past experience regional policy would not be expected to have much effect, we are none the less allocating almost a record number of new factories, the number of new jobs coming into being is very large and there has been a huge upsurge during the first part of this year in the number of inquiries to the small firms service, which is of particular significance in a constituency such as the hon. Gentleman's.
    Mr. Anderson: Whenever I and my colleagues from Mid-Glamorgan have seen the Secretary of State about reassessment of our regional development status, we have been told that the situation is being monitored and, in effect, that unemployment would have to become worse. Is not it now clear that unemployment is getting worse as certainly as night follows day, to quote the Chief Secretary to the Treasury? When, therefore, may we expect a reassessment of our regional development status?
    Mr. Edwards: We have said that we are keeping the situation under review. There is no doubt that there is a serious problem in that part of the country, but there is also, I am sorry to say, a serious problem in other parts of the United Kingdom. We cannot look at a particular travel-to-work area in isolation. If the area were upgraded, there would be a much larger number of upgradings in England, which might not be to the benefit of Wales.
    Mr. Best: Is not it particularly significant that, whenever there are questions to the Secretary of State for Wales, Labour Member home in on the unemployment statistics? When will they wake up to some of the good things that are happening in Wales? Will my right hon. Friend publish the number of jobs being created in Wales, the number of advance factories being let and the upturn of confidence in Wales? Finally, does he agree that everything that has been said so far by Labour Members will do nothing but create further gloom in Wales and further depress business confidence when that is the opposite of the reality?
    Mr. Edwards: I have been publicising those very figures. I also intend to publicise the huge burden of additional cost which "Labour's Programme for Wales" would place upon industry and the particularly disastrous proposal which would ditch regional policy in Britain, including Wales.
    Dr. Roger Thomas: Will the Minister, in the light of the irridescent optimism displayed by his speech at Llandrindod Wells, cast caution to the winds and say by how many thousands he expects unemployment in Wales to have fallen when the next figures are announced?
    Mr. Edwards: I have always made it absolutely clear that I expect the present rise in unemployment to continue for a period. All the history shows that that is the likely pattern of events. But Wales is particularly well placed, with its attractive infrastructure and good industrial relations, to be ready when the upturn comes. If the hon. Member would say more about the splendid industrial relations performance in many companies in Wales, he would do more good for his country than he does by the sort of comments that he makes.

    Royal Regiment (Departmental Leave)
    Mr. Abseasked the Secretary of State for Wales on how many occasions in the last year officials in his Department have been granted special leave for training with the 3rd or 4th (Volunteer) Battalions of the Royal Regiment of Wales.
    Mr. Nicholas Edwards: None, Sir.
    Mr. Abse: Will the Secretary of State continue in that policy and also bring home the Welsh boys who are in the Welsh regiment in Northern Ireland? Why should our boys, some of whom have joined the Forces under the intolerable pressures of Government—
    Mr. Speaker: Order. The hon. Gentleman's question is directed to the wrong Minister. That is a defence matter. The Secretary of State can be questioned only on the matters for which he is responsible.
    Mr. Abse: May I ask the Secretary of State to continue in that policy, in order that it should be made clear that there is an opinion in Wales that the boys in Northern
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    Ireland should be brought home, and in order that they should not be exposed to the vicious hazards to which they are exposed as a result of the overbearing attitude of the hon. Member for Antrim, North (Rev. Ian Paisley) and his ilk, who are accusing the—
    Mr. Speaker: Order. The Secretary of State.
    Mr. Edwards: I would normally grant any reasonable application for leave to serve with the territorial forces, and I believe that it would be the view of most people that it is right that the British Army should seek to maintain law and order in the United Kingdom, and as much in Northern Ireland as it might be expected to do in Wales or anywhere else.
    Mr. Best: Will my right hon. Friend acknowledge the need to facilitate training with the Territorial Army? Is he aware that many young men who are married have to take time off their annual leave to go on a Territorial Army camp? Will he ensure that that policy does not apply to any extent in his own Department, and that members of it will be given additional time to that to which they are ordinarily entitled as annual holiday?
    Mr. Edwards: The terms and conditions under which civil servants are allowed leave are laid down in the Civil Service pay and conditions code. Clearly, the drawing up of that code is not a matter for which I am responsible. However, I repeat that, when applications are made in accordance with that code, I shall be happy to see that they are granted, and to give every encouragement to military service of that kind.

    Council House Sales
    Sir Anthony Meyerasked the Secretary of State for Wales what discussions he has had with local authorities in Wales who are experiencing difficulties or delays over the sale of council houses; and what steps he proposes to take in order to ensure that tenants are able to exercise their rights under the Housing Act 1980 to purchase their council houses.
    The Under-Secretary of State for Wales (Mr. Wyn Roberts): Welsh Office officials have discussed with the local authorities concerned cases where delays have been reported. While I hope and expect that such action will prove unnecessary, my right hon. Friend will not hesitate to use his powers of intervention under section 23 of the Housing Act 1980 if tenants are being prevented from exercising their statutory rights effectively and expeditiously.
    Sir Anthony Meyer: Will my hon. Friend make it plain to the many people in the borough of Rhuddlan w ho have written to me complaining about interminable delays over the purchase of their council house that they will not have to wait much longer and that they will not have to pay any more merely because the council appears to be having difficulties in finding enough expert manpower to carry through the sales?
    Mr. Roberts: The Welsh Office is studying information about the progress being made by Rhuddlan and will be in touch with the authority again as necessary. It is up to local authorities to arrange the staffing so that they can carry out sales under the Housing Act effectively and expeditiously.
    Mr. Alec Jones: Will the Minister confirm that the numbers of local authority staff employed in housing services in Wales fell by 2·6 per cent. between December 1979 and December 1980? How, then, can the Minister expect local authorities to reduce their staffs even further and at the same time accept extra duties imposed on them by the Act? If the Minister is so keen on his policy of compulsory sales, will he agree that, if councils employ more staff to do the work, or even farm the work out, he will meet the full bill?
    Mr. Roberts: The reduction in local authority staff that has taken place is very small compared with the reduction, for example, in Welsh Office staff. We are here dealing with a statutory right on the part of tenants. Surely the right hon. Gentleman is not giving any encouragement to local authorities not to grant that statutory right. The deployment of their staff is entirely a matter for them.

    Schools (Microprocessors)
    Mr. Tom Ellisasked the Secretary of State for Wales how many schools in Wales are using microprocessor systems and software in teaching information technology.
    The Under-Secretary of State for Wales (Mr. Michael Roberts): Some 70 per cent. of maintained secondary schools in Wales offer computer studies courses. Roughly two-thirds of these are thought to have microcomputers and the remainder have access to a mainframe computer.
    Mr. Ellis: Is the Minister aware that a microcomputer manufactured in my constituency and available at competitive prices can be used with systems and software which are already in use in Wales, whereas the RML microcomputer, approved by his right hon. Friend the Secretary of State for Industry, cannot be so used? Will the Minister have a word with his right hon. Friend to see whether the manufacturer in my constituency is discriminated against, and why his right hon. Friend is setting up a system under which taxpayers' money is likely to be wasted?
    Mr. Roberts: There is no question of taxpayers' money being wasted. The microcomputer scheme in schools will be of enormous benefit to schools throughout the United Kingdom. My hon. Friend the Minister for Industry and Information Technology explained that equipment for the scheme was chosen on grounds of technical, educational and financial merit, and that additional machines cannot be considered for inclusion in the present phase of the scheme. But for future phases—there will be future phases—I shall draw his attention to the point made by the hon. Member.
    Mr. Garel-Jones: Is my hon. Friend aware that hon. Members representing English seats recently received from the Department of Education and Science a letter drawing to our attention the fact that the Government intend to have a microprocessor in every secondary school in the United Kingdom, and giving details of schemes that the Government have to promote this end? Will he confirm that those details have also been sent to hon. Members representing Welsh constituencies? If not, will he look into the matter and ensure that they are sent?
    Mr. Roberts: The scheme is for the whole of the United Kingdom, and Welsh authorities have received the same letter.
    Mr. Wigley: The Under-Secretary mentioned that about 70 per cent. of schools may already have micro-processors installed. Will he give an assurance that those schools which have already taken an initiative in this matter and may have devices which are useful, but not up to the standard of those now being supplied, will not be penalised because they have already taken the initiative?
    Mr. Roberts: There is no question of penalising any school in the United Kingdom, but priority will be given to providing microcomputers for those schools that lack them at the moment.
    Dr. Roger Thomas: Is the Minister aware that, to take full advantage of the microprocessors and computers in our schools, urgent steps should be taken to answer the prevalent complaint that there is a distinct shortage of mathematics and physics teachers? Will he agree that, without those teachers, we cannot take full advantage of high technology in our schools?
    Mr. Roberts: It is true that over the last six or seven years a serious shortage of mathematics and physics teachers has developed in our schools. We are already taking steps to put that matter right.

    Council House Sales
    Mr. Bestasked the Secretary of State for Wales how many applications were made by secure tenants to buy their public sector dwellings in Wales in the first quarter of 1981; and what proportion of the total of public sector tenants have now applied for the right to buy in Wales.
    Mr. Wyn Roberts: Approximately 17,000 right-to-buy applications were made in the first quarter of 1981; most will have been made by secure tenants but it is not possible to distinguish these. By the end of the first quarter of this year a total of 28,000, representing almost one-tenth of public-sector tenants in Wales, had applied to buy their homes.
    Mr. Best: Does my hon. Friend agree that it is most encouraging that so many people in Wales are aware of the great benefits of home ownership and of the great opportunity—which represents perhaps the biggest social advance in housing this century—that the Government have given them? My right hon. Friend the Secretary of State has reserve powers to enforce sales if local authorities are recalcitrant and do not carry out the letter of the law. Will my hon. Friend tell the House how his Department monitors whether there are difficulties at local authority level? Only the other day those of us who serve on the Select Committee on Welsh Affairs received evidence from his officials that the only way that his Department gained such information—
    Mr. Speaker: Order. The hon. Gentleman is arguing the case. He should be seeking knowledge, not imparting it.
    Mr. Best: I am obliged, Mr. Speaker. Such information comes to light only because people write to his Department—
    Mr. Speaker: Order. I was disobliged.
    Mr. Roberts: I welcome my hon. Friend's initial point and the fact that so many people in Wales have seen fit to apply for the right to buy and wish to own their own homes. However, we are not monitoring individual right-to-buy applications. We are dealing with complaints as they are made. So far we have received about 160 complaints, which we are following up with the authorities concerned. There is not an authority in Wales that is not actively carrying out the provisions of the Housing Act. At present, my right hon. Friend does not have to use his powers under section 23.
    Mr. Alec Jones: Does the figure of 17,000 mean that there have been 17,000 firm applications to buy, or that mere initial inquiries have been made? What possible advantage can there be to local authorities, ratepayers, or even taxpayers, to sell a council house—according to the figures that the Minister gave me—for £6,208 when it costs a council £17,065 to replace it?
    Mr. Roberts: I confirm that up to 31 March 1981 the number of right-to-buy applications was 28,206. There are benefits for tenants who become home owners and, as the right hon. Gentleman knows, there are enormous potential benefits for local authorities—as they witnessed last year when they sold council houses—because they can use part of the net capital receipts to meet other housing needs.

    Agricultural Department (Staff Transfers)
    Mr. Geraint Howellsasked the Secretary of State for Wales if he has any plans to use compulsory powers to transfer staff against their wishes from the Welsh Office agricultural department in Aberystwyth to Cardiff; and if he will make a statement.
    Mr. Nicholas Edwards: As the House knows, all administrative and executive staff in the Civil Service may be required to move to other posts. I expect eight staff to be moved to Cardiff as a result of the transfer of work; three have volunteered and of the remaining five, two have objected on grounds of hardship. Cases of hardship will be considered by a committee on which the trade union side will be represented.
    Mr. Howells: I am sure that the Secretary of State was surprised when he was told that the majority of his staff would not voluntarily move from Aberystwyth to Cardiff. We are all well aware that they have the right—
    Mr. Speaker: Order. The hon. Gentleman is also arguing his case. I should be much obliged if he would ask a question.
    Mr. Howells: I apologise, Mr. Speaker, but it happens to be one of those days. I am sure that the Secretary of State is aware that the staff have the right to appeal. If they fail to prove hardship, what is the alternative? Will they be made redundant, or what?
    Mr. Edwards: Clearly, the hon. Gentleman did not listen to my answer, because he spoke about a "majority." I said that two objections had been received on the ground of hardship. They will be considered by the appeal committee, on which the trade union side is represented. Generous financial help is given to officers who have to move to take up duties. As I said, administrative and executive staff in the Civil Service may be required to move to other posts if necessary.
    Mr. Best: Is my right hon. Friend aware that the farmers of Anglesey are pleased about his decision that Anglesey is to be included in the marginal land survey?
    Mr. Speaker: Order. Perhaps the Secretary of State can tell me whether that has anything to do with the question. I think not.

    Welsh Development Agency
    Mr. Wigleyasked the Secretary of State for Wales if he will introduce new measures to improve the effectiveness of the Welsh Development Agency.
    Mr. Nicholas Edwards: The agency is providing a wide range of services within the guidelines laid down by the Welsh Office, and is doing so very effectively.
    Mr. Wigley: Is the Secretary of State aware that many small companies are being frustrated in their dealings with the agency, particularly as it appears to scrutinise investment applications of a few thousand pounds for small companies in the same way as it considers £2 million applications? Will the right hon. Gentleman guide the Welsh Development Agency about whether it is reasonable to have different criteria for investment in small companies—particularly new companies without track records—and to take a slightly greater risk with them than with the £2 million investments of the P. Leiner type?
    Mr. Edwards: I know of two cases about which the hon. Gentleman has complained. I have looked into both of them, and I believe that there are no grounds for complaint. In one case financial assistance was offered, and in the other an allocation was made to a factory within seven weeks of the first meeting with the company. About 32 Gwynedd-based companies have received assistance from the agency. Many cases are being dealt with. In addition, eight factory allocations have just been announced in Gwynned.
    Mr. Abse: Does the Secretary of State not feel any need for penitence or a sense of guilt? Is it not a fact that the millions of pounds that were placed at the disposal of the Welsh Development Agency to develop factories have been spent and that unemployment is mounting at a catastrophic rate? Does that not demonstrate that the moneys at its disposal and the investments that have been made are inadequate, and that the Select Committee's view that too little was being spent too late is correct? Does that not show that, as ever, the Secretary of State has been proved wrong in his rejection of the Select Committee's recommendations?
    Mr. Edwards: I note that the hon. Gentleman is in his usual role of the Rebecca of Welsh politics, and is even more inaccurate than that journal. The Welsh Development Agency has undertaken a substantial programme extremely successfully.
    Mr. Barry Jones: Given the horrendous number of redundancies raining down on Wales, should not the Government consider giving stronger powers to the agency in order to create jobs? Will the right hon. Gentleman bear in mind the fact that at Flint and Holywell, in my constituency, male unemployment stands at approximatly 38 and 24 per cent? The agency does excellent work, but will the Secretary of State consider giving it more powers?
    Mr. Edwards: I am grateful to the hon. Gentleman for his acknowledgement of the good work that the agency has

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    undertaken, particularly in its factory building programme. I have not restricted the agency, and its policy has not restricted a willingness to go ahead with investment projects where potentially viable projects are on hand. However, successful and potentially successful companies must come forward.
    Mr. Alec Jones: Despite the figures that the Secretary of State has given today, has he seen the 12 June edition of Estate Times, which contains an advertisement from the Welsh Development Agency saying that more than 100 fully serviced units are available, and that by the end of the year it expects to have an extra 350? Is the right hon. Gentleman satisfied that the agency has sufficient powers to fill those factories and, at the same time, to provide the necessary assistance to existing industry?
    Mr. Edwards: We have always made it clear that the major problem for the following year would be how to fill the massive number of factories that have been built. The right hon. Gentleman has effectively made nonsense of the question asked by the hon. Member for Pontypool (Mr. Abse), who moments ago argued that the programme was inadequate. The right hon. Gentleman is now complaining that there are too many empty factories.
    Mr. Wigley: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply—in fact it was no reply at all—I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible opportunity.

    Housing Policies
    Mr. Andersonasked the Secretary of State for Wales if he is satisfied with the results of the Government's housing policies in Wales.
    Mr. Wyn Roberts: I am satisfied that the Government's policies are correct; but it is much too early to have achieved all the results we want.
    Mr. Anderson: Is the Minister aware of some of the results that he is achieving? Does he realise, for example, that starts in the public sector in the last quarter fell by over 50 per cent compared with the same quarter in 1980? Is he not getting the message from directors of housing and his counsellors that not only new builds, but rehabilitation and improvement grants are in decline and that homelessness is increasing substantially in the Principality? In the light of the results, how can he justify housing taking a disproportionate share of the cuts?
    Mr. Roberts: The hon. Gentleman has been selective in his choice of figures. I grant that the halving of public sector starts as between one quarter and another corresponds with the halving of completions between 1975 and 1979. However, the hon. Gentleman forgot to tell the House that completions in the three months ending 30 April 1980 were 2,072, whereas completions in the three months ending 30 April 1981 increased to 2,282.
    Mr. Best: Will my hon. Friend do more to encourage local authorities to take up the Government's excellent improvement for sale scheme and try to make further inroads into dealing with the problem of the 100,000 houses in Wales that are unfit in some material respect? Will he acknowledge that the Government have the schemes, and that it is for local authorities to implement them?
    Mr. Roberts: We have reserved £1·5 million to provide pump priming for the improvement for sale operation. My hon. Friend will know that the Government have a seven-point low-cost home ownership plan that involves improvements of all sorts to existing properties.

    Tourism (Mid-Wales)
    Mr. Delwyn Williamsasked the Secretary of State for Wales what steps the Government have taken to promote tourism in Mid-Wales.
    Mr. Wyn Roberts: The Government continue to support the Wales Tourist Board, whose promotional and marketing work fully recognises the potential of Mid-Wales. In addition, the Welsh Office has secured aid from the European regional development fund for tourism infrastructure projects in the area.
    Mr. Williams: Is my hon. Friend aware that Mid-Wales is the most beautiful part of the United Kingdom? Does he realise that that statement was a commercial for the holiday season? More seriously, will he accept that grants for the tourist industry can only help the service industry and alleviate such unemployment as exists in the region?
    Mr. Roberts: As my hon. Friend knows, I spent part of the weekend in Mid-Wales. Its natural beauty was enhanced by the presence of the Conservative Party conference. Tourism provides much employment in Mid-Wales, and over the past two years the area has received £300,000 in grants under the tourism development scheme, and £200,000 in loans.
    Mr. Hudson Davies: As the assistance that the Wales Tourist Board has been able to give to Mid-Wales and to the whole of Wales has been provided under section 4 of the Development of Tourism Act 1969, will my hon. Friend give an undertaking that if and when the Government publish their review of regional status and any part of Wales loses its assisted area status he will devise a means whereby the board can continue to give section 4 assistance? Will he ensure that it will not be disqualified from doing so by any reduction in assisted status?
    Mr. Roberts: I assure the hon. Gentleman that that issue is under consideration.

    Enterprise Zones
    Mr. Hoosonasked the Secretary of State for Wales what progress has been made in developing the enterprise zone concept in Wales; and whether he will make a statement.
    Mr. Nicholas Edwards: The Lower Swansea Valley enterprise zone designation order came into effect on Thursday 11 June—the first zone to be established in the United Kingdom.
    Mr. Hooson: I congratulate my right hon. Friend on Wales being the first base for one of the new enterprise zones. How many inquiries have been received from businesses that are interested in establishing themselves in the zone?
    Mr. Edwards: Congratulations should go also to the local authority concerned, which has given its wholehearted backing to the project. I am glad to say that 38 firms have agreed terms with Swansea so far and that nearly 300 inquiries have been received.
    Mr. Anderson: When the right hon. Gentleman comes to monitor the success or otherwise of the zone, will he consider not only the number of jobs created within the zone, but the effect on the immediate hinterland.
    Mr. Edwards: Of course I shall. I have always said that it is an experimental scheme. I shall have to see exactly how it operates in practice. I think that the Swansea authority shares my confidence that the zone will benefit the area.

    Water Charges
    Sir Raymond Gowerasked the Secretary of State for Wales if he will take steps to remedy the anomaly whereby there is no reduction of the water charge in the case of a house or bungalow which lacks any bathroom.
    Mr. Wyn Roberts: No, Sir. The lack of a bathroom would be reflected in the rateable value of the property, on which charges for water services are at present generally based.
    Sir Raymond Gower: I am asking my hon. Friend to alter that undesirable state of affairs. Does he not appreciate that, by definition, houses of this sort would probably be occupied by poor people, disadvantaged families and be a section of the community that is obviously declining in numbers? Would it not be a great advantage if the Government framed policies to do what I ask? Does my hon. Friend appreciate that that would give the maximum help to those who need help most, without great expenditure?
    Mr. Roberts: Levying according to the number of water fittings and appliances in a property was considered by the National Water Council. I direct my hon. Friend to the publication entitled "Charging Households for Water". The council observed that there would be considerable difficulty in making and continuing assessments.
    Sir Raymond Gower: Nonsense.

  House of Commons

    Trade Unions
    Mr. Canavanasked the right hon. Member for Middlesbrough, as representing the House of Commons Commission, whether pursuant to his reply to the hon. Member for West Stirlingshire on 11 May he will arrange to meet trade union representatives of employees of the House of Commons Commission.
    Mr. Arthur Bottomley: The Commission has not yet had an opportunity to consider the report of the consultants, which has been submitted in the last few days. It would therefore be premature for me to say whether or not, in the Commission's view, a meeting with trade union representatives will be necessary.
    Mr. Canavan: Is my right hon. Friend aware that, contrary to the reply that I received from the hon. Member for St. Albans (Mr. Goodhew) last month, the trade union
    724
    representatives are far from satisfied? They do not understand precisely what is going on. As consultations on the grading review are being broken off unilaterally by the Commission, which has given no indication where it will proceed from its present position, would it not be fairer, and in the interests of all concerned, for a meeting with the trade union representatives to be called as soon as possible? This is a shocking way for the House of Commons to be treating its employees.
    Mr. Bottomley: With respect to my hon. Friend, that is not so. The Commission believes that it is in everyone's interests that the final report of the consultants, which has already been delayed for a considerable period, and which will take twice as long to be presented as was expected, should be expedited.
    Mr. Michael Brown: How many of those employed by the House of Commons Commission are represented by trade unions?
    Mr. Bottomley: I cannot give the exact figure. However, I am satisfied that the majority are so represented.
    Mr. Alan Williams: Does my right hon. Friend agree that many statutory rights that have been introduced by the House for workers throughout the country generally are denied to servants of the House, some of whom are without negotiated agreements? Will he arrange to have published in Hansard the instances where statutory rights are not being given to servants of the House and specify whether that is the result of negotiations with the unions or whether there has been no such agreement?
    Mr. Bottomley: This is the position in which public servants generally find themselves. For example, they cannot stand for election to local authorities in which they are employed. There are many other reasons why public servants should obtain better representation. That is a matter for the trade unions to pursue themselves. I take note of what my right hon. Friend has said.

  Education and Science

    Public Lending Right
    Mr. Moateasked the Secretary of State for Education and Science if the latest proposals for public lending right include reference books and those purchased by educational bodies.
    The Minister for the Arts (Mr. Paul Channon): There has been no change in these aspects of the proposals. The Public Lending Right Act 1979 extends only to the United Kingdom local authority lending libraries. Libraries in educational establishments will not be included in the scheme.
    Mr. Moate: Is it not extraordinary that a scheme that pretends to give justice to authors excludes a large proportion of them? Is it not time that my right hon. Friend was frank and told the House that he knows that the scheme that he inherited is absurd, unjustifiably expensive to taxpayers and should be decently buried?
    Mr. Channon: My hon. Friend has been an opponent of public lending right for many years. I strongly respect his views, but I do not share them. I supported the Bill when it went through the House, although I am sure that

    725
    it could have been improved. I hope that shortly I shall be able to publish a consultative document to give the House an opportunity to consider the scheme, including all the points that my hon. Friend has raised.
    Mr. Faulds: Does the Minister agree that in principle, and at some convenient date, reference works and those purchased by educational bodies should be included in the coverage of public lending right, whatever amendment that may need when that happy eventuality comes about?
    Mr. Channon: I do not think that the House would expect me to amend an Act that has not yet come into force. I am not sure that I shall get parliamentary time even were I to try to do so. It would be wise if the House would wait for not much longer, when hon. Members will receive the consultative document.
    Mr. Greenway: Is it not true that authors have had to wait for far too long for the establishment of a public lending right? May I have my right hon. Friend's assurance that something will be done before the end of the year?
    Mr. Channon: Something will certainly be done before the end of the year. I share my hon. Friend's view and hope to make an announcement soon; for example, about the appointment of a registrar.
    Mr. English: Now that we have statutory protection for authors, will the Government, who purport to believe in a free market, abolish resale price maintenance for books?
    Mr. Channon: That is a different question, and not one for me. It relates to the controversy of many years ago, when the matter was discussed by the House.
    Mr. English: It is the responsibility of the right hon. Gentleman's Department.
    Mr. Channon: It is not the responsibility of my Department. I note the hon. Gentleman's view, but I have nothing further to say on that topic.

    Railway Preservation
    Mr. Adleyasked the Secretary of State for Education and Science what recent steps he has taken to promote railway preservation as part of the national heritage.
    Mr. Channon: My responsibilities in this field are related only to the interests of museums, but I am most anxious to promote railway preservation and would gladly welcome any suggestions by my hon. Friend.
    Mr. Adley: Is my right hon. Friend aware that the Manpower Services Commission has decreed that the youth opportunities programme and the community enterprise programme are appropriate for railway preservation purposes? As millions are interested in the subject, will my right hon. Friend, as Arts Minister, give voice to their interest and enthusiasm by letting them know from time to time that the Government are interested in their activities?
    Mr. Channon: I am aware of that, and I pay tribute to my hon. Friend's interest and activity in the matter. Hon. Members interested in steam locomotives will be glad to know that of the number of preserved locomotives in Western Europe about one-third are in the United Kingdom. There is a great deal of interest by thousands of people in this country.
    Mr. Bidwell: Is the Minister aware that the railway preservation movement is gathering steam all the time? I speak as a former railway shunter and goods guard. Is the Minister aware that I buttress the remarks of the hon. Member for Christchurch and Lymington (Mr. Adley) and request the Minister to persuade local authorities to assist such activities?
    Mr. Channon: I am strongly in favour of that. As the House knows, a large number of British Rail locomotives are stored at Barry, in which my hon. Friend has taken an interest. There is shortly to be another visit to Barry by those concerned, and if my hon. Friend or any hon. Member wishes to join that group he will be most welcome.
    Mr. Anderson: Is the Minister aware that Sir Peter Parker has said that there will be no new investment in British Railways this year? Unless the Cabinet makes a decision this week on rail electrification, there will be more candidates for his museums.

    British Library
    Mr. Dobsonasked the Secretary of State for Education and Science if he will make a statement on plans for the new British Library.
    Mr. Channon: Preliminary work for the first sub-stage of the Euston Road building is now in hand, and I expect work on the site to begin early in 1982.
    Mr. Dobson: How soon does the Department expect to release the 3 acres at the back of the site, which are not required for library purposes, so that they can be used to provide parks, open spaces and other amenities for the deprived neighbourhood at the back of the proposed library?
    Mr. Channon: I shall examine that and write to the hon. Gentleman. I assure him that I shall do everything that I can to assist him.
    Mr. Moate: Why should millions of books in the British Library be excluded from public lending right?
    Mr. Channon: Because Parliament decided that they should be.

    Arts Council (Grant)
    Mr. Freudasked the Secretary of State for Education and Science when he expects to announce the Arts Council grant for the financial year 1982–83; and if he will make a statement.
    Mr. Channon: As soon as is practicable.
    Mr. Freud: I thank the Minister for that inspired reply. Will he accept that successful administration of the arts is dependent upon planning, and that planning by the arts is difficult unless the announcement of the amount of finance available is given priority?
    Mr. Channon: I agree with the hon. Gentleman that it would be nice to make earlier announcements about available grants. My predecessor was able to do so last December. That was an earlier date than usual, but the difficulty is that it is impossible to make announcements until Ministers have collectively decided all those matters and until detailed negotiation has taken place. I shall do what I can to be helpful and speedy, but I do not wish to raise hopes that I can be quicker than that.
    Mr. Stokes: At this time of financial stringency, can my right hon. Friend give me an assurance that finance for the arts will be as strictly scrutinised as finance for defence?
    Mr. Channon: Finance for the arts will, as always, be extremely strictly scrutinised. I know of my hon. Friend's concern, but he will agree that, for the overwhelming majority, there are immense advantages in the money spent on the arts. There is general agreement in the House that that should continue.
    Mr. Robert Sheldon: Will the Minister take up the suggestion that he made earlier about discussing with the Arts Council the various grants that it makes and ask it to review the amount that it is withholding from, or will not spend on, the D'Oyly Carte Opera Company? Is he aware that many in the North-West have their first contact with opera through D'Oyly Carte? That is important to the North-West, although it may not seem so in London.
    Mr. Channon: I understand the right hon. Gentleman's view about the importance of D'Oyly Carte to many sections of the population. However, it has never received a grant from the Arts Council. It has asked for a substantial grant at a time when the Arts Council grant, although substantial, is being held steady. It is difficult to take on new commitments, and the Arts Council has taken the view that it is wrong to do so. I have already discussed this with the chairman, but, in view of the right hon. Gentleman's concern, I shall raise it again.
    Mr. Blackburn: In carrying out a review of his estimates, will my right hon. Friend bear in mind the essential value of, and the vital role played by, the arts in tourism? Is he aware of the arts' earning capacity for this country? Will he give an assurance that in his considerations he will bear in mind the important role of the arts in tourism?
    Mr. Channon: That is correct. Millions of tourists visit our national collections, stately homes and go to West End and other theatres. I agree with my hon. Friend.
    Mr. Faulds: With the impact of inflation and the increasing demands on the Arts Council, should not the right hon. Gentleman consider a supplementary Government grant to fund organisations such as the D'Oyly Carte Opera Company, the National Youth Orchestra, the Old Vic and other well-deserving projects that are likely to collapse in the present and foreseeable economic circumstances?
    Mr. Channon: As the hon. Member knows, the National Youth Orchestra has been saved and, I hope, has a secure future.
    Mr. Faulds: Not by the Government.
    Mr. Channon: The Arts Council grant this year is £80 million more in real terms than ever before. It is the best grant that any Government have ever given to the Arts Council. Although I should like to do more, it is not fair for the hon. Member to criticise me for what I am doing.

    Arts (Sponsors)
    Mr. Blackburnasked the Secretary of State for Education and Science what steps have been taken to form a central register of possible sponsors of the arts.
    Mr. Channon: I shall do all that I can to bring business sponsors and the arts together, but I do not believe that a register, centrally organised by the Government, would he beneficial. I should be pleased to have my hon. Friends' views on how arts sponsorship may be encouraged.
    Mr. Blackburn: On reflection, does my right hon. Friend agree that sponsorship of the arts is not only vital, but has an important role in the arts? Will he consider issuing a statement when the present proposals for sponsorship have completed their first 12 months?
    Mr. Channon: I should be delighted to answer my hon. Friend if he would care to table a question at the end of the month, which will be a year after the Government's encouragement of business sponsorship. The figures are increasing continually and have probably now reached over £5 million. That is encouraging.
    Mr. Christopher Price: Does the Minister agree that private sponsorship of the arts would go ahead more easily if the chaotic and uncertain tax position under our law were cleared up? When will he respond to the Select Committee's recent report on that issue?
    Mr. Channon: I do not believe that the tax situation or the report of the Select Committee have anything to do with the level of business sponsorship. Most businesses tell me that, under the advertising rules agreed with the Inland Revenue, that is not a problem that concerns them. I am in continual touch with my right hon. Friends about the Select Committee report and I hope to be able to reply before too long.

    Conservation and Restoration (International Centre)
    Mr. Christopher Priceasked the Secretary of State for Education and Science when he intends to reply to the second report of the Select Committee on Education, Science and Arts, HC 274 of Session 1980–81, on the International Centre for the Conservation and Restoration of Cultural Property, Rome.
    Mr. Channon: This is a matter primarily for my right hon. Friend the Minister for Overseas Development. But inter-departmental consultations are taking place and the Government hope to reply by the end of this month.
    Mr. Price: I am grateful for the fact that we are to get a reply to a report for once, but, when the right hon. Gentleman says that it is primarily the responsibility of the Minister for Overseas Development, is he aware that everyone, including the Select Committee, thinks that it ought to be the right hon. Gentleman's responsibility? Will the point of responsibility be included in the reply?
    Mr. Channon: Everything that the Select Committee says will be treated with the utmost care and consideration. I shall bear in mind what the hon. Gentleman has said, and I hope to reply shortly.
    Mr. Faulds: Has the right hon. Gentleman any concept of the damage that is being done to Britain's cultural standing by the withdrawal of this tiny grant and the mean-minded attitude of the Government?
    Mr. Channon: It is a bit early for the hon. Gentleman to say that we are mean-minded. The Government are about to reply to the Select Committee's report. When they have done so, the hon. Gentleman can give us praise or criticism, whichever is due.

Trooping the Colour (Incident)
The Secretary of State for the Home Department (Mr. William Whitelaw): With permission, Mr. Speaker, I will make a statement. As the House is aware, on Saturday 13 June, as Her Majesty was making her way to the ceremony of Trooping the Colour, a man in the crowd of sightseers fired six shots of blank ammunition using an imitation revolver. A man was immediately arrested and has been charged by the police under section 2 of the Treason Act 1842. As the matter is now sub judice, the House will realise that it would be wrong this afternoon to discuss details of the incident itself.
It has not been the practice, nor would it be desirable, to describe the arrangements made for the safety of Her Majesty the Queen and other members of the Royal Family, but I can assure the House that those arrangements are kept under continuing review, and have recently been re-examined. What occurred on Saturday is being carefully studied by the Commissioner of Police of the Metropolis, and full account will be taken of it in future planning arrangements. It is Her Majesty's wish that both on State and less formal occasions she would be able to move freely among her people. Consistent with this, everything will be done to keep the risks to a minimum.
There has been concern in the past about the misuse of replica firearms. Although the law provides severe penalties for their misuse, I have asked my Department, together with chief officers of police, to re-examine, as quickly as possible, what effective controls can be devised.
I am sure that the whole House will wish to put on record its admiration for the calmness and control which Her Majesty displayed throughout.
Mr. Roy Hattersley: I should like to express the relief of the Opposition that neither the Queen nor any of the other participants in, or observers of, the Trooping was injured as a result of the incident on Saturday. I also associate the Opposition Benches with the Home Secretary's expression of admiration for the way in which the Queen reacted to the dangers that she faced.
The Opposition wish to applaud and support the Queen's own view that the day must never come when she is unable to move freely among the people of the United Kingdom. Such a policy may involve personal danger, but we look to the Home Secretary to ensure that the risks involved are kept to an absolute minimum.
The Home Secretary reminded the House that Saturday's incident is sub judice. I hope that commentators who write or broadcast about it will remember that piece of wise advice. However, it is right for me to say that the Opposition will look sympathetically on any proposals that the Home Secretary has to make about tighter controls on firearms—real or replica—within the United Kingdom.
Mr. Whitelaw: I am extremely grateful to the right hon. Gentleman for what he said. I am pleased that he agrees with the view, widely held in the House and throughout the country, that the Queen's duties—and she would expect to carry them out—require her to move freely among her people. Equally, I am grateful to the right hon. Gentleman for expressing the view that it is the task of the Government, and inevitably the Home Secretary and
730
the Commissioner—in the case of the Metropolitan Police—and chief officers outside London, to make sure that the risks are kept to a minimum. That is the correct phrase, and the only phrase that one can use.
The right hon. Gentleman said that the case is sub judice. I am conscious that many people would pick up any failure of mine to observe a rule that is so important and has been so widely referred to on other occasions. I have no intention of giving them the opportunity to express that criticism of me.
As for what the right hon. Gentleman said about firearms in general, and replicas in particular, I am grateful for his support. We will certainly move forward on the basis that we can hope for a wide measure of agreement in the House on anything that we feel able to do on that score.
Mr. David Steel: My colleagues obviously wish to be associated with the remarks of the Home Secretary and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) on the reaction of Her Majesty to the incident on Saturday.
On the question of the use and misuse of replica firearms, will the right hon. Gentleman undertake that, although the review will be carried out urgently, he will also recognise that the matter should be considered with other Governments since, if possible, we should take a collective view to try to restrict the use and manufacture of imitation firearms?
Will the right hon. Gentleman also go a little further and confirm that at the end of the day, despite advice from police and Ministers, properly given, it must be for Her Majesty to decide the scale of protection that she should be afforded?
Mr. Whitelaw: I am grateful to the right hon. Gentleman for his opening remarks. He also said that it would be best to move with other Governments on the control of firearms and replica firearms, but I take refuge in that well-known phrase that, sometimes,
"the best is the enemy of the good."
If we were to wait for the agreement of all the others we might wait for a very long time. I would try to get it and I should like to get it, but if we have to move on our own we ought to do so.
I can say at once that Her Majesty believes that it is her duty to move freely among her people. She would expect to do that and I am sure that it is the wish of the House that she should be strongly supported in that belief and that action.
Mr. Cranley Onslow: If it is not already an offence to carry a replica firearm in a public place, why should it not be made one without delay?
Mr. Whitelaw: The present law is that, while there are no controls on the importation, display and sale of imitation firearms, those that are capable of being readily converted into lethal weapons or part of one require a licence under the Firarms Act 1968. It is an offence under section 18(1) of that Act to possess an imitation firarm with intent to commit an indictable offence or to resist or seek to prevent arrest.
I should say to my hon. Friend and all who are anxious about this subject that the main problem is distinguishing between realistic imitations of lethal weapons and millions of harmless children's toys. That is the problem that we have to solve. I hope that the House noted that I referred

731
in my statement to "effective controls". That means that we are determined to provide them and to do whatever we can to solve the problem.
Mr. Speaker: As the House knows, today is a Supply day. I have a long list of right hon. and hon. Members who hope to speak. I fear, however, that all will not be able to do so. I propose to allow questions on this matter to continue for a further 10 minutes before moving on to the next business.
Mr. Wm. Ross: I should like to associate my right hon. and hon. Friends and myself with the right hon. Gentleman's remarks of admiration for Her Majesty's behaviour on Saturday. The third major assassination attempt in the Western world this year proves that where a gunman is really determined the person concerned can be assassinated. In view of the fact that assassination is contagious and that any serious assassination attempt always comes from organised terrorism, will the Home Secretary give an assurance that the Government will take whatever steps are necessary to stamp out organised terrorism in the United Kingdom?
Mr. Whitelaw: I am grateful to the hon. Gentleman for what he said on behalf of himself and his colleagues. The problems of imitation firearms exist in different parts of the world. All of us face the problems of terrorism. I do not wish to comment further, except to say that we are determined to do everything possible in this country to reduce to a minimum the risks to the Queen, members of the Royal Family and all in public life.
Mr. Edward Gardner: Does my right hon. Friend agree that what Her Majesty and members of the Royal Family have to fear in carrying out their public duties is not replica firearms but the real thing? As a means of reducing this chilling risk, which is met and accepted with great personal courage, as hon. Members know, will my right hon. Friend consider introducing random spot searches on members of the crowd? I am sure that this would be willingly accepted by the British public.
Mr. Whitelaw: I am grateful to my hon. and learned Friend. Chief officers of police bear the operational responsibility. It is important that neither I nor the House should stray into that field of operational responsibility. The chief officers of police must make difficult decisions. There are great problems attached to those decisions. It would be wrong for any hon. Member to try to tell chief officers of police how to do their job, which I believe they perform with the greatest expertise and skill.
Mr. Edward Lyons: My right hon. and hon. Friends would wish to associate themselves with the remarks that have been made about the incident on Saturday. Will the Home Secretary look again at the demand that I made on the Floor of the House at the time of the India House incident in 1973, for import controls on replica guns? Will the right hon. Gentleman also consider adopting a practice upon which the Japanese insist, namely, that such guns have a red band upon them so that they can be distinguished from the real thing?
Mr. Whitelaw: I am grateful to the hon. and learned Gentleman. We shall, of course, look into these matters. They are inseparable from the examination that we must make of the question of effective controls. I hope that the hon. and learned Gentleman and the House will realise that there are great difficulties in distinguishing between
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realistic imitations of lethal weapons and millions of harmless children's toys, despite all the marks that may be made. It is not easy to distinguish them.
Mr. Eldon Griffiths: Will the Home Secretary accept that, while the vast majority of Metropolitan Police officers would willingly risk their own lives in order to protect the life of Her Majesty the Queen, it is the duty of the Government and Parliament to provide the police with the necessary powers and controls to enable them to perform their duty properly?
Is it not a fact that there has already been a detailed review of the matter of replicas leading to the lamentable conclusion by my right hon. Friend's Department that nothing could be done? I welcome very much what my right hon. Friend says about an urgent review. Will he undertake to provide the House with an opportunity to consider shortly a Bill making it an offence to import, possess, manufacture or sell any device that purports to resemble a weapon unless it is seen to be conspicuously dissimilar from that weapon?
Mr. Whitelaw: I endorse 100 per cent. what my hon. Friend says about the attitude of the Metropolitan Police. It might be appropriate at this stage to state that two people took immediate action following the shooting. One was a special constable of the Metropolitan Police, It is important to mention that fact because of the importance, that should be acknowledged, of those people who give voluntary service as special constables. I shall perhaps be forgiven for saying that the other person was a lance corporal in the Scots Guards. Hon. Members will appreciate that I have a particular feeling for members of the Scots Guards. To hear someone from my old regiment complimented for his action naturally pleases me.
My hon. Friend is not a lawyer; neither am I. It is difficult for us to devise, on the spur of the moment, phrases that would be suitable to be incorporated in an Act of Parliament. I am prepared to accept the general principle of what my hon. Friend says. The reviews that have taken place I fully endorse as Home Secretary. I take full responsibility for what the Home Office decided. The decision was mine. I resent very much statements in some sections of the press that I was divorced from the decision. That is not the case.
I realise now that it is important to get the right controls. I am prepared to undertake that task. My hon. Friend and I should submit ourselves to a careful scrutiny of what the lawyers suggest.
Mr. Bruce George: The House will applaud the courage of the Queen and her measured response afterwards. Does the Home Secretary agree that freedom of movement of the Queen and greatly increased security are not automatically incompatible? Will he promise to give urgent consideration to one of the first sentences in the Queen's Speech in November, proposing the introduction of legislation making it very difficult for criminals or prospective assassins to get their hands on firearms and shotguns?
Mr. Whitelaw: I shall certainly do what the hon. Gentleman asks. I know that he appreciates that the need for the Queen to move freely and the need to give her protection mean that the phrase "reducing the risks to a minimum" is correct and a phrase that I believe the whole country will support.
Mr. John Farr: I should also like to express my admiration for Her Majesty and my relief that the incident was not worse. Does my right hon. Friend recall the India House shoot-out a few years ago, when a man using a replica firearm was killed? At that time I, together with hon. Members on both sides of the House, introduced under the Ten Minutes Rule procedure a Bill entitled the Replica Firearms Control Bill under which a vetting procedure or scrutiny procedure committee was to be established. Will my right hon. Friend re-examine the Bill which had been agreed by all those concerned?
Mr. Whitelaw: Yes, I shall certainly do so.
Mr. David Ennals: Bearing in mind the negative attitude that the Home Secretary has hitherto taken towards legislation controlling the importation, manufacture and possession of replica firearms, does he appreciate that I welcome very much the decision that he has now made? I hope that he will proceed to deal with the matter urgently. I recognise the difficulties, but I do not believe that they cannot be overcome. I hope that the Home Secretary will treat this as a matter of urgency. Not only might Her Majesty have been killed; someone seeing the young man with this weapon might have shot him, or aimed at him and shot someone else. This is a dangerous problem.
Mr. Whitelaw: The right hon. Gentleman and also my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) made representations to me. Having considered their proposals, I concluded that it was right that the situation should remain as it was, bearing in mind the great difficulties involved in making changes. I accept that this situation must now change. If it proves that the right hon. Gentleman and my hon. Friend were right and that I was wrong, it will not be the first time in my political life that I have been proved wrong. I do not resent it in any way.
Mr. Mawby: Is my right hon. Friend aware that the House is very happy that he has agreed to re-examine the
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question of replica weapons? At the same time, we appreciate the great problems, particularly those ensuing from the legitimate use of that type of weapon for starting sports events, and so on. I hope that the right hon. Gentleman will make certain that all the people concerned are fully consulted to make sure that we have the right legislation.
Mr. Whitelaw: That is exactly the problem that I face. Once we have consulted all those concerned, the difficulty of introducing any legislation will be great. We must have something that works and is effective.
Mr. Harry Ewing: While the country will clearly place the emphasis on replica firearms, because of the case to which we are referring at the moment, may I encourage the right hon. Gentleman to take the advice of my right hon. Friend the Shadow Home Secretary—the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley)—and concentrate on the whole problem of firearms, both real and replica? Will he examine the question how these firearms are easily available through mail order catalogues, and how they are advertised for sale?
Mr. Whitelaw: Most certainly. I hope that in my answer to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) I made it clear that I shall certainly do that—and I shall.

Statutory Instruments, &c.
Mr. Speaker: In order to save the time of the House, I shall put the two motions together.
Ordered,
That the draft Wool Textile Industry (Export Promotion Levy) (Amendment) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Wool Textile Industry (Scientific Research Levy) (Amendment) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Cope.]

Orders of the Day
  SUPPLY
  [20TH ALLOTTED DAY]—considered

  North-West Region
  Motion made, and Question proposed, That this House do now adjourn—[Mr. Cope.]
  3.51 pm
  Mr. James A. Dunn: It is my great privilege to be chosen by my colleagues in the North-West parliamentary group to open this debate on the problems on the North-West region. I am most grateful to my right hon. and hon. Friends for this opportunity, which I now endeavour to take in the ways that they expect of me. On a personal note, it is also a pleasure to return to the Dispatch Box after such a long time away from it.
  My contribution to the debate is made in the aftermath of the people's march for jobs, a unique event in modern times, having its origin and birth in my home town of Liverpool. It was adopted by the whole Labour movement and nurtured by the wholehearted support of Merseyside, the North-West and the nation.
  Every step of the march was a fervent protest on behalf of the beleaguered cities of the North, a condemnation of the bankrupt economic policies of monetarism, now often described as Thatcherism, in my part of the country. Every step of the march and every stop clearly demonstrated the grave concern and frustration of the people at the Conservative Government's failure to meet the real needs of the nation. They sought to demonstrate clearly that Mammon and the market place are not the absolutes that the Government believe them to be.
  Resentment is building up and anger is growing over the ever-increasing upward spiral of unemployment, which continually overwhelms the Government's belated and inadequate measures, with catastrophic results for our people, particularly the young. Youth unemployment continues to increase on Merseyside and in the rest of the North-West. The Manpower Services Commission schemes, the youth opportunities programme, the special temporary employment programme and a number of other schemes that have been introduced are not equal to providing urgently needed career prospects.
  An immediate revision of the Government's manpower policies and programmes is needed to make them much longer lasting. Building on the experience of the youth opportunities programme and of the special temporary employment schemes, it could be developed to integrate job creation with rehabilitation and training on a sufficient scale to meet the size of the problem. It could lead to permanent jobs being created.
  Talking with many who are involved and who have had experience of the MSC programmes, I have been reliably informed that the strict rules of STEP, for instance, have serious limiting features that affect the relevance and the take-up and effectiveness of the scheme. It is said that 12 months is too short a duration to be of great value, and the financial restrictions pose difficulties, because the maximum wage rates reimbursed by the commission are often below the local rate for the job. This often imposes upon the sponsor an additional cost of the part-payment of
  736
  the wages, which more often than not he is not persuaded to accept. That disincentive to the prospective sponsor should be dealt with quickly before it is too late for the scheme to be effective.
  Only a major reorganisation of the youth opportunities programme and the special temporary employment programme and adjusting the time scale from 12 months to three years will provide the facilities for the longer-term job creation that we seek as the basis for good career prospects. Without reorganisation, review and rearrangement of the programmes, our teenagers will be denied an opportunity to create and achieve an independent, rewarding life for themselves and their future families.
  Our youngsters must not be sacrificed upon the altar of monetary strangulation. Further wanton unacceptable cuts of financial resources cannot and will not be tolerated. Our young inheritors must have a better birth right than this. Britain's life blood depends upon it.
  I warn the Government that there is ever-growing bitterness and resentment over the scourge of unemployment. Our young people are now raising their voices loud and clear. More and more families are being affected by this scourge almost daily. Tolerance is stretched to the limit, and patience is coming to an end.
  Unless there is a change in their bankrupt economic policies before it is too late, retribution will come to the Government as surely as night follows day. Reports abound that a special meeting of the Cabinet is to take place this Wednesday to discuss the economic crisis. The Prime Minister said last week that the meeting was to be a normal Cabinet meeting, for normal Cabinet consideration of future public expenditure. To me, that is a more frightening prospect than an emergency Cabinet meeting. It will certainly result in more and even harsher cuts of desperately needed services on which we depend.
  That will be done with considerable disadvantage to all the regions north of Watford. The North-West, the North-East, Yorkshire, Lancashire, Cheshire, Manchester, Merseyside and Liverpool and all the surrounding areas will feel the first impact of the decisions taken by the special meeting. One has only to look at the litany of closures and redundancies which extend unabated in the North-West and, in particular, on Merseyside.
  International Computers Ltd. at Winsford is reported to be closing soon, with more than 1,500 jobs, and further reductions of 4,000 jobs are planned in the associated services and work force. I declare an interest here, because my brother works in the Liverpool region for ICL. Whatever my personal interest, the total job loss for ICL is between 5,200 and 5,500 people. The Burmah Oil Company proposes to close the Ellesmere Port refinery. No doubt many hon. Members have already commented on that closure, and I have no doubt that if freedom were exercised in this House we should hear caustic comments from Conservative Members.
  Mr. Barry Porter: I hope that the hon. Gentleman has examined the reasons for the proposed closure of that refinery, which is in my constituency. I hope that he realises that the company has said that it produces a specialised oil which is not in great demand at present. The company has made projections for five years. The closure has nothing to do with the Government's economic policies, and the company does not blame Government policies.
  Mr. Dunn: The hon. Member for Bebington and Ellesmere Port (Mr. Porter) and I have a friendly relationship, but it would be stretching it too far if I were to accept what he says as the reason for the redundancies. In the end, 1,500 jobs will disappear. For whatever reason, that is unjustified and unacceptable, particularly bearing in mind the large investment that was made in the region at the time—including, I suspect, a considerable amount of Government money.
  Mr. Robert C. Brown: I am grateful to my hon. Friend for giving way, as I do not come from the North-West region, but is he aware that the same company which is closing the refinery in the North-West has only recently gained planning permission for a new refinery in the Thames estuary?
  Mr. Dunn: My hon. Friend makes a telling point. I thank him for informing us of what is happening. It is only one instance of the transfer of activity from one region to another. It clearly shows the absence of a Government regional policy. There should be overall control and supervision of these matters. Notice should be taken when investment is made in one region, then dismantled and transferred later to another region, with considerable profits and with the advantage of derelict land and equipment grants being made available to industries in special development areas such as Merseyside and Ellesmere Port.
  I hope that the hon. Member for Bebington and Ellesmere Port will point that out to those who gave him those admirable reasons and ram that down the locker about the planning consent that the company is seeking elsewhere. Forgive me—you asked for the bullet and you got the 16 in. gun.
  Mr. Robert C. Brown: I am much obliged to my hon. Friend.
  Mr. Speaker: Order. I think that the hon. Gentleman was just looking at me. I have not asked for anything.
  Mr. Dunn: I hope that you will forgive me, Mr. Speaker. In my part of the world we use "you" in an affectionate way, meaning almost everyone. It was not particularly directed at you. I would certainly never fire at you, Mr. Speaker.
  Mr. Speaker: The hon. Gentleman is in the House, not up there.
  Mr. Dunn: There is no answer to that.
  I come back to the litany of closures and redundancies that I mentioned. The Burmah Oil Company is not the only company involved. On my side of the river, there is much doubt, anxiety and concern about BICC at St. Helens. Even more redundancies are forecast, unless the Government carry out further electrification of British Rail main lines. That would make good sense, and provide a better and more viable transport system for inter-city, local, regional and national services. If the order is not forthcoming, all the expertise that has been gathered by BICC may be dissipated, and the consequential redundancies will have a grave effect on each individual concerned, and will disadvantage the community as a whole.
  The contraction of the Liverpool, Birkenhead, Stanlow and Manchester docks involves massive reorganisation, with consequential high job losses. That will affect not
  738
  only the people employed in the port industry, but the transport and service industries which are associated with the ports.
  This high job loss means that employment opportunities will disappear for ever-just as happened in the shipbuilding and ship repair industries on Merseyside. Ship repairing once employed more than 25,000 people. Now it is lucky if it employs 200 people. At one time, shipbuilding employed over 11,000. Now it employs under 4,000.
  Mr. Robert Parry: Will my hon. Friend point out that the printing industry on Merseyside is affected, too? At Bemrose in Liverpool 700 jobs are in jeopardy.
  Mr. Dunn: I confirm what my hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry) says. The printing industry is being affected, as is the paper industry. I shall mention a number of associated industries, too.
  I come back to what I was saying about the docks. The employment opportunities that will disappear for ever are a consequence of the closure of large areas of Liverpool and Bootle dockland. That leads me to the inescapable conclusion that the Government are prepared to accept a total closure of the port, if they cannot impose a reconstruction based on pure monetarism and large-scale transfers of trade, either of European cargoes or of some of the Atlantic traffic, too.
  At present, the Mersey Docks and Harbour Company is under intensive examination by the Government, as is the future potential for the port. I have no doubt that the limitations being placed on the company are financial more than anything else. Without going into chapter and verse, it is my view that these capital expenditure constraints are strangling the docks. The future is not encouraging.
  The building and construction industry is so depressed that it is difficult to foresee how it will be revitalised and regenerated. In parts of Liverpool and Merseyside—also, sadly, in my constituency, and doubtless in Scotland Exchange and Walton—unemployment in that industry is about 34 per cent.
  Mr. Robert Kilroy-Silk: I am sure that my hon. Friend is aware that in parts of my constituency unemployment has reached 40 per cent. Perhaps I should point out also that in Kirkby there are 1,000 unemployed building workers chasing three vacancies, 17,000 unemployed construction workers chasing 86 jobs. Does that not give the lie to the Prime Minister's suggestion that people should move to find employment? If not, where should they go to find employment? Does not that also make nonsense of the position in the North-West as a whole, especially Merseyside, where there is such a great need for construction workers to be employed on building the infrastructure of the region?
  Mr. Dunn: My hon. Friend is right. Regrettably, I can confirm that 1,000 are unemployed in the building and construction industry in Kirkby. The Manpower Services Commission made a recent announcement that it was trying to examine the unemployment statistics, and said that that exercise would provided some employment. However, no employment took place. Instead, it transferred people sideways so that they were employed on a different activity in a different Department. The benefit

  739
  that accrued from that exercise was infinitesmal. I am concerned about the matters raised by my hon. Friend. If he catches your eye, Mr. Speaker, he will show more clearly the specific problems that affect his constituency and area. I am sure that he will forgive me if I do not follow in his footsteps now.
  One of the grave concerns about unemployment in the North-West, and the disaster that that causes, is the lack of craft apprenticeships. It appears that they no longer exist. There are grave doubts about the potential for industry if there is an upturn in that sector. Any economic upturn would bring with it the need for skilled craftsmen. The various training schemes make no provision to maintain skills. A recent Act that the Government callously inflicted on the country means that some of the existing training schemes will be dissipated—yet they serve a useful purpose for industry.
  If we examined the position industry by industry we could prove that the North-West suffers disproportionately both in unemployment and in social deprivation. The recent history of textile manufacturers amply shows the Government's complete disregard for that industry's contraction. The past decade has seen a reduction from about 300,000 jobs to the present figure of 48,000. I regret to say that uncertainty still prevails. Unless the Government act against unfair import penetration more closures are almost certain. I am sure that my right and hon. Friends will make those points in more detail during the debate next Thursday.
  Steel, motor manufacturing—especially on Merseyside—engineering, carpet weaving, furniture manufacture, food processing, clothing, fishing, fish processing, shipbuilding and footwear are at great risk. Closures and redundancies are reaching alarming proportions. Without respite from the Government, I do not know what will be the answer to the problems.
  I wish to quote statistics which I extracted from the "Norwida Newsletter" of May 1981. I confess that I am not usually impressed by statistics. I have selected the statistics that I wish to put before the House, and I make no apologies for that. Unemployment in Blackpool stands at 11·8 per cent., with 12,959 out of work. In Lancaster it is 11·5 per cent. and 5,426; in Blackburn 11·7 per cent. and 8,082; in Nelson 11·6 per cent. and 3,063; in Rawtenstall 13·5 per cent. and 2,775; in Liverpool 16·1 per cent. and 76,907—the highest unemployment figure in the region.
  Mr. Kilroy-Silk: It is higher in Ormskirk.
  Mr. Dunn: My hon. Friend is correct. Unemployment in, Ormskirk stands at 17·8 per cent., with 5,488 unemployed. I regret that my hon. Friend has a higher league standing than Liverpool. If it is regrettable for Liverpool; it must be even more so for Ormskirk.
  I could continue with my list and mention Birkenhead, Widnes and Warrington—which is attracting attention at present. Even there unemployment stands at 11·5 per cent. with 9,276 out of work. If there is a by-election in Warrington shortly it will be cold comfort to the Government. Whatever the problems, the Government will emerge at the bottom of the poll with less support than in any by-election in recent years.
  Other areas of high unemployment include St. Helens, Southport, Manchester, Ashton-under-Lyne, Bolton,
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  Bury, Leigh, Wigan and even Oldham, where unemployment stands at 11·3 per cent. with 11,051 out of work. Rochdale's figure is 14·6 per cent.—
  Mr. Joel Barnett: My hon. Friend must be aware that the Oldham and Rochdale figures, appalling as they are, are really much worse because of the rapid closure of mills, which means that far more women become unemployed but do not register because they have no chance of finding another job. Unemployment in those areas is catastrophic.
  Mr. Dunn: My right hon. Friend has rightly drawn my attention to that point. I had intended to bring it to the attention of the House later in my speech. Many female part-time workers do not register as unemployed when they lose their jobs through redundancy or closure. They often lose their jobs through no fault of their own. They are not included in the statistics, although their unemployment has devastating effects on family income. I can even draw the attention of the House to Macclesfield, which has 2,275 unemployed, or 8·1 per cent.
  In case anyone claims that I am quoting selective statistics, I shall round up the figures. In the region as a whole 12·4 per cent. are unemployed, giving a total of 352,618. That is a condemnation of the Government. Only they can resolve the problem, yet they make no attempt to do so.
  Other statistics show the other side of the coin. I often hear it said across the Floor of the House that people should be prepared to take jobs in other areas. The Prime Minister said, "Move, boys, and you will find work." I shall explain the position in the North-West. In Accrington, the unemployment-vacancy ratio is 54·8 per cent., in Birkenhead it is 68·9 per cent., in Widnes 70·8 per cent., in Ormskirk 75·2 per cent., in Crewe 88·2 per cent., in St. Helens 79·4 per cent., in Wigan 89·7 per cent., and in Rochdale 130·8 per cent.
  The statistics go on and on. I am sure that hon. Members have read the document but if not I shall be pleased to lend it to them so that they can examine it in their own time.
  Mr. Mark Lennox-Boyd: As the hon. Gentleman has all the figures in front of him, will he confirm that during the first four months of this year, from January to May, unemployment fell by twice the rate that it fell during the same period last year? Unemployment traditionally falls in the, Lancaster area at the onset of the tourist season. It is falling faster this year than last year.
  Mr. Dunn: The hon. Gentleman is as selective as I am. It all depends on the base from which one starts. I said that I usually discounted the impact and influence of statistics. Evidently the hon. Gentleman relies upon them. I was making a general observation. I hope that he will take my comments in that spirit. I was not dealing in chapter and verse. If I were, it would be even worse, because last year was a disaster, and this year is even worse. The figures may have moved slightly, selectively, in certain areas, but they have not moved in mine; in mine, they have got worse. They have not moved in my hon. Friends' areas; there, too, they have worsened.
  Probably the answer was given by the Chancellor of the Exchequer in his recent Budget speech, when he declared

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  enterprise zones. That is cold comfort to us in the North-West, because many in the population of 6½ million believe that the North-West was one of the first enterprise zones—if not the first.
  All that we have inherited from that venture is an over-abundance of industrial dereliction, with all the attendant deprivation of the environment and appallingly inadequate social structures. That is the result of the denial of the reinvestment required. The replacement of equipment and the renewal of manufacturing technology have been sadly lacking. The regeneration of basic industries and skills has not been attempted by the present Government. Yet we urgently need all of this.
  We also need some occupational education and training for men and women and for youngsters to prepare them for any new opportunities. A regional policy must provide sustained financial assistance. We must return to the intermediate, selective and special area statuses. We must restore the assisted area grants to the travel-to-work areas that were deprived of them by the Secretary of State for Industry in 1979–80.
  Selective industrial aids could create worthwhile job opportunities with reasonable career prospects. More attention must be given to the service industries and to social welfare facilities. Adequate resources must be provided to meet the needs of the people in these sectors.
  Housing must be a high priority. We must ensure this in new build, in improvement grants and in the various programmes that replenish the environment. We must have more resources and we must plan more carefully. We must ask the local authorities to involve the voluntary housing associations in a multiplicity of schemes beneficial to the whole community. They have proved that they can rescue and improve old houses and meet the needs of prospective householders. Let us find out what the people want and try to provide it.
  The Department of the Environment ought to use this opportunity to introduce more public works programmes, not fewer. If that were done, housing and the environment would benefit. The Department must also consider the domino effect upon the employment prospects in the building and construction industry.
  In any restructuring of the region, attention must be paid to the inadequacy of the social and welfare provisions. We require a fairer share of the resources for health, hospitals and patient care. Health Service expenditure in the North-West falls far short of that for other regions. Recent cuts have already had disastrous effects on patient care, with demonstrable effects upon local services, such as those in Liverpool. [Interruption.] The hon. Member for Bebington and Ellesmere Port keeps muttering from a sedentary position. I have given way to him once. I find his voice rather strident at present. I ask him to look at what has happened recently and the statement made by the Secretary of State for Social Services about the reorganisation of hospital services on Merseyside.
  Let us look at what the Liverpool regional hospital board has done and how it has been involved in a bitter controversy in recent months over resource allocation and patient services, of which the hon. Member will have been duly notified. The hon. Member will recall the resignation of a medical officer of health, Dr. Doulton, which clearly showed the dissatisfaction and the intensity of the dispute,
  742
  which has never been made fully public, but as time goes on we shall probably learn more. However, there were grave allegations about withholding financial facts from one area hospital board, leading to more conflict, which eventually involved the Minister for Health—the hon. Member for Reading, South (Dr. Vaughan)—who, after long-drawn-out conversations upon these serious matters, managed to introduce some understanding which temporarily relieved, the conflict, and momentarily ended the public debate. Although not achieving complete accord, this respite was welcome as an opportunity for resolving the problem and for dealing with the real issue of reorganisation.
  A consultative document published by the regional officers of the Liverpool hospital board outlined several potential alternatives but expressed preference for dividing Liverpool into two health districts. The document was widely distributed and discussed. Virtually every response opted for a single district, as at present. That view was conveyed to the regional hospital board by the Liverpool city council, Liverpool AHA, the family practioner committee, several local medical committees, the Liverpool community health councils, all the Liverpool area committees of the trade unions involved, some Members of Parliament, and academic and other professional people.
  The regional hospital authority—mostly nonLiverpudlians—met on 27 January this year. It considered the unanimous Liverpool response. Yet by a casting vote of the chairman, Sir Eric Driver—the vote was 9:9; his casting vote made it 10:9—the decision was for the preferred option of his regional officers. That is unusual, if not unique. The consequent recommendation to the Minister was in that vein and was completely at variance with the results of the long-standing, intensive and well-publicised consultations.
  Unfortunately, the Minister has now announced his support for the regional officers' preference, and, although it went through only on a casting vote, he has decided against the unanimous local expression of opinion, and there are to be two district hospital boards for Liverpool. All hell has now broken loose, and consultation has been brought into grave disrepute.
  I could refer to a number of other issues, but my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris), in a similar debate early last year, made many proposals, one of which was for a regional development agency. I support that proposal. I wholeheartedly agree that the only effective method of achieving capital-intensive industries is through the agency of a development corporation. This must be a co-ordinating factor in industrial regeneration and expansion with all the other organisations in the region. The point made in the "Strategic Plan for the North-West", published in 1975, can be seen in the third paragraph of c.95 of Hansard for 21 April 1980.
  In the autumn of last year, the party conferences drew all our attention. All the political parties apparently debated their policy programmes for this year and beyond. In a widely-screened and well-publicised speech, the Prime Minister said that she was not for turning. In my part of the world, that is not exactly what the people have in mind. I warn her that the people's patience is exhausted. I hope that she will heed that message. On behalf of my right hon. and hon. Friends, I say that if she does not, retribution will soon come to her and to all her colleagues.
  4.30 pm
  The Under-Secretary of State for Industry (Mr. John MacGregor): Let me say at the outset that the Government are very much aware of the situation in the North-West and share the concern that, I am sure, will be expressed throughout today's debate. None of us at the Department of Industry have constituencies in the North-West, but we are much guided by colleagues in other Departments. We have shown that concern. We have frequently been to the North-West to look at the problems on the ground. Since May 1979 we have been there on 13 occasions to meet industry and local authorities. In the same period we have received a large number of delegations in London on regional matters.
  Last month I visited the Wirral. I freely admit that that was the first opportunity that I was able to take to go to the Wirral as a Minister. However, that was fairly soon after my appointment. I discussed the current situation with industrialists, met top executives of the Lithium Corporation at the opening of their new £2 million plant, and talked to them about the attractions to inward investors of that region. I opened a small workshop unit estate developed by the English Industrial Estates Corporation.
  I visited successful companies in the region. I sometimes wish that more emphasis were put on some of the successful companies, as, undoubtedly, that helps enormously to increase the attractiveness of coming to the region for others. I talked with Mr. Leslie Young about the plans of the Merseyside Development Corporation.
  I appreciate that that was only a start, but in a two-day visit it was a considerable coverage of the situation. I hope to do more. I was able to see that while there are serious problems there are also signs of success and of hope. Later this week my hon. Friend the Minister of State will be in Greater Manchester for meetings with representatives of the textile industry and the paper and board industry.
  Mr. John Evans: Surely the Minister will concede that, if to visit all the successful firms in the North-West would take two days, if he were to visit all the firms with problems it would take over two months.
  Mr. MacGregor: I am well aware of the problem industries. I shall return to those later. I entirely refute the point made by the hon. Gentleman about visiting successful firms.
  Next month my right hon. Friend the Secretary of State plans to visit the region again. I hope to be back in the North-West in early September—in Lancaster and North-East Lancashire. I hope that that shows the real concern of Ministers in the Department of Industry about the problems.
  It is, of course, easy for politicians simply to list the industries that have been under particular pressure in recent years, the closures and the redundancies, and to bellow from the rooftops that it must be someone else's fault—usually, for the Opposition, it is the Government's fault, except when they are in Government.
  It is easy to insist that everything can be put right by the injection of much more public money. We heard that a great deal from the hon. Member for Liverpool, Kirkdale (Mr. Dunn). It is easy to do so without pausing to think where that money might come from or, if it were a great deal extra, what damage to other industries much higher public expenditure financed by the taxpayer would cause. It is easy to insist, by implication if not overtly, that
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  problems can also be put right by resisting the processes of change and, above all, by ignoring what is happening in the rest of the world. We heard much of that from the hon. Member for Kirkdale. I understand his genuine concern, however.
  It was striking that the hon. Gentleman put forward no remedies except the injection of much more public money simply to prop up industries in difficulties. When listening to the hon. Gentleman, I wondered where his Government stood in relation to the catalogue of, to him, long-standing woes during their periods in office. I have no doubt that we shall hear cries along those lines from many others today. I hope that we shall hear more than a simple recital of difficulties. It does no one a service, least of all those in the North-West, to respond to the situation by a simple gut reaction.
  Therefore, it is essential to analyse the nature of the problem before turning to the specific policy remedies that the Government are pursuing. In the North-West we are seeing a combination of all the factors that have combined to make Britain's industrial performance over recent years so disappointing, compounded by the particular problems—which the North-West shares and has shared for a number of years with other assisted areas—of a concentration of industries in difficulties for one reason or another.
  I share the concern of the hon. Member for Kirkdale that frequently we have not been able to do as much as we would have liked in the North-West, as elsewhere, to deal with Britain's social problems, some of the requirements in the National Health Service, and so on. Britain's poor economic performance over a long time caused the hon. Gentleman's Government—as well as causing difficulties for our Government—not to have the resources to deal with those problems on the scale that he now requires from us.
  The overmanning, the restrictive practices, the poor industrial relations record in many industries, the failure of much of industry to introduce modern techniques and to adapt to change, the poor productivity, the low profitability, the relatively poor record of innovation and the high wage demands in relation to competitors overseas and to our own increased output—all those are factors common to all parts of the country, which we have discussed much in the House. Therefore, I do not intend to elaborate those problems today but simply to remind the House of them.
  In the context of the North-West, however, it is necessary to underline again today that at a time of low world trade and hence even tougher competition, and when we have the advantage in other respects of an oil-boosted pound, we are paying the price for our failure sufficiently to tackle those problems earlier.
  The hon. Member for Kirkdale referred to ICL. The decision that ICL recently had to take relates very much to one of the problems to which I have referred, namely, overmanning. That reflects the new management's determination to restore ICL to financial health, which must be its primary task if the jobs of the great majority of ICL employees are to be safeguarded. It must be recognised that to restore ICL to profitability hard decisions are required. Of course, job losses are always regrettable, but as the company said in its announcement, ICL is overmanned and needs to reduce its overheads severely if it is to recover its former competitive position.
  Mr. Alfred Morris: The Minister said that my hon. Friend the Member for Liverpool, Kirkdale (Mr. Dunn) was advocating simply higher public expenditure. Is the Minister aware that the Government are now spending over £10,000 million on the unemployed? Is he aware that it now costs £4,000 a year and more to keep a single person unemployed and over £6,000 a year to keep unemployed a married man with two children? What possible sense is there in a policy that spends over £10,000 million on unemployment pay when there are so many people who are desperately anxious to work?
  Mr. MacGregor: The right hon. Gentleman must be aware that most calculations also show that to prop up industries and to continue with overmanning in an industry that desperately needs to cut its overheads to compete is more expensive than having to give unemployment benefit to those without work. That is more expensive in the short to medium term and much more expensive in the long term, because it preserves jobs for which there is no justification and slows up the process of restructuring the new industries from which the new prosperity will come.
  Mr. Gerald Kaufman: With regard to ICL, is not the Minister aware that in the North-West we are facing 30 per cent. redundancies compared with 17 per cent. redundancies nationally, and that that situation could be remedied if the Government would take some action and bring forward orders to provide the work? The Government have part of the remedy in their own hands, but they are just not interested.
  Mr. MacGregor: I appreciate the difficulties for the North-West, but commercial decisions about a concentration of 30 per cent., or whatever—I do not have the figures with me—must be for the company.
  Mr. James A. Dunn: Will the hon. Gentleman give way?
  Mr. MacGregor: I must get on, as I have hardly started. I shall give way a little later.
  It will not help the future economic progress of the North-West to postpone tackling the problems and facing decisions on overmanning at a time of world recession merely temporarily to save jobs. We are paying the price for making that mistake too often in the past. Many regions are experiencing difficulties, but I have been struck by what companies—including companies in the North-West—have told me since I have been in the Department. They are now taking decisions that they should have taken before to deal with long-standing matters that make them less efficient than their competitors.
  Mr. Charles R. Morris: The Minister argues that overmanning, restrictive practices and inordinate wage demands have contributed to the problems of the North-West, but not one of those factors applies to the textile industry. The workers have not demanded inordinate wage increases, they co-operated in double-shift working, and they have also co-operated in closing down 400 mills. His arguments have no substance in fact.
  Mr. MacGregor: I must make progress with my speech, but I shall come to that point. In general, my arguments about overmanning, restrictive practices and so on have been well rehearsed in the House and are recognised by many in industry.
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  The North-West, like the North-East, has more than its fair share of industries facing problems, not necessarily of their own making. The world over-capacity in shipbuilding is creating problems for industries in many countries. Problems in the steel industry can, in the long run, be solved only by dealing with European over-capacity. The North-West is also affected by the United Kingdom over-capacity in sugar refining. Canada and Scandinavia have competitive advantages in the paper and board industry because they are close to the source of raw materials and have cheap energy. Then there is our textile industry, which, like other European textile industries, has long had to adjust to the problems of supply from developing countries at the cheaper end of the market and to the introduction of new materials and technologies.
  It is important to understand that the Government are adopting measures appropriate to the circumstances. Some are to give industries time and others to deal with long-standing problems, which require urgent attention.
  I shall not deal at length with the textile industry, because many hon. Members with textile interests in their constituencies dealt with the matter on the Adjournment on 9 June and there will be a full day's debate on Thursday.
  Last week in the House the Minister for Trade acknowledged the importance of the textile industry and our commitment to it. The hon. Member for Kirkdale mentioned the difficulties with which the industry in the North-West has to deal, and his right hon. and hon. Friends reinforced what he said. However, the impression is sometimes given that our entire textile industry is disappearing, so it is worth stating that it still supplies about 70 per cent. by value of all the textiles and clothing purchased in Britain, and is still a substantial and major exporter. Last year the figure was nearly £2,200 million.
  I entirely reject the allegation that the Government are disregarding the industry's problems. Although we reject general import controls as a solution to the problems of any industry, our commitment to the industry is demonstrated by the fact that for no other industry has so much been done to ensure that imports from so-called cheap producers do not do unreasonable harm.
  The Minister for Trade pointed out last week that he now administers 570 quotas from 42 low-cost suppliers from all over the world, and that he has added to the number of quotas at the rate of one every two weeks since the Government came to power. No other industry has received that range of help and support, and it demonstrates our commitment. We recognise that the textile industry has peculiar problems. Although my general criticisms may apply to some textile firms, others are in difficulties through no fault of their own.
  In addition, the European Community, supported by the United Kingdom, has imposed quotas for the first time on imports of American synthetic yarn. The textile, clothing and footwear industry has also received substantial support through regional aid and the temporary short-time working compensation scheme. Since 1 April 1980, £43·4 million has been paid to firms in those sectors under the scheme.
  It is important for the future of the industry that the Government are committed to renegotiating a tough successor to the present multi-fibre arrangement. My hon. Friend has made it clear that the arguments for a recession

  747
  clause, about which the industry is so concerned, are strong. There will be ample opportunity to go over the ground in the debate later this week.
  State aid by itself cannot solve the problems of any sector. I have no doubt that Opposition Members today or on Thursday will mention the schemes for assistance to the textile industry proposed by the Belgian, French and Dutch Governments, but those have not yet been approved by the European Commission and we have no intention of proposing similar schemes. In the long run, industry, including the textile industry—and I am thinking, too, of the necessary adjustment and restructuring from old to new industries, which we must all face—must look to increased productivity and quality, improved marketing and the appropriateness of the product range for the home and export markets that the industry is selling in. We cannot escape from the fact that, especially in a recession, with tough competition, firms must get down to the job of beating the competition. They cannot continue to produce and hope to sell products for which there is no demand.
  Mr. Nicholas Winterton: My hon. Friend has been somewhat scathing, indirectly, about the textile and clothing industry and has mentioned its need to be more efficient. How can a firm be more efficient than Carrington Viyella, at unit 1, which the Prime Minister visited before the last election? It is an investment of £6½ million, which employs merely 81 people. Until recently, it had to operate only one week in two, although, fortunately, it is now working full-time again. Surely my hon. Friend will admit that, with the co-operation of employers and work force, the industry has done all that it can to meet foreign competition, not only from developing but from developed countries. Will he pay tribute to the industry for the tremendous job that it has done in recent times?
  Mr. MacGregor: A problem with having to speak quickly and briefly about long and complex problems is that generalisations do not cover individual circumstances. Although I have not visited the plant, I have no doubt that many textile and other firms have excellent efficiency and productivity. However, because of the changing pattern of world trade, industries that have previously been highly successful may have problems. That is why measures have to be taken to enable industry to adjust. It worries me that through no fault of their own—perhaps because firms to which they supply components are in difficulties because of the recession and may not have been as efficient as they should be—many firms get into considerable difficulties. That is one of the most disturbing aspects of a recession, but, alas, it is sometimes a fact of economic life.
  In the textile industry that inevitably means difficult decisions, but, at the end of the day, the Government's role cannot be that of a crutch to non-competitive industry or to industry with particular problems such as those faced by some firms in the textile industry. It is for management and workers alike to take the oportunities that our policies will offer once the world economic position improves. I known because I have visited them, that many of our textile firms are already succeeding in doing that.
  I come now to the wider areas of Government action. The House is by now well aware that our policy is to concentrate the resources available on those areas with the severest structural problems, so I need not explore at great length the general philosophy behind our approach to
  748
  regional policy. We believe that our approach will make regional industrial policy stronger and more effective than hitherto, by increasing the incentive available to industry to locate or expand in the areas with the severest problems. In the North-West this has meant a recognition that Merseyside faces problems unmatched anywhere within the region. That must be right. But the North-West as a whole benefits from a whole battery of weapons, and a concentration of Government expenditure and efforts, much greater than that applied to most other parts of the country.
  First, in terms of regional policy, the reduction in the areas covered by assisted area status from 44 to 26 per cent, will in itself help those areas still retaining the status by the very fact that the incentives are now available to fewer other parts of the country. I am aware that there is concern among some of my hon. Friends and among Opposition Members about certain areas in the North-West. We have made it clear that we are committed to keeping a close watch for signs of any long-term structural decline relative to other areas that would call for adjustments to present assisted area designations. That still stands.
  I deal next with the Industry Act measures, which my Department administers. Regional development grants amounting to more than £105 million were made to the North-West in the last financial year. That was 21 per cent. of the British total, which shows the extent of concentration. Certainly, the figure for regional development grants was much higher than in earlier recent years. That in itself gives the lie to the hon. Gentleman's proposition. It is so easy to ignore what is being done and simply to go on demanding more and more. Offers of selective assistance under section 7 of the Act over the same financial year amounted to £32 million, or one-fifth of the national figure.
  Over the two financial years since the Government came to power the figure is about £60 million in support of projects estimated to cost £600 million and providing about 20,000 new jobs. A similar number of jobs will have been safeguarded by projects financed by this support. That is worth putting on record, as the cries for more occasionally give the impression that nothing is happening. [HON. MEMBERS: "How many jobs have been lost?"] We have already been through the problems of declining industries. I am well aware of the figures. Nevertheless, hon. Members must recognise that a great deal is being done and that in a difficult world situation, in which so many of our industries are declining or have become uncompetitive, it takes time to carry out the industrial restructuring that we all seek.
  The emphasis on regional development grants and selective financial assistance is particularly important in achieving structural change from the old to the new industries that the region needs, as well as in the context of inward investment and demonstrating the attractiveness of the region to those who might wish to come to this country. I shall return to that later, as one of the difficulties is that, internationally, industry is hardly mobile at present. Nevertheless, the range of incentives exists for the North-West.
  Mr. Anthony Steen: I should be glad of my hon. Friend's comments on two points. Is he aware that one of the problems facing small firms and industry in the large metropolitan areas is the level of

  749
  commercial rates where local authorities continue to run services even though the populations have declined? Does he agree that it would be of great assistance if they would contract out some of their services to private enterprise? Secondly, will he comment on the fact that, so long as small firms cannot expand or develop in the inner areas because the infrastructure grants are not adequate, they tend to go out to the green field sites, thus losing even more rate income for the inner areas?
  Mr. MacGregor: I agree with my hon. Friend's first comments. I shall deal with commercial rates in a moment. On his final point, a great deal is now being done to try to improve derelict sites in inner urban areas. Indeed, the small workshop unit estate that I opened was of precisely that kind. A great deal can be done and is now being done to achieve this. I agree with my hon. Friend that this is particularly relevant to small firms and to businesses starting up.
  In the North-West—including Cumbria, which is now included in the North-West—the English Industrial Estates Corporation has spent more than £9 million on factory construction in the last year—about 28 per cent. of its total expenditure. That is an indication of the degree of concentration. Moreover, it plans to spend more than £14 million in 1981–82, which will help the construction industry, on nearly 62,000 square metres of factory space. A total of 122 factory units is under construction, in addition to 145 units, mainly small, funded by the private sector.
  Another of the good things that have happened over the past year—partly, I believe, in response to the changes in last year's Finance Act with regard to industrial buildings allowance, especially for small units—has been the increasing interest shown by the private sector for the first time in years in building these small workshop units. In the rural parts of the region the Development Commission's COSIRA has nearly 500 square metres under construction and has completed the design of a further 10,000 square metres.
  I wish to deal briefly with a subject that was debated on the Adjournment on 12 March. That debate raised the problem, particularly in the North-West, of older industrial buildings which might, if refurbished, provide premises for new companies, especialy small firms. Some vacant premises, including textile mills, are readily reusable. I know that some of my hon. Friend's, particularly my hon. Friend the Member for Nelson and Colne (Mr. Lee), who has often discussed the matter with me, have a great interest in this matter. Some premises are readily re-usable, and some can be adapted for re-use, while others cannot be viably adapted. It is unreasonable, however, to urge that all these premises should be re-used or adapted.
  The English Industrial Estates Corporation will consider the adaptation of buildings where this can be shown to provide viable new premises. I am pleased to note that several local authorities have already successfully adapted old buildings, sometimes including multi-storey mills, and several property companies have successfully adapted old buildings. As I tried to make clear in the Adjournment debate, however, I cannot emphasise
  750
  too much that all this has been done on a selective basis and by no means all older premises are suitable, physically or financially, for such treatment.
  On the point raised by my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen), I readily understand the psychological as well as the practical barriers to attracting new industry caused by the despoliation of the landscape by previous industrial enterprise. Indeed, the Opposition also referred to this problem. That is why the North-West is receiving as much as one-quarter of all derelict land clearance grants, amounting to about £7·4 million last year.
  It is also worth emphasising the sums received from the European regional development fund, amounting to about £63 million in the last two years, of which two-thirds was for industry projects and the rest for infrastructure projects. The industry project orientation is right, because that is where the crying need now lies. It was pointed out to me in the North-West that the area's transport and communications infrastructure is now very good. That is of fundamental importance in trying to attract such mobile industry as exists at present. [Interruption.] It was achieved by successive Governments, as hon. Members well know.
  When I was in the North-West, a point was put to me which had not previously struck me in this light. The difficulty about excellent communications is that products can go to the North-West as well as be built there and then go to the major markets in the Midlands or the South. That illustrates the importance, when industry is so mobile, of a region stressing its advantages and trying to overcome its image of bad industrial relations. For that reason, there is a heavy responsibility on all hon. Members in the North-West.
  Government efforts to support the North-West are not limited to the construction of factories or the provision of industrial grants. The MSC programme of special measures is helping to mitigate a good deal of the worst effects of unemployment, especially for the young. I shall leave it to my hon. and learned Friend the Member for Clitheroe (Mr. Waddington) to deal later with the points made about the MSC programmes.
  Nearly 53,000 jobs are currently being safeguarded under the temporary short-time working compensation scheme in the North-West, not including Cumbria. Nearly 9,000 people are taking advantage of the job release scheme, and nearly 1,000 are working in community industry schemes. For the young, the youth opportunities programme is giving a chance to those who would otherwise not have a job to gain experience of the world of work. Sixty-four thousand young people in the region joined in the period between April 1980 and April 1981. In addition, nearly 4,000 joined the short-time employment programme in the region over the same period. For these last two programmes the North-West received the highest allocation of resources of any English region over the last two years.
  All that demonstrates how much the Government are doing. The areas that I have been describing are all those in which the Government have a legitimate role to play, but it is vital—this is where we part company from the Opposition and where I part company from the general trend of the speech by the hon. Member for Kirkdale—that we recognise limitations on public expenditure, in two respects. First, there is the overall need to contain public expenditure in the interests primarily of industry and

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  commerce, which are constantly saying that lower interest rates and things of that sort most matter to them. When the hon. Gentleman accused us of monetary strangulation and referred to further financial cutbacks, he meant that he wanted to put up the public sector borrowing requirement by much more and that he wanted to see interest rates going up. I hope that he will tell that to industry and commerce, which are fighting to be competitive in the North-West. That is not the realistic way to create new and lasting jobs.
  The second limitation is the need for industry to solve its problems, to recognise its market opportunities and to achieve its own restructuring. Too much Government subsidy can shield and delay that process. Too much Government interference can push industry in wrong directions.
  The rates burden, to which my attention has been drawn, is one of the significant factors in discouraging businesses of all sizes, but especially small businesses. The new Socialist-controlled local authorities are beginning to claim that they have a mandate to spend more. They did not get that mandate from the business community. They should look to the danger that they will be causing. As in this House, Socialists all too often and all to simply see the spending of more taxpayers' or ratepayers' money as the panacea and then look on in astonishment as the effects of that work through when the bills have to be paid.
  It is noticeable that there are some very large increases in the North-West, and that by far the majority of them are coming from authorities that are Socialist-controlled. I hope that they will consider the need to contain expenditure in the interests of industry and commerce.
  Mr. Jack Straw rose—
  Mr. MacGregor: I hope that the hon. Gentleman will forgive me if I do not give way. He has only just come into the Chamber, and we have had a long debate already.
  The key to industrial and commercial regeneration—I recognise that Liverpool and Manchester were built on commerce—lies with management, the unions and the community. There is a need to show that the area itself is taking steps, not only to improve its industrial performance, but to create the new enterprises that will provide the wider and more stable economic base.
  I pay tribute to a number of developments in the North-West. These are essential if firms that are now highly mobile are to be attracted to the area. The Merseyside image has often been one of bad industrial relations. When I was in Germany recently with a member of the TUC from the Northern area, trying to attract inward investment to this country, the extent to which that factor emerged as a problem was striking. The region, and in particular Labour Members, could do a great deal to overcome the picture that has been built up. I am in favour of putting across positive steps all the time and of drawing attention to the self-help that is now being shown.
  As the Minister responsible for small firms, I am particularly delighted with what has been happening in the North-West in that connection. In May 1979 the staff were handling about 800 inquiries a month. The 11 counsellors were averaging about 85 counselling appointments a month. Now, with a staff of nine, there were almost 800 inquiries a week last month. Counselling appointments have trebled. The trend is upward, and it is particularly
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  significant that 50 per cent. of all inquiries are related to new start-ups. Not all of them will come to maturity, but the level of interest is most significant. I know that a considerable number of them have been caused by people being made redundant, but they are getting out and setting up jobs in the new small firms that will create the industrial future for the region.
  When I opened the new small workshop unit in the Wirral recently, I saw that the spirit of enterprise was very much alive. There was one young chap in particular who struck me with his enterprise. He had been in operation for only six to eight months, but he was already employing three people in the making of car hoods and 80 per cent. of his output was being exported to other EEC countries. [Interruption.] Labour Members must recognise that in the restructuring much of the new employment will come from small businesses, which will grow. That is the significance of the many measures, about 60 in all, that the Government have introduced since they have been in power, culminating in the loan guarantee scheme and the business start-up tax arrangements, which were announced by my right hon. and learned Friend the Chancellor of the Exchequer in the Budget.
  As well as providing new jobs, a greater stability is given to the economies of local communities when there is a much wider range of products and services. With the creation of the two enterprise zones in the region, at Trafford Park and Speke, entrepreneurs have an opportunity to demonstrate their abilities, free from some of the obstacles that local authorities and the Government sometimes place in the way of business men.
  A central theme of the Government's approach is the freeing of business men from unnecessary bureaucracy. [Interruption.] When constructive steps are taken, and when people from the region of the hon. Member for Kirkdale follow up with their own initiative, the hon. Gentleman tends to pour cold water on it. Some of the Government's initiatives have led to the creation of real jobs and to the creation of a good deal of new enterprise.
  The enterprise zones are an experiment. Ministers will look carefully at the results obtained in those zones, but it is already a fact that they have been greatly welcomed by the local authority concerned, and it is our hope that the opportunity that they represent will bring real benefit to the areas in which they are situated.
  I pay tribute to one other respect in which the North-West region is not only demonstrating its self-help, but has been a pioneer. I refer to the example of local enterprise trusts and other similar agencies, such as the Community of St. Helen's Trust, Business Link Ltd. at Runcorn, In Business Ltd. on the Wirral, which I visited recently, and the Sefton Enterprise Trust. The St. Helen's Trust in particular has been an inspirtion and a model for similar ventures elsewhere in the North-West. My hon. Friend the Member for Rossendale (Mr. Trippier) is very much involved with setting up a similar organisation in his constituency. Such initiatives, which harness the energies of all sectors of the community, are to be applauded.
  On a grander scale, the Government have created a channel for Merseyside's energies with the creation of the Merseyside Development Corporation. This will have £18 million in the current financial year to begin work on the regeneration of the disused and derelict dockland areas on each side of the Mersey estuary. I do not understand why Labour Members scorn this initiative, because often the need is to make use of the derelict land that exists in the

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  inner urban areas. Often, these areas are most attractive for new small business unit start-ups. Merseyside is, of course, only one of two areas with such a development corporation and its formation is yet another sign of the Government's concern for the region's situation.
  There are many examples of things in larger companies that are going right for the North-West. I have no doubt that incoming investors are impressed by the good news stories from the region, which show what the North-West can do. Hughes International's decision to assemble buses at Skelmersdale is a sign of confidence in the region, which belies the gloom mongers. Other signs of confidence are the orders for Leyland Trucks and Buses at Workington, for Cammell Laird from Canada, and for GEC at Trafford Park. Why should Ribblesdale Cement invest £22 million at Clitheroe, or UKF invest at Ellesmere Port, or Data Recording Instruments at Winsford, or Eaton Limited at Walkden, if the region had no future? They are all examples of new investment. That is exactly what is needed if we are to restructure industry.
  I have never denied that it would be foolish not to take full account of the problems of the textile industry. A number of companies continue to make good profits in the North-West. I refer, in particular, to Coloroll Ltd., in the constituency of my hon. Friend the Member for Nelson and Colne. For normal, protocol reasons relating to the House, he is unable to contribute to the debate. That company has done well in decorating materials and is moving into textiles. It is developing a large market for furnishing fabrics.
  At the end of the day, the North-West region, like the rest of the country, will benefit from the achievement of the Government's overall objectives of getting inflation down and of reducing interest rates to levels that are below the average of our major competitors. Indeed, interest rates are already at that level. The North-West will benefit from the successful transition from the declining to the new industries, from the stronger management decisions now being taken and from the more realistic approach to wage negotiations that is evident in many sectors of industry and commerce.
  To sum up, the Government are very conscious of the problems facing the region—which are longstanding—and are playing their full and proper part in creating the conditions in which the undoubted reserves of vigour, shrewdness and enterprise, which the people of the region can demonstrate, are able to flourish. But there are limits, financial as well as practical, to the aid that the Government can, or should, give. The Government's policies are aimed at giving every opportunity to those who help themselves—with courage, flair and initiative—to prosper. I have given some examples of self-help in the region, and I am sure that other speakers will tell the House what their constituencies offer in that respect.
  My final word is that while the current situation is difficult—no one denies that—there are also encouraging signs. Clearly, we live in a highly volatile world, and what happens in one major country can quickly have its effect on others. Clearly, too, conditions vary from industry to industry, and often from firm to firm within an industry. There are signs that the bottom of the recession has been reached and that there is some prospect of an improving economic situation. In those circumstances, it is vital that
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  the North-West, and indeed all parts of the country, should take the opportunities that an upturn will bring, and the Government are setting the conditions for that to happen.
  The debate can best contribute to the future of the North-West by demonstrating how ready so many in the North-West are, and have been, to take advantage of the new opportunities and to ensure that restructuring takes place. That is the only satisfactory way to reduce unemployment in the region.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): The House knows that neither I nor any of my successors has any authority to limit the length of speeches. However, 27 right hon. and hon. Members have shown that they wish to speak in this important debate. Even if hon. Members speak for only 10 minutes, some will be disappointed. I make a special plea for short contributions.
  5.13 pm
  Mr. Robert Sheldon: Hon. Members will be grateful to the Minister for telling us that he is aware of the problems of the North-West. I note his journey to the Wirral and his consequent claim to understand the problems of the North-West. That was wholly inadequate preparation for such a debate. Hon. Members will be impressed by the diversity of problems in the North-West. In my constituency, Mossley is not the same as Hyde, which lies in another part of Tameside in the constituency of my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry). Those who represent constituencies in the South may think that Reigate and Redhill have similar problems, but the North-West has a diversity of problems. The Minister's common approach showed that he failed to understand that there is a big difference between what he saw at the Wirral and what we see in our constituencies.
  The hon. Gentleman spoke about responsibility for the rundown in the North-West and mentioned overmanning, restrictive practices and wage demands. That shows that he has not been to many of my hon. Friends' constituencies or to my own. We do not have such problems. In his half-day visit to the Wirral he may have found such difficulties, but he did not find them in my constituency or in most other constituencies in the North-West. The problems of overmanning, restrictive practices and high wage demands do not exist in our areas. The hon. Gentleman has got the wrong region. He may find those problems elsewhere, but not in my part of the country.
  We face the problems of a Government-manufactured slump. The problems of the North-West are those of an over-valued pound and a high bank rate. Manufacturing in the Greater Manchester area still accounts for 38 per cent. of employment, compared with much less in the rest of the country. It is a manufacturing area. Unemployment, particularly in the manufacturing industries, hits us hardest. We do not have the soft under-belly of the service industries that exist in the South. We produce goods which we sell abroad and which give us a balance of payments advantage that other countries used to envy. Recently, that has been undermined.
  My constituency contains many small firms. The largest firm in my area is ICL, which lies on the borders of my constituency. Recently, 823 jobs were created but

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  390 people are to be made redundant. That firm has the highest employment in my constituency, although it has fewer than 500 employees.
  The Government do not seem to know what they are doing with one hand, when the other demolishes firms. Government assistance has been haphazard. ICL has been given an extended life from seven to 10 years. Instead of lasting seven years, Government-bought computers last 10 years. At the same time, 390 people have been made redundant at ICL. The Government should revise their policy. Computers were first invented in the Greater Manchester area, were developed, sold all over the world and copied. There has been considerable Government assistance, but the Government have failed to maintain it.
  ICL is not a typical example of industry in the North-West. More typical are the small firms with fewer than 500 employees. They face problems of subcontracting to large firms. As a result of the recession, large firms produce more of their own components, thus forcing greater burdens on the small firms. In the Ashton-under-Lyne travel-to-work area there has been a 114·8 per cent. increase in unemployment in just 12 months. That is the burden of our claim against the Minister. He will not find an answer to those problems by visiting the Wirral or any one small part of the country. He must understand our problems and become more aware of our difficulties.
  Even with an upturn in the economy it would take a long time to improve employment. I do not accept the rosy view about the upturn that is a-coming. I see little sign of it. Government spokesmen are trying to push up the economy by talking about it. There is evidence for that view in what Manchester chamber of commerce has said and done. It has met Members of Parliament from both sides of the House and has given us its view of the economy and the disasters that it sees ahead.
  Good firms, substantial firms, firms that have invested and firms that have a long record of progressive management are seen to be in as much trouble as other firms without that background. The chamber of commerce at Tameside has told us about the problems of unemployment and decline as it sees them. The Secretary of State for Industry has told us that he cannot assist because of what he describes as the broader aspects of his economic and industrial strategy. The Tameside employment strategy group is trying to bring about the necessary changes.
  One necessary change is the restoration of assistance for the assisted areas. It was all very well to talk about a lack of need to assist these areas when they had 5·6 per cent. unemployment—the rate in the Ashton-under-Lyne travel-to-work area—but in the assisted areas in the region unemployment has increased to 12 per cent. in 12 months: one in eight of the working population is unemployed. That picture has to be viewed rather differently, since it does not take into account unemployed women who do not register. We are speaking of an area where traditionally many women have sought employment not merely to earn pin money for themselves but to provide essential finance for the normal running of the community, of their households and of their families.
  Unemployment pay and loss of production costs up to £1 billion a year. There are 141,000 unemployed in the Greater Manchester area—doing nothing, receiving unemployment pay and wandering the streets. We should not accept that. It costs Britain £1 billion to look after those people and their families while they are doing nothing.
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  The Minister asks us what we want done. We want to put the unemployed to work and to give higher priority to the value of the pound, the high bank rate and the Government-manufactured slump.
  The area that I represent has seen great tragedy and great suffering. Much of it has been quiet and unnoticed except by those who do their work diligently as Members of Parliament or local councillors. They discover for themselves what is going on behind closed doors, where people with a pride in their work find themselves without employment. Ministers spend so much of their time in the more prosperous areas. When they visit the North-West they should discover what is happening in the area.
  Week after week in the North-West the certainties of the Minister's economic solutions are moving to doubts. We hope that the doubts will eventually change attitudes. I hope that a change of attitude will be one of the consequences of the debate.
  5.25 pm
  Sir Walter Clegg: The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) made a mean-spirited and unfair attack on my hon. Friend the Under-Secretary of State for Industry and on the Government. My hon. Friend has been in office a few months. He has his job to do in the South and in Parliament as well as in the Department. Many Ministers apart from my hon. Friend have visited the North-West since the Government came into office. It is nonsense to say otherwise. They have visited and they will continue to do so.
  I was glad to see the hon. Member for Liverpool, Kirkdale (Mr. Dunn) at the Dispatch Box. The hon. Gentleman and I have something in common as we are both battery-powered. His battery is a pretty powerful one because he made a long opening speech. I do not intend to follow his example.
  The hon. Gentleman was unfair to the Government and the previous Labour Government when he referred to the shift of NHS resources to the North-West. After the RAWP report the Labour Government started to shift resources to the North-West to correct the imbalance. The present Government have continued to operate that shift. The shift is not as fast as many of us would like, but it would be wrong to give the impression to people in the North-West that nothing on that account is being done.
  Having listened to the hon. Member for Kirkdale and the right hon. Member for Ashton-under-Lyne, one could be forgiven for thinking that unemployment is a new phenomenon in the North-West. In fact, unemployment has been growing over the past decade, during which Governments of both major parties have held power. It is dangerous to suggest that there is a bunch of magic wands waiting to be waved and that when that happens the problems will disappear overnight. That is not true. If magic wands had been available, the previous Labour Government would have waved them when unemployment started to climb during their period of office. Equally, I should expect my right hon. Friends to wave them now if they were available. There are no magic wands.
  Industry has been given many inducements to go to Merseyside. The inducements have been available not for one or two years but for a decade or more. Name the inducement, and Merseyside has had it. It has had special development area status and it will have the new enterprise

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  zone at Speke. Have those inducements and others made any difference to Merseyside's economy? Despite all the money that has been put into Merseyside, the sad truth is that Merseyside's economy is basically unchanged. Those in other parts of Lancashire have asked "What is wrong with the policy? Merseyside, with its high unemployment and great problems, has many facilities, yet it seems that the problems cannot be cured. It is wrong for those in Merseyside to be told "All you need is more money and all your problems will go away." I am certain that that is not the answer.
  The future of the North-West lies in the region's own hands. I shall give one or two examples from my own constituency. The port of Fleetwood has had a terrible time over the past few years with the rundown of the fishing industry. That does not mean that the town is down and out. Other developments are taking place and there are two that I shall mention specifically.
  One of the great engineering firms that repaired ships and manufactured winches was due to go out of business. However, the work force in half the factory grouped together, put in their savings from their redundancy pay and took a risk. They have had help from local government and the Department of Industry, but they have got the firm off the ground and it is looking prosperous.
  The other part of the firm was taken over by a local firm. It did not receive so much Government help but it is restoring the part of the firm of which it took control. At the same time new factories are being developed on the New Dock estate. Some factories are Government-developed and some are being developed by private enterprise. The sites are being taken up quickly and the factories are creating jobs. In addition, the port is gaining increased traffic from the roll-on, roll-off service and from the other services that it can offer. This a picture of a town with difficulties—but, thanks largely to the vigour of the inhabitants, it is overcoming them. That is happening all over the North-West. We do ourselves a great disservice to say that we are all down and out and that we do not have ideas. We have great industries such as British Aerospace and British Nuclear Fuels.
  Mr. StrawBoth nationalised.
  Sir Walter Clegg: The success of British Aerospace was based on the research and development of private enterprise.
  We do little good in these debates by decrying our region. As has been said, we have a wonderful network of motorways to connect us with the rest of this country and the rest of the world. The Government are not wholly responsible for the unemployment. Other factors are involved and it would be foolish of the Opposition not to recognise that. Unemployment cannot be solved by throwing money at it. All we can do to solve it is to help ourselves with what Government help can be reasonably made available. That is now being done.
  5.30 pm
  Mr. Eric S. Heifer: I want to speak about the problems of Merseyside. In the latest "Norwida Newsletter" we read that
  "redundancies are still running at a very high level. In the first four months of 1981 there were 31,666 confirmed redundancies (involving over 10 persons) in the North-West region, 8,062 of
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  which were in the Merseyside special development area. These figures compare with 23,730 and 5,600 redundancies respectively in the same four months of 1980."
  I put a question to the Secretary of State for Employment on 18 May, and I found that between May 1979 and April 1981 the numbers registered as unemployed in the Merseyside special development area had risen by 32,329, an increase of 41·3 per cent. The number out of work in Liverpool for more than two years—that is Liverpool, not Merseyside as a whole—is 14,855, and those who have been out of work for more than one year total 30,000. Those figures suggest, without a shadow of a doubt, the disastrous nature of the Government's economic policy.
  There have always been unemployment problems on Merseyside, because there was too much reliance on the port. The service industries flourished at the expense of engineering and manufacturing. That changed, to some extent, with the advent of the motor car industry on Merseyside. The Labour Party can gain much credit, because it provided all sorts of facilities for and assistance in getting the motor car industry to Merseyside.
  Closures are continuing to occur on a frightening scale. Since the last "Norwida Newsletter"—I cannot go through all the horrific closures, because there is a long list—Courtaulds in Aintree has got rid of 1,550 jobs, and there have been many others, which add up to a pile of closures in 20 or 30 firms. That is between one newsletter and another—not over several months.
  Mr. Kilroy-Silk: My hon. Friend mentioned the Courtaulds factory in Aintree, which, as he knows, is in my constituency. Will he confirm that that closure belies what the hon. Member for North Fylde (Sir W. Clegg) said? The closure was the direct result of the Government's economic policy, high interest rates, high exchange controls and lack of purchasing power because of cuts in public expenditure. That company, with a good product and work force, and high productivity, made a public statement demonstrating that its demise with the loss of jobs was directly attributable to the Government's economic policy.
  Mr. Heffer: My hon. Friend is correct. He and I had conversations and discussions with the management of Coutaulds. We made representations to the Government, as did my hon. Friend the Member for Bootle (Mr. Roberts), along those lines. The company pointed out the disastrous effect that Government policy would have if it was not changed. It was not changed, and our people are now out of work.
  There is also a long list of redundancies in the "Norwida Newsletter". I shall not give the names, as I do not wish to take an unduly long time. The American Canning Company is laying off 300 workers. Austin Packaging is to make 170 people redundant; Berwick Toy Company, 97; Cadbury Typhoo, 96; John Dickinson Stationery, 215; Glaxo, 92; Heat Treatment Engineering, 84; IMI Yorkshire Imperial, 200 and Kraft Foods, 370, staged over three years. The list could continue.
  Vauxhall Motors is making 2,900 workers redundant, and Metal Box Company at Aintree another 124. There are many others, one of which is not in the latest "Norwida Newsletter" list, because it has already taken place. Tate and Lyle has been in Liverpool for over 100 years, but it

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  is now in the process of closing down and only a handful of workers are employed there. All that is due basically to Government policy.
  There is mass unemployment in the Western world because we live with a stupidly organised economic system. That is the main reason, but we have a Government who make it worse. There is the problem of capitalism, which cannot solve unemployment, and the Government, because of their stupid policies, make the position worse.
  The motor car industry was the great hope for Merseyside, and it has been badly affected. An interesting pamphlet issued by TASS-AUEW Merseyside and North Wales divisional council, called "Merseyside Engineering—End of an Era?" is a disturbing document. I hope that the question mark at the end of the title remains a question mark, because if it were removed it would be the end of an era.
  The figures given in the pamphlet are worrying, because between 1971 and 1977—before the latest group of redundancies and during my time in office—the numbers of workers in the vehicle industry in Liverpool, not including the Ellesmere Port plant, fell from 21,000 to 18,000—a drop of about 13 per cent. The latest optimistic estimate from the Liverpool planning office is that there will be no more than 15,000 workers in the vehicle industry by 1986. Other, more pessimistic, observers put the figure at 10,000.
  The Merseyside figures show the decline of the port, with the south docks closed and most of the north docks under-used. We have witnessed the decline of the shipbuilding industry. Cammell Laird has recently won a good order for oil rigs, but it is still in difficulty. We have seen the end of the ship repair industry. I worked in that industry at the end of the Second World War and, as my hon. Friend the Member for Liverpool, Kirkdale (Mr. Dunn) said, there were about 20,000 workers in the industry in those days. Now there are 200, if one is lucky. There is nothing left.
  We have also seen the end of the sugar refining industry on Merseyside, and the motor car industry is in decline. Thousands of construction workers are unemployed. They are not all unskilled workers. Many are highly skilled craftsmen and their abilities are being wasted.
  On top of that come the cuts on public expenditure. The hon. Member for Liverpool, Edge Hill (Mr. Alton) is not here at the moment. When we last discussed the problems of Merseyside. I said that cuts in public expenditure and the attitude of the Liberal council had resulted in workers being made redundant. The hon. Gentleman said that none had been made redundant. In a sense, he is right, because no one has been laid off, but when people have left no one has replaced them. Thousands of workers have not been replaced by local authorities, in Liverpool and elsewhere.
  Other problems are associated with unemployment. According to the chief constable's report, the crime rate on Merseyside has risen by 6·9 per cent. He said that
  "crimes of violence against both persons and property have shown dramatic increases, despite the efforts to contain this type of offence."
  There is a correlation between unemployment and the rising crime rate. When youngsters and others have been out of work for a long time there is an incentive for some to take to crime. I do not blame them; I blame the system that is responsible for it. There has also been an increase in the suicide rate as a result of unemployment.
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  We need a clear policy to deal with the problems of Merseyside. Nationally, we need to reflate the economy and carry out the policies advocated in "Labour's Plan for Expansion". On a Merseyside basis, we need some clear ideas within the national policy.
  I am pleased to see that the hon. Member for Edge Hill has entered the Chamber.
  Mr. David Alton: Will the hon. Gentleman give way?
  Mr. Heller: No, I shall not give way.
  The policies of previous Labour Governments and of Tory Governments before the present Administration have succeeded only marginally. While I was a Minister at the Department of Industry, we made Merseyside a special development area and provided massive aid through the Industry Act. We were also reasonably strict about industrial development certificates. That was helpful, but we found that, despite that aid and the IDC policy, we were merely standing still. If we had not implemented those policies—and the present Government have relaxed the IDC policies—we would have been in a far worse position.
  We need to learn the lessons of that experience. Conservative Members suggest that we should abandon all aids and leave matters to the free market economy, but that is not the answer. The lesson that we have to learn is that the aid that we provide and its administration were not necessarily the best way of dealing with the problems. We have to go beyond that policy.
  One of the Government's answers is to set up enterprise zones. I believe that these mini-Hong Kongs will create more problems than they solve. Nationally, we must halt the Tory cuts, make good those cuts, carry out a programme of public works, train and retrain the unemployed, introduce selective import controls, extend public ownership with a national investment bank and take our oil resources under full public ownership in order to make sure that they are used properly and intelligently.
  All local authorities should bring out from the pigeon holes their plans for capital spending on construction. That involves the Liverpool city council and others, and they must receive assistance from the Government so that that can be done. I do not favour the ring road on Merseyside. That could be dropped, but other projects should be carried out. We must also help small businesses. The hon. Member for North Fylde mentioned the nursery units. They were introduced by a Labour Government. We need to step up that programme and not only build the units, but actively assist to get firms into them so that they can create employment.
  The Government must make good their cuts and allow more house building by local authorities and housing associations. The Liverpool city council should stop building houses for sale—when they are building any at all—and build houses for rent, because thousands of people are living in slum property or are on the housing list and there is a massive demand for homes to rent.
  We should also give more aid to the Mersey docks, so that we can develop the port in line with modern needs. We need to restore IDC policies on a much tighter rein, and we must build more training and retraining centres. We must also ensure that the motor car industry on Merseyside is saved and developed.
  We cannot divorce the problems of the North-West or Merseyside from the problems of the country as a whole.

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  There is no doubt that the technological revolution presents serious implications for future employment, and we have to face that fact. We need a new approach to work, the work ethic, hours of work and so on. We need a 35-hour working week, longer holidays, voluntary early retirement, sabbaticals for workers and more education schemes.
  I know that Conservative Members react with horror to such suggestions, but we should organise society so that we can do those things. We have the potential wealth and it can be created, but society can be organised properly only if we have a redistribution of wealth and a reorganisation of our economic system.
  Those things must be done. If the debate does nothing else, I hope that it will draw the attention of the people of Merseyside and the North-West to the hopeless failure of the Government and to the Labour Party's solutions.
  5.50 pm
  Mr. Robert Atkins: I have been greatly depressed by the remarks of Opposition Members. They have talked only about the bad news. There is much more happening in the North-West that is good news. It should be remembered that the North-West is not confined to Manchester and Liverpool. The region stretches from the Cheshire boundary to the Scottish border. Hon. Members representing other parts of the North-West get a little cross when perpetual attention is paid to Manchester and Liverpool.
  Preston has problems like anywhere else. There are also some good stories to which we should give our attention. Chief among them is British Aerospace, now a public limited company which, as a result of decisions taken by the Government, has had a successful share issue. I do not know the figure for the North-West region, but across the country, the take-up amounted to about 58,000 of those entitled to take shares in the company in which they work. The right hon. Member for Salford, West (Mr. Orme) said again recently that British Aerospace would be renationalised if Labour were returned to power. I shall be interested to hear how a future Labour Government intend to recompense large numbers of employee shareholders—whether terms will be generous or whether they will amount to stealing, as remarks in the past have suggested.
  British Aerospace is a successful company. I heard only today from my contacts in the Warton and Preston division that the training that is taking place at Cottesmore on the new Tornado being delivered to the Italian and German air forces and also to the Royal Air Force is proving even better than expected. All say that it is a wonderful aircraft and a tribute to the work force in the Warton division of British Aerospace. It would be tremendous if more aircraft were ordered by those not already committed to buying them. There may be scope in the Middle East and even among countries on the Indian sub-continent for further orders.
  There is a real possibility of a £500 million-plus extension to the contract that already exists for British Aerospace to provide just about everything for the Royal Saudi air force. This is the largest single contract ever signed by a British company. It is about to be renewed.
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  That must be good news for everyone connected with British Aerospace, both directly and through sub-contracts.
  Amazing work has also been done on the advanced cockpit constructed to a revolutionary design that will benefit aircraft throughout the world. A contract has recently been received for carbon fibre composite research work based essentially on the carbon fibre Jaguar wing.
  One or two decisions need to be taken on the replacement of the Jaguar aircraft.
  Mr. Kilroy-Silk: I am interested in what the hon. Gentleman says. He will, however, be aware that the title of the debate relates to the problems of the North-West. Is he not failing in his duty to his constituents, of whom 14,500 are unemployed, if he does not draw attention to their plight and put pressure on the Government who have caused the majority of that unemployment to change their policies and so ensure full-time employment?
  Mr. Atkins: I shall not give way again if that is to be the nature of any intervention. I accept what hon. Members say, that the debate relates to the problems of the region. I have already said, however, that there is more to be stated about the North-West than merely its problems. I have started by talking about some of the good things. I shall come to some of the problems and concerns in due course. The hon. Member for Ormskirk (Mr. Kilroy-Silk) must bide his time.
  A decision on a replacement for the Jaguar aircraft has been awaited for four or five years. It is urgently needed. The aircraft was originally the AST403 before becoming the European combat aircraft. It is now the light combat aircraft. A decision needs to be taken by the Ministry of Defence procurement executive and the RAF as soon as possible about the aircraft they want, to enable British Aerospace to give some attention to the matter.
  Some of my hon. Friends and I who are interested in aviation have recently been told about the investment-needed in production technology connected with the equipment required to make aircraft. I am informed that in 1970 the United Kingdom investment was one fifth of that of the United States. In 1978, our investment had dropped to one tenth of that of the United States. To make matters worse, our investment in 1978 was less than in either France or Germany, our primary European competitors. This is an area where investment is needed, whether from the Ministry of Defence or—more likely—from the Department of Industry.
  I should like to mention another success story that impinges on my constituency and also that of my hon. Friend the Member for Chorley (Mr. Dover) who will no doubt also refer to the matter in more detail if he is called to speak. I refer to the Leyland Vehicles T45 that gained the truck of the year award earlier this year. Only a month after its European launch, I believe that orders worth £2 million have already been achieved from Spain and Portugal. It is therefore wrong to concentrate merely on depressing stories. This is another success story for the North-West.
  Yet another potential success in the Preston area is the independent local radio franchise for which there are five competitors. This will provide jobs and focus attention on the administrative centre of Preston. [Interruption.] I am sorry that hon. Members, intervening from a sedentary

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  position, do not seem to like good news. I shall continue to spell out the good news so that people know that all is not bad in the North-West.
  I was privileged to be present recently when Prince Charles visited my constituency. He was particularly interested to visit Asian workers in the mills. He was impressed by the success story told to him by the Asian workers, not only about the product they made but also about the community relations in the area.
  Prince Charles also visited the Gujerat Hindu centre in the constituency of the hon. Member for Preston, South (Mr. Thorne) where he met a wide variety of ethnic groups. His visit proved to my satisfaction that, although there are problems in some parts of the country, race relations and community relations in Preston are extremely good. My wish is that they should long remain so. There is no place in Preston or in other parts of the North-West for racism and extremism.
  I should like to mention those people who were put out of the work by the Courtaulds closure soon after I became an hon. Member. It was no fault of this Government that they lost their jobs. I would not advise Opposition Members to enter into this matter too closely. They will discover, if they do not already know, that it was largely through the failure of the last Goverment that the mill faced those problems. The people of Preston know that the mill had been near closure for some time, regrettable though the eventual decision was.
  One or two of those employed at the mill who were put out of work used their redundancy money to set up their own small businesses. I recently had the great pleasure of being told by an Asian constituent at my surgery that, starting from nothing, he will be employing, in a new factory of which he has just bought the lease, 16 to 20 people. That is a tribute to an Asian who came to this country, with all the problems involved, who lost his job and has put the redundancy money to good use building his own business and employing more members of his community.
  I do not want to go on for much longer, because I know that my hon. Friends want to tell other good news stories about the North-West. However, I should draw attention to one or two matters of concern. First, if they did not already know it, the people of Preston must now realise the difference between having a Conservative council and a Labour council in control. Having the Labour Party in control has meant an enormous rate rise. During four years of Tory control of Preston the rates went down. As soon as Labour comes in, the rates go up, and we learnt only recently that a supplementary rate will be levied by the new Socialist Lancashire county council. People must get the message: under Labour the rates go up; under the Tories they go down.
  I am concerned about what appears to be at least a percentage increase in the crime rate in and around Preston. I know that it is no fault of the police. Only recently a distinguished and senior judge, the recorder of Preston, Judge Bill Openshaw, was tragically murdered in his own home. Many hon. Members on both sides of the House will have known him or known of him. That tragedy brought home to the people of Preston on their own doorsteps the fact that there is still a problem of law and order that needs to be resolved.
  I want to conclude by touching on one or two regional points. First—I suspect that Labour Members will agree—I should like Manchester airport to be given much
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  more attention as a gateway to the North-West than it has had so far. It is a well-run, excellent airport, with room for improvement and development. I hope that it will receive the attention that it needs, and that the Minister will refer to the matter in his winding-up speech.
  It was a great insult to all the Manchester men and women of all colours, creeds and politics who have loyally served Queen and country when the city council announced recently that it will have no more military displays by the Army in the city. That was an insult because the Queen's Lancashire Regiment, whose tie I am proud to wear today, and which it gave me when I visited it in Northern Ireland during one of its tours of duty there, has part of its catchment area in Manchester, in the Ashton-under-Lyne area. That decision is disturbing. I hope that Labour Members who believe that many of their constituents have served their country loyally will agree that the decision is an insult, and will work to have it changed.
  There are doubts, problems and concerns in the North-West, and Preston is not alone in that respect. But there is still plenty in my part of the North-West, as many of my right hon. and hon. Friends from the North-West will agree, to acknowledge, applaud and appreciate as good news. I do not want to hear continuously, as we do from Labour right hon. and hon. Members, only the bad news. There is good news, and we should tell the world that that is so.
  6.4 pm
  Mr. Alfred Morris: Naturally I want to speak mainly about Manchester, and I shall do so briefly.
  In the view of many Mancunians, the pre-sent Government have inflicted more grievious havoc on the industrial life of the city than Hitler and his bombers could ever have hoped to accomplish. Speaking as one who was born and bred in Manchester, I can never remember a time when there were so many silent factories in our city, or so many idle hands.
  Never before have there been so many jobs crying out to be done or longer dole queues of people ready and able to do them. Nor, in my lifetime, have the hopes and plans of our young people been so grossly betrayed. "We have been thrown straight on the scrap-heap from school" was how one jobless young Mancunian put it to me.
  If these seem strong charges, they are totally endorsed by the facts. Moreover, the facts speak eloquently for themselves. Manchester is a city that, as successive Governments readily saw in the 1970s, has exceptional needs, requiring special kinds of help. Our needs mainly flow from Manchester's having been the home of the Industrial Revolution and previous Governments freely and rightly accepted the case for special help.
  The inner city partnership is one important example of the Labour Government's approach. Under the present Government, however, unemployment has rapidly increased and the loss of assisted area status gravely compounds our problems. There has also been a devastating cut in grant from the Government for housing and other services and we are now considerably worse off than we were when the inner city partnership was first thought of four years ago.
  I said that the facts speak for themselves. Let me, therefore, quote just some of the more striking facts to the House. In the past two years, unemployment in the

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  Manchester travel-to-work area rose from 5·2 per cent. in May 1979 to 11 per cent. in May 1981. That means that unemployment has more than doubled in the past two years. In 1978, there were six or seven job vacancies for every person registered as unemployed.
  At the latest date for which figures are available there were 35 unemployed people for every vacancy. Nearly 30,000 people under the age of 25 are now unemployed in Manchester. These young people comprise about 40 per cent. of the city's unemployed. In the December quarter of 1980 there was an unprecedented and deeply worrying fall in industrial demand for electricity in the city of 12·44 per cent. compared with the same quarter a year before.
  In spite of high unemployment among building workers, new house building has had to be curtailed and the city is unable to keep its housing stock in proper repair. At the same time, Manchester's ancient sewerage system is collapsing and will get steadily worse because of the Government's restrictions on spending by the North-West water authority. As for our highways and transport, the Government have cut capital expenditure per head below that of any other metropolitan county.
  Some 28 per cent. of Manchester's population has been shown to come within the Government's own definition of "poverty" and the figure is as high as 40 per cent. in nine of the inner city wards. More than 28 per cent. of the city's schoolchildren receive free school meals, compared with 24·4 per cent. in Liverpool, 18 per cent. in Birmingham, and 9·9 per cent. nationally. Over 42 per cent. of Manchester's council tenants receive supplementary benefit or rate rebate.
  This is an appalling catalogue—but not an exhaustive one—of the facts about how the present Government's policies have damaged the city of Manchester and its people. On 24 March I went with a deputation of other Manchester Members and people from every walk of life in the city to see the Secretary of State for the Environment about our current problems. It was a disturbing meeting, which proved beyond doubt that the right hon. Gentleman was not clear about the essential facts of Manchester's special problems. Indeed, it was the fairly general view among my colleagues on the deputation that we had been met with a mixture—a fairly equal mixture—of arrogance and ignorance.
  The right hon. Gentleman had only two main remedies to offer; first, that the city council should sack more people and, secondly, that it should raise rents to even higher levels. Yet, scandalously, the Secretary of State had no idea what existing rent levels were in the city. The town clerk had to write to him on 14 April confirming the facts that we gave verbally at the meeting on 24 March. What the town clerk's letter confirmed was that, including rates and water charges, the tenant of a three-bedroomed council house was paying £18·81 a week. But the Secretary of State still demands that Manchester's rents should be further increased.
  Nor was the Secretary of State aware, at the meeting on 24 March, of the full extent of Manchester's loss of grant aid under the present Government. As the town clerk also said in his letter of 14 April, we have already lost £17·5 million in rate support grant, the equivalent of a rate increase of 23·1p. On top of that we have lost some £14 million in housing aid and are now faced with a crippling further loss through so-called "clawback" of £8½ million
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  in Government grants. Those cuts of £40 million—and that is a minimum figure—add up to a policy of vindictive bias against the city that I represent. It is a policy that is also deeply irresponsible against the background of the present jobs crisis and, indeed, in some respects, a self-defeating policy.
  Take, for example, the effect of the Government's cuts in money available for social services projects. I had a reply recently from a DHSS Minister showing that for the year ended 31 March 1980 the average daily cost of treating a patient in an acute hospital was approximately £55, or over £20,000 a year. The average daily cost of maintaining a resident in a local authority home for the elderly in the same year was £9, or £3,276 a year. Yet many elderly people will find themselves unnecessarily in hospital if the Secretary of State for the Environment continues to cut spending on the local social services that can provide the alternative to hospitalisation.
  The best way to spend money in this field is to give the right help, in the right place and at the right time, and for the Government to put extreme pressure on local social service authorities to cut essential expenditure is as crackpot as it is inhumane. I would have thought that even right hon. and hon. Gentlemen opposite could see the logic of the figures that I have just quoted and the self-defeating stupidity of the Government's priorities in this important field.
  Yet the prime responsibility for this, as for other stupidities, rests not with the Secretary of State for the Environment. He is but the Prime Minister's errand boy in one Department of State and it is thus to her that all of us must now address ourselves. Other towns and cities in the North-West will have their own messages for the right hon. Lady, and they will be as plain spoken as they are urgent. Manchester's message to the Prime Minister and her whole pound-foolish Government is both clear and traightforward—"Either change the disastrous course you are following or for God's sake go."
  6.12 pm
  Mr. Den Dover: We have heard about the problems of industry today. I want to talk about industry, but I also want to talk about the Health Service and the new towns.
  In far too many areas in the Health Service we have wanted a local voice in health provision, casualty services and local health services in general. For far too long the North-Western regional health authority has not responded to those local wishes. The hon. Member for Liverpool, Kirkdale (Mr. Dunn) said that Liverpool wanted not two district health authorities but one large one. The opposite is the case in my area of Chorley and South Ribble. In the large Preston district of 330,000 people we have had little say, if any, in the hospital provision and what should be a local health service.
  It is no good saying that these things are not important, because industry will not set up in areas where there is no casualty service, where the hospital is not large enough to give a full range of facilities, and where first-class local health services cannot be provided.
  The Merseyside development corporation has been mentioned. We must not fall into the trap of providing more and more rented homes in that area. Successive Governments fell into that trap, until the recent decisions by the Secretary of State for the Environment in the central

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  Lancashire development corporation area. The original intention there was to provide three houses for sale for every one for rent.
  The Labour Government completely altered that balance. Instead, they decided to have three houses for rent and only one for sale. That completely unbalanced housing in the area, where previously there was a record of 62 per cent. home ownership. As a result we have massive housing estates that look completely out of place in the green fields of central Lancashire. It is a repeat of what happened in Kirkby and Skelmersdale, where now we see vast housing estates that have been completely vandalised, allowed to rot, and sold off—three-bedroomed houses sometimes being sold for £3,000 or £5,000. That cannot be a sensible use of public money. We in central Lancashire therefore welcome the statement made by the Secretary of State for the Environment on 4 February, that in future the concentration will be on providing the infrastructure and jobs, and that there will be no more rented housing but, instead, housing for sale.
  Mr. Michael McGuire: The hon. Gentleman is overstating the case, certainly about Skelmersdale, which happens to be in my constituency. There are pockets—I repeat, pockets—where, because of unemployment and social problems, some of the houses have been vandalised and sold off, but the hon. Gentleman should not exaggerate and draw the conclusion that that will happen in his area because it has opted for more public housing than he wants.
  Mr. Dover: I thank the hon. Member for Ince (Mr. McGuire) for his interjection. I should welcome the chance to tour the area with him. I could show him not hundreds bur thousands of houses in that state. What worries me is that we shall have a repeat of that performance in central Lancashire.
  We already have many social problems in the Clayton Green area and the Moss Side area at Leyland which have been caused by those new residents. It can be argued that it is right and proper to have rented housing in that area because of the waiting lists. There are some waiting lists in Chorley and South Ribble and Preston councils, but they are not large waiting lists. If local residents want to rent a house they cannot have one. They are told "That is for workers from outside the area—the key workers." Yet the jobs provided by the central Lancashire development corporation are only warehousing and distribution jobs. There are not the massive manufacturing concerns that we had in the new towns in the 1950s and 1960s.
  The Conservative Government have solved the problem. The housing programme was being taken in the wrong direction. Now we are going in a direction that will give better value for money. The money is to be spent on infrastructure and jobs. Where homes are needed, private developers will build them at their expense and risk, and will sell them if there is a market for them. We shall end the launching of massive programmes to provide rented housing at uneconomic rents, disturbing the social balance of the area.
  The main emphasis in this debate should be on the industrial needs and problems of the area. They vary, of course. I dispute what the Minister said earlier about large wage increases, restrictive practices and difficult industrial relations. That is true in some residential areas such as Merseyside, but only a few miles outside that area, in
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  Chorley and South Ribble, we have first-class industrial relations and a work force that is enthusiastic and hard working. It can produce profits, whether in small, medium-sized or large firms, and whether in the public or private sector. I implore any industrialist who is listening to this debate or who reads Hansard to look hard at the area of Chorley and South Ribble and invest there. That would be a wise decision.
  In the case of large firms, we are blessed in the North-West with defence expenditure by the Conservative Government and by nuclear energy expenditure. In Euxton, where there is a large Royal ordnance factory, people are wondering what is to happen to the ROF organisation. They would welcome an early decision to carry on as now. Perhaps there should be a better marketing organisation. Perhaps some of the restrictions on recruitment should be lifted.
  Firms want the problems to be resolved so that they can move into new roles, expand their production, penetrate more export markets and produce some benefits for the local community. Currently, they are at sixes and sevens, wondering what is happening. They are waiting for an early decision.
  Many engineering companies in the energy area welcome the Government's actions. We have the advanced gas-cooled reactor stations and the potential of pressurised water reactor atomic stations. Firms are gearing up to meet the demand. For far too long there has not been a nuclear energy programme in Britain. The orders are now filtering through, although slower than we had hoped. Medium-sized firms have more flexibility than large firms and public sector-based companies, such as Leyland. They can penetrate the export markets while at the same time keeping their original customers.
  Although there has been a reduction in labour forces, it is by no means due entirely to the Government's policies. I have heard many industrialists say "We do not want to say this openly, but we welcome the chance to offload some of our surplus labour". They are producing as many goods, if not more, with a 20 per cent. smaller labour force. That is a measure of the underlying ability of firms in Britain to raise productivity and to compete in world markets.
  Reference has already been made to those with redundancy money setting up firms. I have had experience of that happening in both the South and the North-West. It may appear to be odd, but, as the hon. Member for Liverpool, Walton (Mr. Heffer) said, it is a redistribution of wealth. Instead of people working for large companies or public corporations they are investing in their skills and knowledge, carving their own markets and becoming profitable. They are even penetrating the export markets. That has happened in the Chorley area, which has left behind the old textile industries and moved into new technology. The Robot factory is setting up on the Walton Summit estate. It was recently featured on television when the Prime Minister looked at the robotics exhibition. Britain should be moving into such areas.
  Some hon. Members mentioned the problems in the construction industry. There are many small and medium-sized builders in my constituency who say that the workload is good but that they have difficulty in obtaining skilled men, such as bricklayers and carpenters. The 300,000 unemployed in the construction industry are not

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  a true indicator of the difficulties faced by employers throughout the country in getting construction projects built on time and within financial limits.
  From my experience on the ground, the position in the North-West is not as bad as the picture painted by Opposition Members. A new spirit is abroad. There is a change in the whole emphasis and set-up of industry in the North-West, which must be for the good of the country. Industry is cutting out the dead people—those who have not contributed—and creating new markets. It is penetrating the export markets. With the new mood and, hopefully, the new industrial relations legislation to be introduced during the next Session, we can move on. We have been through a period of great difficulty. We can now build new strengths into the industries of the North-West.
  6.23 pm
  Mr. Robert Parry: I shall follow the line taken by my hon. Friends the Members for Liverpool, Walton (Mr. Heffer) and Liverpool, Kirkdale (Mr. Dunn). As a Liverpool Member, I wish to deal mainly with the problems facing Liverpool and Merseyside. I have been chairman of the Merseyside group of Labour Members since 1976, succeeding my hon. Friend the Member for Kirkdale in that post when he was appointed to the Northern Ireland Office. During the past few years my hon. Friends representing Liverpool constituencies have fought against the massive job losses in Liverpool and on Merseyside.
  My hon. Friend the Member for Walton mentioned the inner ring road, which has caused much controversy during the past couple of years. It has been opposed by the Liverpool city council, the trade unions on Merseyside and the Liverpool and Labour groups on the county council, but it has been fully supported by the Tory group on the county council and the Tory Government. More than £50 million of public money will be spent on a road that nobody wants. It has been opposed by residents, the trades councils, and church leaders.
  A couple of weeks ago there was a resounding victory for the Labour Party in the county council elections on Merseyside. A week before the elections, the Conservatives realised that they were in danger of losing control of the council and called an urgent meeting to discuss tenders for the next leg of the inner ring road contract. The Tories knew that they would probably be beaten in the elections but they carried on with the tenders regardless of the fact that Labour councillors refused to attend the meeting. The county council is now under Labour control. Labour councillors were elected on a mandate to stop the inner ring road being constructed.
  I recently met the leader of the Labour council who told me that if the contract was stopped now a surcharge of £500,000 could be imposed on councillors opposed to the ring road. It is disgraceful that a meeting should have taken place to discuss the tenders and to continue the contract when the Tories knew that they would not be re-elected to carry out the eventual responsibilities. Any surcharge should be imposed on the Tory councillors who pushed through the decision.
  Mr. Alton: What is the attitude of the hon. Gentleman's colleagues on the county council towards the threat, which I know is a real one, of a possible surcharge?
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  Will they nevertheless go ahead with the abandonment of the remainder of the ring road, even if they have to proceed with this leg?
  Mr. Parry: I understand that the county council is taking legal advice about the surcharge. It intends to send representatives to London to obtain the best possible advice. A meeting will be held in Liverpool tomorrow to discuss the matter. If the contract proceeds on the next leg to the end of Scotland Road I, the Labour councillors in my constituency, and the Labour group on the county council will then stop the ring road.
  I have the unenviable record of representing the constituency with the highest level of unemployment of any constituency in Britain. In reply to a question in November the Minister said that the startling figure of almost 19,500 registered unemployed had been reached in that small inner area constituency of about 33,000 people. That is an appalling figure. More than half the people in central Liverpool are unemployed.
  Last week we were given a lecture by the Duke of Edinburgh on the joys of being unemployed. The Duke has never worked and does not know what it is like to be unemployed. He referred to those with qualifications being able to find jobs. My colleagues from the Liverpool area—indeed, from the whole of Lancashire—know thousands of youngsters with good qualifications who have been unemployed for a couple of years. They cannot find work. I wish to remind the Duke that hundreds of youngsters in Liverpool were half-way through their apprenticeships when they were thrown on the scrap-heap. I bitterly remember the 170 young apprentices at Tate and Lyle who, when half-way through their apprenticeships, were thrown on the dole.
  I get sick and tired when Ministers wring their hands at the Dispatch Box, like Uriah Heep, and hope that something will turn up. We are given the same excuses time after time. We have been given them today.
  On 4 June, I asked the Prime Minister to visit Liverpool to look at the effects of her Government's policies on unemployment. She trotted out what has been trotted out today—that Merseyside is a special development area, and that we shall see the setting up of an enterprise zone and an urban development corporation. Merseyside was granted special development area status by a Labour Government. The Tories cannot claim glory for that.
  I should like the Minister to deal with two specific problems that have been bothering me. How many jobs will the enterprise zone create? Will it create 50, or 80, or 100? No one seems to know. When can we expect to see jobs provided by the urban development corporation? Will it be in two years' time or three years' time? We on Merseyside cannot wait that long.
  My hon. Friend the Member for Walton has rightly given a number of facts and figures about Merseyside companies which have closed and about the job losses, which run into thousands. A couple of hundred jobs over the next year or two will not answer Merseyside's problems.
  In replies to questions that I tabled only last Friday, I am told that the number of closures involving redundancies for 10 workers or more between May 1979, when the Tories were elected, and May 1981 was 173, involving 13,590 workers. More important, however, the total number of redundancies which have been officially declared since May 1979 is 41,310. These are shocking

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  figures. They mean, in effect, that 400 workers have been declared redundant every week that the Tories have been in power. The Tories were elected to power saying "Labour does not work". Those figures show clearly that Toryism does not work.
  The Government say that jobs will be provided by the enterprise zone and the development corporation. It reminds me of the White Rabbit in "Alice in Wonderland" who talked about jam yesterday and tomorrow but never jam today. We never had much jam yesterday. We are promised jobs in the future. For us it is jobs yesterday and jobs tomorrow but never jobs today. We desperately want the jobs today.
  The Government's monetary policies are deliberately causing unemployment. In the policies to keep down inflation, the Secretary of State has deliberately accepted that at the end of this year we may see 3 million unemployed. The excuses are still being trotted out. I believe that the Government do not give a damn about job losses. Members of the Tory Front Bench are liars when they talk about unemployment, because they do not worry about unemployment. What we want from this Tory Government is a U-turn. We want to see the implementation of the plans raised by my hon. Friend the Member for Walton for resolving the problems of unemployment on Merseyside. We need a U-turn and the urgent provision of jobs on Merseyside.
  6.33 pm
  Mr. Barry Porter: I am sorry that the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) has left the Chamber, because he said the one thing with which I positively agree—that the North-West as a region does not exist except as a geographical entity. The diversity of problems and interests makes these debates—if that is what they are—a charade.
  What has tended to happen today is that we have not talked about our region as a region. Various contributions have shown problems in particular towns or parts of the region, but at no stage have we been able to talk about the region, because it does not exist. Therefore, any attempt to talk about an overall solution to these diverse problems is dangerous nonsense.
  Like any other part of the country, the North-West will become more or less prosperous, depending on the success or otherwise of the Government's economic strategy. That stands out a mile. The grave reality of our national economic position has at last, rather nastily, come home to the people whom I represent on Merseyside and those in the North-West generally.
  I do not think that the people of this country—certainly not those of the North—are so stupid that they do not realise that for a generation or more we have been indulging in a genteel rake's progress. It is worth repeating that we have paid ourselves more than we have earned. We have produced less than we could have done. We have indulged in public expenditure on a massive scale—very often for the best of social motives. That has been a short-term palliative.
  Mr. Alton: I agree that much money is wasted on spurious things, such as the ring road about which the hon. Member for Liverpool, Scotland Exchange (Mr. Parry) spoke. There are many other examples. Nevertheless, does the hon. Member accept that a probable cost of £6,000 a
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  year per man who remains unemployed is public expenditure as well, and that paying people to do nothing is surely one of the silliest ways of wasting public money?
  Mr. Porter: If that were likely to continue in the long term, the hon. Gentleman would be correct. It would be much better then to pay people to do something rather than nothing. But if it means, in the short term, that some people will be unemployed and the result of that is to defeat inflation, or assist in its defeat, his argument falls.
  Over the years we have also been indulging in the cruel pretence that jobs exist in various industries when clearly they have not existed. The result of that cruel pretence has been to make those uncompetitive industries even more uncompetitive, and to make even greater unemployment in those industries inevitable in the long run. We have done it with steel. We did it with shipbuilding, and to some extent with ship repairing. We did it with the docks in Liverpool, as the hon. Member for Liverpool, Kirkdale (Mr. Dunn) knows only too well.
  By trying to be pleasant and humane and by using lots of other people's money, we have made the problem infinitely worse in financial and human terms. If we cared to address our minds to it, we all knew that this nonsense had to come to an end, but not many of us—I include myself—were prepared to face the unpalatable truth, which is that genuine prosperity would involve a period when a rise in living standards had to halt and marginally to decline while we sorted ourselves out.
  That is what the past two years have been all about. That is why Opposition Members have been reeling off their statistics today. It is politically wonderful for them. It gives them something with which to attack the Government. But things need not have happened as they have if we had had some realism from the previous Administration. If that Administration had dealt with the steel industry and with the docks in Liverpool as they should have been dealt with, all this need not have happened in the way that it has. The task is harder now than it has ever been.
  The alternative strategy of deficit financing, which is what is being offered, by borrowing and printing, is a further cruel deception. The bill for the borrowing must be paid in the end. It can be paid for only by increased production and productivity. From that alone comes greater national wealth. That does not and cannot come basically from Government expenditure. There is no such thing as a free meal. I think that the people of the North-West understand that only too well.
  I offer this thought to the electors of Warrington, if they care to heed it. So far as I understand his party's economic policy—although I gather that we are not supposed to understand what it is—the elegant gentleman from Brussels is offering them a rehash of those economic policies that have brought us to the edge of disaster. Yet that policy is presented to those hard-headed, commonsense people in Warrington as though it were something new.
  Mr. Alton: Will the hon. Member give way?
  Mr. Porter: Not in this case. I understand that the Liberals have withdrawn from Warrington.
  I would like to believe that the demonstrable common sense of Warringtonians will not be deceived by a succession of glib platitudes sandwiched by clichés. When the television crews have gone and the clever gentlemen

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  who write in the Sunday newspapers have returned whence they came, Warrington will still have to earn a living. The idea that at some stage in the future a great and wonderful Government will be created by proportional representation will not help them one jot in the near future.
  The Government, and especially the Prime Minister, have been telling the truth about what has been going on for too long. I am told by Members of the Opposition, boringly and repetitively, that she has frequently said what the truth is. Unless and until we can defeat inflation there is no future—not for the country, not for the North-West, not for anyone.
  It has been argued by Social Democrats in the past that one finances public expenditure by creeping inflation. That argument was advanced by the late Tony Crosland and others. The trouble is that inflation does not creep. One cannot control inflation so that it is reduced to the 1 per cent. or 2 per cent. that we would like to see. We have seen what it does. If the people who advanced that argument in the 1930s and 1940s had seen what inflation did to the country they might have revised their opinions.
  What we are seeing today is the result of a hard two years. We are seeing the signs that what the Prime Minister, the Government and the Chancellor of the Exchequer have been saying is right. We shall see more evidence of that during the next two years.
  Solutions to the problem in the North-West were offered by only two Opposition Members. The hon. Member for Liverpool, Walton (Mr. Heffer) offered us State Socialism. He is right in saying that it has never been tried before. He offered us a solution to the problem of long-term unemployment that has also never been tried before. He suggested that there should be shorter working hours and that everyone should have more holidays. He did not deal with the obvious difficulty in that argument. Unit labour costs would be pushed up immediately and industry would be made more uncompetitive.
  I am not one of those who would say in the House that unemployment will be conquered in the next two years. That will not be so. In an upturn, a fair number of people who are now unemployed will get back into work, but it has not been said often enough in the House that as a country we must face the undeniable fact that a large number of people will be permanently out of work in one way or another. We do not know what that figure will be, because there will be new and different industries. It is difficult to conceive that they will be labour-intensive industries. The Minister mentioned a factory that he opened in my constituency. It is a profitable and good factory, and has a happy work force—there are 13 people. That is the sort of work force that will run factories in the future.
  Instead of the futile nonsense of hurling abuse and statistics across the Chamber, is not it infinitely more sensible to start addressing our minds to the problem of how we will occupy the time of the people who will not be working, in the old sense? The hon. Member for Walton touched on the problem and talked about a rejigging of the work ethic. I do not pretend that I know what the answers are, but I believe that occasionally we should debate something sensible, like that, rather than indulge in party political rhetoric all the time.
  One of the enormous problems in my constituency is youth unemployment. I do not know whether other hon.
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  Members have received the document published by Colt International. I read it on the train. I do not know whether it is an answer, but I commend the Government and every hon. Member to read it. Its title is: "Encouragement of Youth Employment Scheme". In essence, it is a scheme for tax relief to companies in return for employment in proper jobs with proper training for those aged 21 and under. That is a brief resumé of the scheme.
  I advise people to read the document, because while the Government schemes now in operation offer temporary alleviation that will not be enough for young people in the long term. If we are concerned about the long-term prospects for young people we must act swiftly and decisively to try to deal with youth unemployment. If we do not do so we shall live to regret it. That solution could be instituted fairly rapidly if the Government wanted to accept the principle.
  Mr. Nicholas Winterton: I believe that every hon. Member will have received that document from Colt International. I would be obliged if my hon. Friend could go into it in slightly greater detail. It worries me that in some areas many companies are not making a profit, which is why they are not taking on young apprentices to train them. That training is urgently required. Many companies would like to take up Colt International's initiative, but are not able to do so. They wonder how the Government can help firms that are not making a profit, so that tax relief can be given prior to taking on those people.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): In view of my predecessor's appeal for brief speeches, I hope that the hon. Gentleman will not be led too far astray by that appeal for detail.
  Mr. Porter: I would not dream of doing that. As I know that every hon. Member has a copy of the document about that scheme, I do not believe that it will be necessary to go into detail at this stage.
  The solution to which I have referred has the advantage of being simple, profitable and non-bureaucratic, which is presumably why no one has taken it seriously so far. There must be other suggestions from other people and other companies on the same or different lines to try to deal in the short term with the problem of our young unemployed.
  On Merseyside our problems are not all industrial and economic. We also have political problems. The victory of the hard Left in the recent county elections is reflected by the same people dominating the Labour Party on Merseyside. It is not for me to intervene in private matters, but the hon. Member for Liverpool, West Derby (Mr. Ogden) has not merely been on the hit list; he has been hit, although he is not yet down and out. It has been said many times that the Labour Party owed more to Methodism than to Marxism, but I doubt whether that is true of Merseyside today.
  It is food for thought that the Labour opposition on the Liverpool city council voted vigorously against the enterprise zone. It mentioned every conceivable objection to the zone, apart from its real one: it fears that it might work.
  Mr. Allan Roberts: Is the hon. Gentleman aware that many business men and industrialists on Merseyside, particularly those involved in bonded warehousing, are also opposed to the enterprise zone? In

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  my constituency the employers, who vote Conservative, tell me that unless they move into the zone they will face unfair competition, as their main cost is rates. The enterprise zone is not likely to create new jobs; it will merely allow jobs to move from the inner city to Speke.
  Mr. Porter: Those arguments are advanced, and it is not for me tonight to defend the concept of the enterprise zone. I was merely explaining why some of the hon. Gentleman's colleagues on the city council had voted against it. They fear that it may work. The Labour Party on Merseyside has a vested political interest in failure. Its members do not want things to get better, except on their own terms, under their own type of Government and with their own type of docile Member of Parliament. If things got better every argument that they had would be destroyed.
  Finally, I come to a minor problem in the context of the debate, although it is a major one for many people who live in Ellesmere Port. Despite contrary arguments, one of the most popular parts of the Conservative manifesto concerns the right of a tenant to buy his council house. The legislation went through the House and became law, but not one house has been sold in Ellesmere Port since that blessed day. I cannot blame the council for not being keen to sell, as that is its political view, but I do not like the way that it is avoiding its obligations under the Act. What it is doing is clever, but I am not sure whether it is legal.
  Will the Minister examine the policies being pursued by the Ellesmere Port and Neston borough council to avoid its responsibilities? The council, instead of having the properties valued by its own valuer, put them out to the district valuer, which slowed the process down.
  Mr. Roberts: That is allowed for in the Act.
  Mr. Porter: I appreciate that, but the council had sufficient staff of its own for the valuation. Now that the valuations are coming back, the council is disputing them with the district valuer.
  Mr. Roberts: That is also allowed for under the Act.
  Mr. Porter: That I doubt.
  The council wrote to a constituent of mine stating that it was charged under section 10 of the Act with fixing the price at which a property should be sold. That is true, but, having appointed the district valuer to fix a price, I believe that it is a negation of the Act for those who appointed him to dispute it. I hope that the Government will examine the matter.
  The council is using a legal or illegal device there, but, in addition, what is reprehensible, vindictive, mean, spiteful, petty and any other adjective that I can think of is the council's refusal to carry out its obligation as a landlord by refusing to paint and repair houses for which it is responsible merely because tenants have shown an interest in buying them. That is utterly disgraceful. The Minister should take powers to do something for people who have done nothing more than exercise their statutory rights.
  6.56 pm
  Mr. Dan Jones: I shall with studied deliberation deal only with unemployment, and I shall allow nothing to stand between me and the subject. Other hon. Members wish to speak and I want to make room for them to make their contributions.
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  I draw to the attention of the House a statement by the hon. Member who is now the Under-Secretary of State. His statement was relevant to North-East Lancashire, and not everyone pays attention to the area. It is considered sufficient to refer only to Merseyside and Manchester, although North-East Lancashire plays a definite part in the region. I shall deal with the area. I supported the statement when it was made. If the hon. Gentleman made the statement again from the position that he is now privileged to occupy, I should support it again. He stated:
  "That this House draws the attention of Her Majesty's Government to the serious problems still facing North-East Lancashire; and urges the Government to pursue policies which will help to stop any further drift of population away from the area and will encourage industry, widen educational opportunities, improve the environment and communications; and give every possible help to those living in North-East Lancashire in their resolve to make the area a great place in which to live and work."—[Official Report, 14 June 1974; Vol. 874, c. 1991.]
  Hallelujah to that. Unfortunately, the area is not that at all.
  The statement was made on a Friday morning, exactly seven years ago. Every hon. Member on both sides of the House supported the motion. It was to his credit that the hon. Gentleman, whom I respect, moved it, although I doubt whether he would move it against his Government.
  Let me deal with some of the issues raised. The hon. Gentleman referred to communications, intermediate area status and textiles. I shall limit myself to those three aspects. North-East Lancashire is a highly industrialised area, but its communications have remained substantially what they were at the turn of the century although, I am happy to say, in six months the road communications will be complete.
  I was particularly friendly with Sydney Silverman, who at one time represented Nelson and Colne, and we went to see Ernest Marples, who was the impresario at the Ministry of Transport. It was not a bit of good Marples playing the old soldier with Sydney, who was an extremely erudite man. He was probably one of the shrewdest Members of Parliament in the history of this House. The force of his logic compelled Marples to go on record as wanting to create the type of communications that Sydney had asked for from Manchester into North-East Lancashire. Sydney Silverman and Marples are both in their graves, but the promise was never fulfilled and we have suffered ever since as a consequence.
  Who will dispute that transport costs can make or break a company or prevent it from coming to an area which it otherwise might have chosen? Only a fool would deny it. That is why we have earnestly sought this for 21 years. I speak for North-East Lancashire. Others may speak for Manchester and Merseyside, although I must say with regret that I do not believe that Manchester and Merseyside care very much for North-East Lancashire. [Interruption.] Others are entitled to their opinions. I am entitled to mine. I am not convinced otherwise, unless evidence can be produced. I shall reveal in a moment where the evidence can be found for my belief and I shall be prepared to stand by that evidence.
  It has been said today that the work force has not played the game. That might be true in other parts of the country. Having spent 23 years in Burnley, I can say challengingly that we made Frank Whittle's engine possible at the very time of the 1939–45 conflict. People think of Burnley as simply a textile town, but we have an engineering background which transcends that of many areas which receive accolades that they perhaps hardly deserve.

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  During the period 1948–50, two Ministers came to Burnley because the trade unions were talking about diversifying their industry to a greater extent than before. They begged the trade unions and the work force to remain loyal to their industry and not to be tempted by the footloose industry which existed at that time and which they felt might suit them better. They begged the people of Burnley to remain loyal to the textile industry. To the credit of the trade unionists, they did precisely that. But what mention has there been of that today? And what was their reward? Burnley today has practically no textile industry at all.
  I shall cite an instance. About six months ago I drew the attention of Ministers to the fact that in the excellent shopping centre of St. James' Street, Burnley, there were two drapery shops next door to one another. One was a reputable firm selling suits and clothing of that kind. The shop next door sold what I described as flimsy imported cloth of one kind or another. Today, the reputable firm has its shutters up. It no longer exists. The firm next door, selling flimsy imported textiles, has prospered. I have lived in India. I know the poverty which exists there at first hand and I feel desperately unhappy about it. At the same time, can we really reconcile ourselves to the fact that highly-reputable British companies go to the wall while these people come here in a thoroughly mercenary fashion and prosper as never before? If that is the kind of justice that we want in this country, I must confess that I am a Dutchman.
  Mr. James A. Dunn: As a Member for Merseyside, I spoke earlier in the debate of the unfair penetration in the textile industry and asked the Government to take action to stop it. We are concerned about what happens in North-East Lancashire. Regrettably, time was not available for me to deal with the many issues that I know my hon. Friend wishes to bring to the attention of the House. I stress, however, that that was not for lack of concern but only for lack of time.
  Mr. Jones: I shall certainly communicate that to my constituents. They will be pleased to know it. The fact remains that the reputable British firm has gone bust. It has gone bankrupt while what I would call the mercenary spivs are prospering more than ever.
  I wish to make two further brief points. First, we appeal to the Government that the intermediate area status for Burnley be extended from three years to five years in view of the many difficulties that we face. I would welcome support from any part of the House in that plea. I should certainly welcome the support of the Minister who at one time gave such good support to the area. I hope that he will find it possible to do so again.
  Secondly, I am never satisfied that we get a square deal in North-East Lancashire, which I would describe as extending from Blackburn to Barnoldswick. Our people are hardworking and thoroughly dependable. In the 23 years that I have been there, I cannot remember when there was last a strike. If that is not a commendable record, what is?
  There is a gentleman in Manchester by the name of Mr. Sorenson. I am not quite sure what position he occupies except that it is a high executive post for the Government. I ask the Government to sort out Mr. Sorenson and to find out on a pro rata basis how much benefit has gone to Greater Manchester, Merseyside and indeed West
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  Manchester by comparison with the amount sent to North-East Lancashire. I am sure that, certainly for the 23 years that I have been privileged to be there, North-East Lancashire has been the economic and industrial Cinderella of the whole area. Nevertheless, I make no dogmatic statement. I simply call for the information.
  I therefore ask the Government, first, to extend the intermediate area status from three to five years, and, secondly, to provide the information that we anxiously seek, not in order to penalise other areas in any way but simply to obtain the justice to which I believe that North-East Lancashire is entitled. I therefore hope that an inquiry will take place and that the results will be published.
  7.9 pm
  Mr. Nicholas Winterton: I am very pleased to follow the hon. Member for Burnley (Mr. Jones), who has served in the House with distinction for 23 years. I have been here for only 10 years. In that time we have had a great deal of common ground between us, not least in that we both represent areas in the North-West, and have both championed the textile and clothing industries. As the hon. Gentleman knows, I visited his constituency not many weeks ago, where I saw one of the few mills that still exist in Burnley.
  I can only say to my Government, as I would say just as strongly to the Opposition spokesman, that the textile and clothing industries have answered every request to rationalise made by successive Governments since the war. They have installed the most sophisticated and up-to-date equipment and on every occasion they have had the full co-operation of the unions and the work force.
  I pay tribute to Jack Brown, general secretary of the Amalgamated Textile Workers Union. I pay a similar tribute to Alec Smith of the National Union of Tailors and Garment Workers. They have brought their work forces with them in all the rationalisation and reorganisation that the industry has had to face in order to compete in a very fierce world market.
  I do not wish to direct all my comments today to the textile industry, although it is only fair to say that it is perhaps the largest employer in the North-West, and certainly one of the largest employers in the United Kingdom, employing more people than the iron and steel and coal mining industries put together.
  The Government of which the Minister is a member—and of which I am a Back Bench supporter—have given over £5 billion to British Steel. If they had given in indirect assistance to the textile industry just one-fifth of that sum, 160,000 jobs that have been lost in the textile industry in the past two years would not have been lost. Ours is an efficient industry. It is an industry in which there is an unrivalled record of co-operation between work force, management and employer. It needs a tougher MFA than the one that was negotiated on the last occasion, and a more understanding Government.
  My hon. and learned Friend the Under-Secretary of State for Employment has always represented seats in the North-West. He has, fortunately, perhaps the lowest level of unemployment in his constituency of Clitherhoe. He will be aware that it is not just the Ministers that must be blamed. Some Departments are somewhat insensitive, whether it is the Department of Industry or the Department of Trade. The civil servants who are well cushioned in the Departments of State are unaware of the sacrifices made

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  by the manufacturing base of our country in recent years, and the textile industry is a very important part of that manufacturing base.
  I was delighted when the Under-Secretary of State for Industry dwelt so forcefully on the important part that smaller business can play in the regeneration of wealth and in the provision of jobs. I should like to refer to a survey that was carried out in America of Fortune 1,000—the top 1,000 companies in America—in the period 1969 to 1976. In that period, 9 million jobs were created in the United States of America. How many of those new jobs were created by the 1,000 big top companies in the United States of America? Was it 2 million? Was it 3 million? Was it 5 million? Was it 6 million? Let me tell the Minister that the big 1,000 companies did not provide one extra job. Six million of those 9 million jobs were provided by smaller business.
  The future of this country undoubtedly lies in smaller business. It is for that reason that I warmly welcome the steps that the Government have taken to date by way of loan guarantee and the business start-up scheme to encourage smaller business.
  I am sure that my hon. and learned Friend will not mind my saying that the steps taken so far do not go far enough. I want to see the Government give greater encouragement to smaller business. We cannot leave it to the ICIs of this world. Here I declare an interest, for ICI Pharmaceuticals is the biggest single employer in my constituency, with over 4,000 people. Perhaps it is because of the profitable pharmaceutical division that ICI has managed to maintain the work force that it has, although it has laid off more than 5,000 in the fibres division, its textile side.
  The pharmaceutical division is very profitable. I hope, therefore, that in any policies that may or may not be formulated from the Opposition Benches hon. Members will bear in mind the tremendous contribution that the private pharmaceutical companies make not only to employment, but to the economy and to the good health of the people of our nation.
  I come from the southern end of the North-West. As the hon. Member for Liverpool, Kirkdale (Mr. Dunn) pointed out, we do not perhaps suffer quite so much from unemployment as do the other areas in the North-West. Our unemployment figure is about 8·1 per cent., which means that over 2,000 people in Macclesfield are out of work. But I have to tell the Minister that that is double the figure that existed when the Government came to office in May 1979. It is because a number of smaller companies have folded that we have been hit by unemployment. The smaller company has not the collateral to provide as a guarantee to the banking system.
  I have expressed publicly my criticism of the banking system. It has not used the tremendous amount of money that is has made as a result of government policy to sustain the smaller businesses. As a result, many of them have gone out of existence, placing people out of work, and at the same time providing problems for the larger companies to which they were suppliers. As the hon. Member for Burnley implied in some of his comments, the larger companies have in many cases had to go abroad for their components or whatever commodity they were purchasing from the smaller companies here in the United Kingdom.
  But all is not bleak. I say emphatically that the Government's overall strategy is right, to curb inflation—which is the scourge of prosperity and the scourge of savings—and to reduce public expenditure as
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  a percentage of the gross national product. If I criticise my Government, it is because they have got the equation wrong. In cutting public expenditure they have cut capital expenditure rather than revenue/current expenditure.
  I urge my hon. and learned Friend and the Government to go ahead, for example—as has been leaked in some of the Sunday papers—with more electrification of British Rail and to give an early go-ahead to the Channel tunnel. As hon. Members will know, the Channel tunnel can be of tremendous benefit to industry in the North-West.
  Together with the West Midlands, and perhaps to an extent the East Midlands, the North-East and the Northern region, the North-West is the manufacturing heartland of the United Kingdom. This is where the wealth is created. The service industries in the South live to a great extent upon the manufacturing base which, in the main, is north of the Severn-Wash line.
  Mr. Dan Jones: Whatever plans the Government might evolve, they will fail if they do not produce one plan, and that is to train our youth as engineering apprentices.
  Mr. Winterton: I agree with the hon. Gentleman's comment. It is vital to get trained people into the manufacturing industries.
  Only on Friday I was privileged to present trophies and certificates to young people who had taken part in the "Young Enterprise" scheme. Perhaps it appeals mainly to those at the top end of the grammar schools and the sixth forms of the comprehensives and other schools. I pleaded with young people not to go into the Civil Service or into local government. They should go into industry and take a gamble. Manufacturing industry creates the wealth, which in turn provides all the services that local authorities and the Government seek to provide. I take the hon. Gentleman's point very much to heart.
  As I have said, all is not bleak. About two years ago a company called Le Coq Sportif was set up in my constituency. It markets leisure and sports wear. The parent company is French. However, Robby and Ann Brightwell are the directors and leading lights of the company. They are known in another guise as ex-Olympic athletes who performed superbly for this country and who won Olympic medals. They have started a small company that now employs about 50 people. They have reacted to the market and produce high quality goods which the young, in particular, wish to purchase. Although the parent company is French, the majority of the company's goods are made in my constituency or in the North-West. The company is keeping several textile mills in work by marketing something that the country requires.
  Adidas Umbro is also located in my constituency and has a factory in the constituency of my hon. Friend the Member for Cheadle (Mr. Normanton). Again, that company has reacted to the market and is producing goods that people want to buy. Sisis Equipment Ltd. is located in my constituency and is known for grass-cutting equipment and for equipment for the maintenance of sports fields. It is developing sophisticated and advanced equipment which is being exported throughout the world, despite the problems that industry faces. In addition, the company is profitable. I wish it success.
  A semi-Government body, the Machine Tool Industry Research Association, located in Macclesfield—as my hon. Friend knows, no industry has suffered more than that

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  industry—is trying to help that industry to develop new products. It is doing so because it knows that money is no longer available from the Government to fund such activities. That is another example of initiative.
  My hon. Friend the Under-Secretary of State was right to say that we needed initiative. Indeed, that reminds me of my days in the construction industry. As well as selling and hiring equipment that had been manufactured in Britain, we were, in a small way, agents for an American company. I attended a conference at the Rubens hotel, in Victoria. When I went into the conference room I found a sheet of paper and a pencil on the table. However, when I sat down I found a card on my seat. It had one simple message—"You've got to get off your arse to earn a buck". That is all that it said, yet its message remains relevant today.
  Britain must promote itself. The Government have a duty to help industry and to stand up for it. If only we, our embassies, consulates and all the other international bodies of government waved the Union Jack more strongly and forcefully, our industrial base would become stronger. Therefore, in anticipation of Thursday's debate I point out that we must have a stronger MFA. We must not allow the global ceilings to be breached. We must have a recession clause. I hope that that message will also go to the European Parliament. In the past, it has expressed itself forcefully on the subject of textiles and clothing.
  This is an important debate. I commend the speeches made by my hon. Friends the Members for North Fylde (Sir W. Clegg), for Chorley (Mr. Dover), and for Bebington and Ellesmere Port (Mr. Porter). They made valuable contributions. It was perhaps unfortunate that my hon. Friend the Member for Bebington and Ellesmere Port said that all those who had spoken had done so on behalf of their constituents. We are in the House to do just that. That is why I commend the speech made by the hon. Member for Burnley. He has been a Member of Parliament for 23 years because he has stood up for the people of Burnley. It is part of our responsibilities to do that.
  I shall stand up for my constituency, just as I have done by mentioning the names of several companies. Indeed, I shall mention one more. Seddon (United Kingdom) Ltd. makes shirts for one of the biggest retailers. The retail company also has operations on the Continent. The company is more efficient than companies in Hong Kong and many of the countries of the Far East because of its equipment and work practices. The only warning shot that I fire is that, while it is competitive, has the most modern machinery and a responsible and skilled work force, it cannot cater for unfair competition.
  That is why the Government have a duty not only as regards the MFA, but as regards unfair competition from, for example, Japan. Indeed, tonight's Adjournment debate will cover that. If the Japanese can keep out goods by non-tariff barriers, let us tell the Japanese that unless they take more of our goods, we shall stop their goods coming to Britain. Let us stand up for the interests of the United Kingdom. If we do, our people will be behind the Government. They understand our strategy, which is correct. Let us not, by the misuse of tactics, underestimate the sense of our people. They believe that we must conquer inflation and that we must stand on our feet and fight our way in this world if we are to survive and have a prosperous future.
  7.26 pm
  Mr. John Evans: I am grateful, Mr. Deputy Speaker, for this opportunity to participate in the debate, but I take no joy in the subject. There is no joy in the appalling problems of the North-West. The time for debate has been provided by the Opposition. I should like to think that the Government, who have created so many of the problems, will start to supply some of the time.
  I agree with the hon. Member for Macclesfield (Mr. Winterton), because we shall all highlight the problems that our constituents face as a result of the Government's policies. We shall also refer to the wider problems of the North-West. Again, I agree with the hon. Gentleman that the North-West was one of Britain's great producers. Unfortunately, in too many respects it is now an ailing giant that has been progressively brought to its knees by a mixture of incompetence, ideology and stupidity on the part of the Government.
  I trust that under no circumstances will Wednesday's Cabinet meeting seek to tighten the economic screw one more turn. If the Government do so, events in the North-West over the past two years will be as nothing compared with the next 12 months. Few firms in the North-West could stand any further tightening of the Government's monetary and fiscal policies.
  When I listened to the Minister's complacent excuses for failure and the way in which he blamed others, I became depressed. However, when he brought out his miserable list of tiny successes I thought the situation even worse. The Minister has clearly trawled the entire Government to pinpoint any successes in the North-West in the past two years, or anything that could be remotely called a success. At one stage, I wondered whether he was going to talk about a new window cleaning business that had been started by men using their redundancy money.
  I do not suggest that the Government are entirely to blame for all the problems that beset the North-West. I accept that the region has had problems for some time. There are structural problems in some industries, especially in shipbuilding, ship repairing, steel and textiles. However, those problems have been greatly exacerbated by the Government's actions over the past two years. I appreciate that this is not the sort of debate in which one should refer to high interest rates, Government-created inflation and the tremendous rise that took place in the value of sterling in the early part of the Government's life, which created enormous problems for industry. However, many of the problems are a direct result of the Government's policies.
  I shall not concentrate on regional problems or on the problems of the Newton division, which has one of the largest electorates in the North-West and contains four travel-to-work areas. I managed to deal with one of those areas in an Adjournment debate with my hon. Friend the Member for Leigh (Mr. Cunliffe), when we discussed Leigh, Golborne and Lowton. In the not-to-distant future we shall be discussing the problems of St. Helens.
  I shall concentrate tonight on the problems of the Warrington travel-to-work area in which 60,000 of my constituents reside. I have more constituents in the Warrington travel-to-work area than in the old Warrington borough. The people of Warrington will soon be in the unique position of being able to pass judgment on the Government's economic strategy over the past two years

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  and on the political credibility and the Common Market stance of the Liberal and Social Democratic Party bedfellows.
  In reply to a written question, I received an answer from the Under-Secretary of State for Employment on Monday 8 June. My question asked the Secretary of State for Employment for
  "the current level of unemployment in the Warrington travel-to-work area; and what were the figures for May 1980 and May 1979 respectively."
  The Minister replied:
  "The following table gives the numbers registered as unemployed in the Warrington travel-to-work area at the dates specified:

  May 1979 3,908

  May 1980 4,864

  May 1981 9,758*

  * (provisional)".—[Official Report, 8 June 1981; Vol. 6, c. 27.]

  Those figures reflect the enormous rise in unemployment in the area over the past two years, and especially in the past 12 months. I know that some Ministers will take some comfort from the fact that Warrington's dreadful figures are not as bad as some of the other figures that can be quoted in the North-West. Warrington's unemployment is about 12·3 per cent., which pales into insignificance compared with the figures in inner Liverpool. However, the Warrington figures are much more indicative of the major problems in the North-West.
  Warrington has always been a centre of employment for other areas. The terrible redundancies that it has seen over the past 12 months are not confined to Warrington alone. There is incredible diversity of industry in Warrington. In the North-West there are many one- or two-industry towns. We have heard, and we shall hear again, of the problem facing textiles and steel and some sectors of the shipbuilding and ship repairing. However, in Warrington there is almost every aspect of metal manufacture as well as of nuclear engineering, chemicals, steel, brewing, paper, wire making, vehicles, distribution, services and many other types of industry. The events of the past two years at Warrington, especially the past 12 months, show the devastating impact that the Government's ridiculous policies are having on the area.
  Every sector in Warrington has suffered hammer blows during the past two years. The true picture of the devastation that is taking place in Warrington, especially in the older Warrington area, is somewhat obscured by the successes that Warrington new town has had in attracting industry over the past four or five years. The industry that has been attracted by the new town is, generally speaking, in warehousing and services, while the sectors that have suffered the most severe blows are in the manufacturing sector.
  It is interesting to list some of the firms that have suffered over the past 12 months. I shall go back only 12 months because I became tired of running through the list. The list includes the Bewsey and Dallam rolling mill, one of the most efficient and modern rolling mills in the British Steel Corporation's empire, which was operating at a profit until it closed with the loss of 700 jobs last year.
  The Leesona Plastics Company at Burtonwood closed with the loss of over 200 jobs. Rylands and Whitecross, one of the major wire producers in Britain, declared between 600 and 700 redundancies. Rubery Owen, earth moving plant manufacturers, announced over 200 redundancies. Conveyancer Leyland, fork lift truck manufacturers, announced over 150 redundancies.
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  Thames Board Mills, paper and board manufacturers, declared over 200 redundancies. Another paper and board manufacturer, Thames Case, declared over 150 redundancies.
  Lockers, wire manufacturers, announced over 200 redundancies. Another wire manufacturers, Greenings, announced over 200 redundancies. Crossfields, chemical manufacturers, had over 150 redundancies. Simon Vicars, confectionery machinery manufacturers, declared about 100 redundancies. Ruston diesels declared 100 redundancies. Monks construction announced 200 redundancies. Firth (GKN) had over 200 redundancies and British Aluminium had over 200. The brewers, Tetley Walkers, had 60 redundancies. McCorquodales, printers, declared 200 redundancies. That is a sample because the complete list is much longer. Many other firms have declared smaller redundancies and many small firms have closed during the past two years.
  Many people who live in Warrington have told me that they escaped most of the bad times during the depression of the 1930s. Many of those in their sixties and seventies have told me that this is the worst recession ever to strike the Warrington area, which was one of the most prosperous areas in the North-West and, indeed, throughout the country.
  Another element of the Warrington problem is youth unemployment. The problems for youth are as bad as those of any other area in Britain. The Guardian of Warrington referred on 12 June to a job search survey which highlighted trouble spots. The article states:
  "A new survey aimed at extracting jobs for Warrington's young unemployed from industries on the town's growing estates"—
  that is, the new town element—
  "has highlighted just how difficult this 'needle-in-the-haystack' search has become. The result of an intensive probe of key industrial estates, the search involved more than 300 firms but yielded only two permanent vacancies."
  Warrington has trained some of the most highly skilled men and women in the country. It can now produce only two permanent vacancies in a survey of over 300 firms.
  The youngsters are frightened and angry, and there is growing anger and fear among the parents of Warrington's youngsters, who thought that their children would follow them into Warrington's industry to learn the skills that they themselves once possessed. In fact, there is nothing for their youngsters. The election campaign that the Tories fought two years ago referred to the level of unemployment. After two years of Tory rule, we find that the parents are on the dole and youngsters are on the scrapheap. That is what is happening in the North-West.
  Despite our pleas to the Government over the past two years to assist in the problems of the region, they have removed areas such as Warrington from assisted area status. When desperately-needed investment was required the area received a kick in the teeth instead. The Government removed assisted area status from no fewer than 21 travel-to-work areas in the North-West. The working population covered by assisted area status dropped from 7·1 per cent. to 6·6 per cent. of the working population. So the Government's response to our pleas for assistance for the North-West has been to remove vast areas of our region from assisted area status.
  Warrington has been trying desperately to bring its housing stock up to date. This year the Government have slashed the housing investment programme from £6.3 million to £3·7 million, so there will be little, if any, local

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  authority house building in this financial year and the improvement programme will be badly affected. Deterioration of existing housing stock will continue apace.
  Those are a few of the issues that will figure in the Warrington by-election. The electors will be passing judgment on the atrocious performance of the Government. God help the Tory candidate, whoever he is; he will undoubtedly be humiliated and, I suspect, will be in danger of losing his deposit. The electors of Warrington will be passing judgment on the Social Democrats who will be entering the fray at that election.
  I suspect that the people of Warrington, who have shown sound common sense over the years by returning Labour Members of Parliament, Labour county councillors and Labour borough councillors, will not be influenced by the siren voices of the Social Democrats. They will recognise that the Social Democrat candidate is using the by-election as a peg on which to hang his parliamentary ambitions. The Warrington people will not be persuaded that the Common Market—we recall the promises made to us in the Common Market debates—will be the salvation of the country in general and the North-West and Warrington in particular. We have seen the disaster created for our area.
  In conclusion, I refer to the cynical arrangement that exists between the Liberals and the Social Democrats in Warrington. An equally cynical approach has been taken by the Liberals in Cheshire, after the Tory candidates were decimated in the council elections and Labour came within one seat of taking power in Cheshire for the first time in the history of that great county. It was found that the Liberals had entered into an agreement with the Tory party to get themselves a handful of chairmanships and deputy chairmanships.
  Mr. Nicholas Winterton: I must make it clear that I advised my group on the county council to seek an arrangement with the Liberals and the Independent, but I assure the hon. Gentleman that no formal arrangement was reached between the Liberal Party and the Conservative Party at county level.
  Mr. Evans: I am grateful for that assurance. I can only record the fact that the Tory nomination for the chairman of the county council was carried by Tory and Liberal votes and that five Liberal nominations for chairmen and vice chairmen were carried by Tory and Liberal votes.
  Mr. Alton: Will the hon. Member give way?
  Mr. Evans: It may not have been an agreement. The hon. Member for Macclesfield (Mr. Winterton) is a Conservative Member for Cheshire, as I am. The hon. Member for Liverpool, Edge Hill (Mr. Alton) is just another Liberal. I am seeking to prove that the Liberals are prepared to enter into an alliance with anyone if they think that there will be something in it for them. In the by-election the people of Warrington will pass judgment on the Tories and their monstrous economic policy and on the Liberals and Social Democrats in their cynical alliance. I suspect that at the end of the day the Labour candidate will be returned with a larger majority than he had at the last general election.
  7.45 pm
  Mr. David Alton: I am grateful for the opportunity of following the speech by the hon. Member for Newton (Mr. Evans), especially in view of his malicious comments about the Liberal Party. Perhaps "malicious" is too strong a word, and I should substitute "interesting". He may take that as he wishes.
  Over the years, the Liberal Party has tried, in the House and in local government, to show that by putting the interests of the people before the narrow partisan interests of politicians and political interest groups it has proved that it means what it says when it talks about the need for political partnership and co-operation. The people of the country—and, I suspect, the people of Warrington—are looking for politicians who are prepared to put the interests of constituents before those of party. Throughout the debate the slanging match that has gone on is the sort of thing that makes people bitter and cynical about politicians of all persuasions. Instead of saying who did what, when, it would be better to examine how the problems have been caused and what can be done about them.
  I remind the hon. Gentleman, who has criticised the principles of partnership and co-operation, that for a year and a half the Liberals, in alliance with the Labour Party, had a good record in trying to maintain inflation levels, and reduced them to single figures—lower than inflation is today—and managed to bring about a reduction in the rate of increase in unemployment.
  Unemployment is not the invention of the Conservative Government. There were 1½ million people out of work when the Government came to power. It has increased since then, but it is wrong constantly to go on about who created the most unemployment. It would be better, as the hon. Member for Liverpool, Walton (Mr. Heffer) said, to consider the work ethic, image and attitude. In considering the image in the North-West, and Liverpool especially, some of the problems must be laid at our door, and especially at the door of those who preach militancy and aggression as a way of solving problems.
  We are sometimes in danger of striking ourselves out of existence by appearing never to care about attracting industry, enterprise or business into our region. There are those political hotheads who are endangering the future of the hon. Member for Liverpool, Kirkdale (Mr. Dunn) and his colleague the hon. Member for Liverpool, West Derby (Mr. Ogden) and there are those who would much rather put narrow political interests before those of the people whom they represent. Therefore, image is an important commodity in the way in which one deals with the problems of an area. That is why in Liverpool we must reflect on the aggressive way in which we have gone about industrial relations in the past.
  Many of the redundancies that have been brought about have been the fault not of Labour or Conservative Governments but of workers and others involved in industry. To have intransigent management and intransigent trade unions is no way to go about things.
  Partnership and co-operation of the kind that Liberals have long advocated and partnership among politicians are the sort of things that will improve the lot of the people. The hon. Member for Bebington and Ellesmere Port (Mr. Porter) earlier spoke about the problems in his constituency and on Merseyside. He would agree that there have been times when the people on Merseyside could be forgiven for feeling that the Government, and

  787
  especially the right hon. Lady the Prime Minister, lacked compassion in looking at problems of central Liverpool, where, as the hon. Member for Liverpool, Scotland Exchange, (Mr. Parry) said, unemployment is running at over 2 to 1—two people out of work for every one employed. The same is nearly true in my constituency. It is a depressing picture. But it was depressing enough in 1979.
  It would be helpful if the Prime Minister and other Ministers spent some time in Merseyside talking to local politicians and hon. Members and trying to show some concern, instead of creating the impression—whether it is a perception or the truth is almost irrelevant—that, apart from an enterprise zone or an urban development corporation here or there, the Government do not care about the problems. That feeling is certainly abroad on Merseyside.
  The Government should be trying to tackle the massive unemployment level on Merseyside. That relates particularly to bad housing, which is another chronic problem. The North-West probably has more houses without inside sanitation, running hot water or bathrooms than any other area in the country. Yet there are more than 300,000 building workers on the dole. Instead of paying unemployment and social security benefits to those men and not receiving the tax that they would otherwise be paying—the total cost to the Exchequer is about £6,000 per person per annum—it would be sensible to use their skills, talents and energies on useful and productive projects, such as improving the homes and quality of life of those in the North-West.
  Mr. Allan Roberts: And building council houses.
  Mr. Alton: Indeed. We are building fewer council houses this year than at any time since 1924, and that is a matter of great regret. I should like to see us building more sheltered accommodation for the elderly, because there are ageing populations in many parts of the North-West who need security, and we should provide sheltered accommodation for them so that they do not have to be put into geriatric institutions. If they were provided with sheltered accommodation the family houses in which they are living could be freed for families in need.
  It is not merely a question of building more houses and flats that will remain empty. There are 4,000 empty council properties in Liverpool, but they are mainly properties that people do not want to live in. We should be more
  selective in our expenditure of public money.
  I am glad that the hon. Member for Walton has entered the Chamber. He said that he wished that the Liverpool city council was not proceeding with its build-for-sale programme. That is the sort of doctrinaire and dogmatic attitude that I attacked earlier. In partnership with the local authority, building firms such as Wimpey and Barratt are investing money in the North-West and have built, or are building, up to 3,000 houses for sale in Liverpool. Many council tenants are buying those homes, vacating council houses and making way for people on the waiting list. That also keeps people at work in the construction industry.
  Local councils can do little about reductions in the rate support grant or in capital spending programmes. Those are matters for the Department of the Environment, but when there is derelict land in the middle of a city it is lunacy to turn away private investment and prevent people from having the opportunity to buy their own homes. I am
  788
  sure that the hon. Member for Walton will agree, on reflection, that it is the sort of dogmatic and doctrinaire attitude that gives politicians a bad name. I am prepared to give way to the hon. Member, even though he was not courteous enough to give way to me.
  Mr. Heffer: There is a great difference. The hon. Gentleman was not here for the major speeches and he had only just walked in when he tried to intervene in my speech.
  I have never been opposed to private enterprise building houses for sale, but until we have got rid of the waiting lists of people living in overcrowded conditions, slum properties, and so on, the job of the local council should be to provide houses for rent. I do not oppose encouraging private enterprise to build for sale, but I would support local authorities building for sale only when we have got rid of the queues of people who desperately need decent homes.
  Mr. Alton: I was here for the opening speeches. I told the Chair that I had to go to a meeting with the Secretary of State for Education and Science to discuss schools' reorganisation in Liverpool. That took an hour, and I was not able to be here for the beginning of the speech of the hon. Member for Walton. When I returned he would not give way to me.
  The hon. Gentleman says that he does not want to proceed with the building of houses for sale until we have got everybody off the waiting list. There are 16,000 people on the Liverpool waiting list, and some will be able to move into properties vacated by those who buy houses for sale. Of the 3,000 houses built for sale, or in the pipeline, in Liverpool about half have gone to people on the waiting list or in council houses. By saying that we should do nothing, which is what would happen if we got no money from the Government through the rate support grant, the hon. Member for Walton is behaving in an ostrich-like way, for doctrinaire and dogmatic reasons.
  Furthermore, the Walton triangle, in the hon. Gentleman's constituency, is one of the most successful build-for-sale projects in Liverpool. Many people, including council tenants, have been happily rehoused there and have taken the opportunity to have a stake in their own homes. The land has stood derelict for donkeys' years under successive Governments and the council turned it into a good residential area. The houses are bringing in rates for the local authority, which help its efforts to do something about the disgraceful state of the city's finances.
  I am concerned about the sort of image that we should try to create in Liverpool. I want our image to be one of balance, partnership and mix. I agree that there should be houses for sale and for rent alongside each other, but I do not want to see the stigma of public authority housing going on for ever. I was brought up in a council flat, so I know what it is like to live in council accommodation, and I represent many tenants of council tenements and high-rise blocks of flats. But I do not want that for them for ever; I want them to have the opportunity to live in decent homes. That is what matters. The hon. Member for Walton seems to want to create a one-party State, with everyone living in stereotyped homes and doing stereotyped jobs. We want quality, balance and partnership.
  We must also do something about the appalling levels of crime in the North-West. It is amazing that we in

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  Liverpool continue to tolerate the fact that there is one crime in the city every four minutes while, like other places, Liverpool has been taking policemen off the beat and closing local police stations, which are needed to keep communities safely protected.
  People are often living in fear. Many elderly people have been mugged or have had their homes burgled. We concentrate on the perpetrators of crime, but say little about the victims of violent crime of whom there are many in the North-West living in unsafe conditions. That is why I spoke earlier about the need for more sheltered accommodation.
  We must also consider how we police our communities and particularly the need for more policemen on the beat and the need to reopen local police stations. I am sure that the hon. Member for Walton agrees that instead of spending thousands of pounds on new rosewood desks for the chief constable it would be more sensible to use that money to pay our policemen more, to take on more policemen or to reopen local police stations.
  The use of resources must also be considered. If we do not make our region an attractive place to live in, people will not move businesses there and they will not want to live there. If rates continue to soar in every part of the North-West and there are not the right incentives to live there, people will move away, as they have done over the past two decades.
  There are many under-used resources in Liverpool and many ways in which we could save money. The rationalisation of school buildings is one example. I met the Secretary of State for Education earlier to discuss that topic. Schools built for 2,000 pupils have only 300 or 400 children in them, and there are other under-populated schools nearby. It would be much more sensible to centralise the resources and to concentrate on providing decent schools to serve those neighbourhoods.
  Unless that is done, people will not move into those neighbourhoods. One of our great problems in the North-West is that people move away from the region because they do not think that they can get a decent home or a decent job, or have their children decently educated. They do not believe that there is security in the communities where they live.
  We should examine how we govern ourselves and run our affairs. This is one of the few debates since I came to the House in 1979 that has been devoted to the problems of the North-West. Many hon. Members have made a case on behalf of their constituencies and their regions. This demonstrates the need for more regional government. It shows how lopsided is our system of government, when Wales and Scotland can have their own Grand Committees and when hon. Members can take up the time of the House at Question Time putting questions to the Secretary of State about affairs in their countries while we are denied those opportunities in dealing with the problems of the North-West.
  I believe that county councils, which have been a terrible waste of money, should be abolished. Many of their powers should be transferred to district councils. A new level of government should be established within a North-West Assembly, which would bring together the powers of Norwida and Mercedo. We should also examine organisations such as the North-West water authority, which are often undemocratic and unaccountable, and
  790
  which should also be brought within a regional assembly. There should be a Minister for Merseyside, a Minister for Manchester and a Minister for the rest of Lancashire, who would answer questions from hon. Members concerned about the problem of their areas. If there were someone of Cabinet rank accountable to the people of Merseyside, instead of a spread of Ministers, we might get somewhere.
  Mr. Dan Jones: Does the hon. Gentleman realise that that state of affairs has existed in the past, while I have been an hon. Member, although not since he entered the House? I do not know why it has been discontinued.
  Mr. Alton: I am grateful to the hon. Member for Burnley (Mr. Jones). I agree with him. I do not know why that power was given away. The wisdom of the hon. Gentleman's 23 years' service in the House is a factor that should be considered. There is a need for someone who is accountable to Members of the House for the problems of the area.
  Instead of allowing the problem to be dealt with by urban development corporations, enterprise zones and partnership committees, which can conflict, an attempt should be made to pull these matters together and to obtain a more coherent approach to tackling problems. Otherwise, people will say legitimately that we are becoming two nations—North and South. They see that everything goes into the pockets of people living in the South of England while little or nothing is done for the people of the North. If that is how they perceive matters, it will prove a psychological problem that will be hard to overcome.
  8.2 pm
  Mr. Mark Lennox-Boyd: I hope that the hon. Member for Liverpool, Edge Hill (Mr. Alton) will forgive me if I do not pursue his remarks. I make only one general observation on what has become apparent from the contributions of hon. Members. It seems easy to use these occasions to highlight the problems of a particular area, but the solutions to those problems are often different on different occasions.
  I recall that last year when the textile industry and the problems of the North-West were debated Opposition Members emphasised that interest rates were too high and the pound too strong. We have not heard many of those complaints today, perhaps for obvious reasons. The pound has declined in value, while interest rates in some countries for example France and the United States, are higher than they are here. Some of the solutions offered by Opposition Members seem susceptible to fashion. What is fashionable at the moment is increased Government expenditure, with all the ramifications that are so familiar.
  Hon. Members have advocated regional assistance. My constituency straddles the North-West and the Northern area. Part of it is situated in Cumbria and part in Lancashire. When Opposition Members argue for a Northern Development Agency I am always conscious of the problems that would be created for my constituents in North-West Lancashire. All the arguments for the creation of special areas of assistance lead to problems on the periphery and to demands from people outside that the areas of special assistance should be extended. It is easy to state the problems, but difficult to find solutions. Many scapegoats are often found along the way.
  In discussing the problems of the North-West, we are discussing the nation's problems. We are all dependent

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  upon the state of the national economy. I was impressed by the observations of my hon. Friend the Member for Bebington and Ellesmere Port (Mr. Porter), who described the rake's progress from which our economy has suffered over the period since the war. All hon. Members must admit that those of our citizens who are in work and who have been in work over recent years have enjoyed a life of comparative ease. I am happy to exempt the textile industry from the stricture, but it must be admitted that throughout the whole of our industrial scene we do not work as hard as we could. We do not work as hard as do our competitors in other countries.
  To a larger extent than politicians admit, the solution to these problems does not lie wholly within the hands of politicians. When politicians finally face the facts they will be doing the most honest and helpful thing for their constituents. Until we manage to admit the reality of the situation, we shall continue to be tempted to inject money into our economy in a forlorn hope and attempt to mask the reality of our inefficiency.
  I wish to make a few observations about my constituency. The North-West cannot lead the country in its economic revival. It will follow such a revival. I feel however, that the Lancaster area is likely to be part of the North-West that will lead the recovery in that part of the United Kingdom. I agree with hon. Members who have spoken of the negative attitude exemplified by the debate. I am not saying that we should be hopelessly optimistic. It is fair to point out the special problems from which the North-West suffers. If we are to move from decline to expansion, we must address our minds to areas of optimism that will attract industry.
  I am happy to report that a prominent local citizen has indicated that there are signs in Lancaster that the tide is turning. That observation was made by a local Labour politician, who happens to be the mayor of Lancaster. That honour is granted to the Labour Party on many occasions. Whenever an advance factory becomes available in the Lancaster or Morecambe area it is booked before a stone is laid.
  While our unemployment is higher than last year and peaked at 11·6 per cent., it has now fallen to near the national average. The unemployment rate for the period between January and May this year fell by 339, compared with a fall of 122 in the same period the previous year. We usually experience a fall at this time of year, because our economy is based to some extent on the tourist industry, but the decline in the level of unemployment in the first three months of the this year was double that in the first quarter of last year. I read into that nothing more than the most cautious optimism, but the fact should be mentioned; it is significant as far as it goes.
  A business competition offering prize money of £10,000 is being launched in Lancaster this year in co-operation with the local chamber of commerce. Called "Make Lancaster Your Business", it is for the best idea for the launch of a new business. There have already been more than 100 entries. I strongly believe that the 99 that fail to win the prize money will be able, as a result of the publicity that they obtain, to find finance under the business start-up scheme introduced in the last Budget. There is no doubt that no action by any Government will be as good for the citizens of our area as action by the people of the area themselves.
  8.11 pm
  Mr. Allan Roberts: My constituency is in Merseyside, but I feel qualified to speak in a debate on the problems of the whole of the North-West as I was born in Droylsden in Tameside, worked as a social worker and teacher for the Lancashire county council, was a principal officer in the social services department in the city of Salford and served for eight years as a member of the Manchester city council. However, even after that wide experience of the problems of the North-West, those problems of industrial decline and unemployment were brought home to me dramatically when I was translated to Merseyside, which is, as has been said, the graveyard of capitalism. Therefore, I want to say some things about the North-West generally, but I want to concentrate on the problems of my constituency and Merseyside.
  First, I should like to intervene in the dispute between my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and the hon. Member for Liverpool, Edge Hill (Mr. Alton). I do not believe that the phenomenon of Liberals and Conservatives refusing to meet the housing needs of people and playing about with peripheral palliatives, such as building for sale, is simply a Liverpool phenomenon. It happens in my constituency, in the metropolitan district of Sefton.
  I am sure that my hon. Friend is not against owner-occupation and is not against firms such as Wimpey and Barratt building for sale, even if they build on land that is subsidised and provided by the Liverpool council. What he is against is what I also am against—that being done to the exclusion of building for rent to meet the housing needs of those who cannot afford to buy. It is not just the present Government who have forced the Liverpool city council into doing that. When the money was available to build council houses, the Liberals in Liverpool combined with the Conservatives to vote against Labour's proposals to build low-rise council houses with gardens.
  I should now like to look at the problems of the North-West region generally. One would imagine from the speeches of most Conservative Members that all was for the best in the best of all possible worlds, that the recession was bottoming out and that the real problem was caused by Labour Members highlighting the difficulties of Merseyside and the rest of the North-West. It was suggested that if we concentrated on the successes we should have a truer picture.
  I have here a document produced by the North West Industrial Development Association, hardly a Socialist organisation. The document, called "Unemployment and Investment in North-West England—Cause for Concern" says:
  "the flow of resources into North West England, whether from private or public sources, is not on a scale sufficient to overcome the economic and environmental problems of the region … many of the problems encountered in this region—high unemployment, low investment, poor industrial growth, underground and surface dereliction—"
  the worst of any area in the country. All of those problems and the problems of Merseyside were to be solved by cuts in taxation and a release of the entrepreneur from the shackles of taxation promised in the Government's first Budget. None of that has come true. Apart from not having the public expenditure that we need in areas such as Merseyside, we are not having the private investment.
  Mr. Alton: I agree with much of what the hon. Gentleman has just said. However, there is more public

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  expenditure than in 1979. What the hon. Gentleman should say—and I am sure that he intends to say it—is that we are spending much more now on keeping people out of work by paying them unemployment and social security benefits. Not only are we causing a transfer in the way in which we use our public expenditure, but we are building up social problems, especially among young people and ethnic minority groups.
  Mr. Roberts: There is no doubt that the hon. Gentleman is right, as was the hon. Member for Macclesfield (Mr. Winterton). The Government are switching public expenditure from investment in capital and wealth-producing industry to revenue expenditure in keeping people unemployed. There have been massive increases in the amount of public expenditure on wasteful things of that kind. That is why the Government lost control of the public sector borrowing requirement.
  The document speaks of fixed capital formation per capita by industry as being lower in the North-West than in any other region but adds that:
  "Government capital formation per capita in the North-West has deteriorated steadily relative to other United Kingdom regions."
  That is the general picture as seen by an independent body. The hon. Member for Bebington and Ellesmere Port (Mr. Porter) and other Conservative Members told me that one of the problems was high rates. They told me that there was too much public expenditure, too much taxation, too high rates, and that this created unemployment and a decline in industry. Bootle is in Sefton, one of the lowest-rated metropolitan districts in the country, if not the lowest. It had one of the lowest rate increases ever during the current financial year. An answer by the Under-Secretary of State for the Environment showed a 10·2 per cent. increase, the second lowest, next to that of Calderdale. Despite very low rates and very low rate increases, the decline in job prospects and job opportunities in Sefton, and Bootle in particular, is dramatic.
  Mr. Straw: Does my hon. Friend agree that, despite repeated requests to the Secretary of State for the Environment, the Government have been unable to provide any systematic evidence that there is a link between rate increases and job losses? Indeed, the analysis prepared for me by the Library suggests that there is no relationship.
  Does my hon. Friend also agree that the report by Coopers and Lybrand on non-domestic rates for the Shell Small Business Unit shows that rates are a low industrial cost? They have consistently formed less than 1 per cent. of industry's costs and have not risen faster than other costs, whereas high interest charges, a burden imposed by the present Government, have doubled in the past two years.
  Mr. Roberts: I am sure that my hon. Friend is right. He has recently produced some research on the subject, and I am sure that it is authoritative. The papers that he produces on his own are nearly as good as the ones that we produce together when we co-operate.
  I was drawing a contrast, which illustrates my hon. Friend's point, between the low rates which have persisted for a considerable time in the metropolitan district of Sefton and in Bootle and the appalling unemployment in
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  my constituency. Unemployment continues to rise on North Merseyside. The number of jobless increased in May last year by 4 per cent. Just under 20,000 people are registered as unemployed at the area's three jobcentres.
  There are 19,673 unemployed at the Bootle, Crosby and Walton jobcentres—14,724 men and 4,949 women. That shows an increase in unemployment of one-third during the past year. Bootle shows the largest percentage increase, with unemployment up 40 per cent. on the year, despite low rates, cuts in services and the council willing to wield the axe with an enthusiasm that the Secretary of State himself would display. There are now 7,258 unemployed in Bootle—5,439 men and 1,819 women. Vacancies notified to the jobcentres continue to fall, and are down by 4·7 per cent. in a month—that is last May's figure—and 43 per cent. during the past 12 months. Those are the problems that are faced in Bootle and Merseyside generally.
  One of the problems is that there is not enough public expenditure. One of the major agencies for public expenditure in Merseyside is the county council. That council, the new Merseyside Labour-controlled county council, is facing great problems, and those problems are of the Government's making and of the making of the Conservative council which was defeated in the May election.
  Let us consider transport and the general picture in Merseyside. The Secretary of State for the Environment had an expenditure target for the Merseyside county council to meet. Before May, the Conservative-controlled council made a budget. Now that Labour has taken over, we find that another £19 million needs to be cut from the Tory council's budget to meet the Secretary of State's target. If the Labour-controlled council does not cut the Tory council's budget by that £19 million, it is liable to be fined £4·5 million as a result of the Secretary of State's recent circular. That is not a fine against the Labour council that was elected last May; it is a fine against the people in Merseyside.
  Before May, the county council budgeted for reductions without saying where they were to come from. For transport alone, a wages problem was inherited by the new council. The Conservative-controlled council made an offer of 8·5 per cent. to the unions involved in the passenger transport authority on Merseyside, but, following an instruction, either from Conservative Central Office or from Marsham Street, that offer was withdrawn, and an offer of 6 per cent. was substituted, which obviously was rejected. A fresh offer is being made today by the Labour-controlled council and the bill for that fresh offer—a fair and just offer—will have to be picked up by the county council. It was not budgeted for by the outgoing Tory-controlled council.
  There were planned cuts in services by the Tory-controlled county council—early morning buses, evening buses, Sunday buses, and train services. Fares were to be increased by 15 per cent., despite the fact that the previous fare increase in 1980 resulted in an unexpected decline in the number of passengers to the tune of £1 million, which even that Tory council had not expected. Now the Labour council is rightly restoring the services. It is not increasing the fares by 15 per cent. Rather, it is cutting fares by 10 per cent. to provide much-needed relief for those who depend on public transport, and to attract people back to

  795
  the buses. In fulfilling those election promises, the council is likely to be victimised by the Secretary of State for the Environment.
  Mr. Alton: Will the hon. Gentleman explain one aspect of the cuts in bus services? If there is to be a real cut in bus fares in that part of the country, will people actually pay 10 per cent. less than they are paying at present?
  Mr. Roberts: That is exactly what is proposed. That undertaking was given in the election, and it is being fulfilled. The Labour council intends to cancel the inner ring road. We want the 75 per cent. grant from the Government for that purpose to be given to the county council for other urgent purposes, including the proposals now being put forward for public transport.
  I want to give the lie to what the Minister said in his opening speech, that the justification for getting rid of assisted area status for the rest of the North-West was so that resources could be concentrated in Merseyside. Perhaps that would be justified if more resources were coming to Merseyside in the form of grants in industry, and more investment were coming to Merseyside. But that is not happening. In fact, the Government have made it more difficult to obtain grants in a special development area such as Merseyside. Procedures have been altered so that factories and firms that are expanding do not receive grants.
  The only companies that receive grants are those that are setting up for the first time in Merseyside, and there are very few of them. We are very anxious—for the benefit of Merseyside as a whole, but particularly for the docks—that the 22 per cent. grants for manufacturing industries in special development areas should be given to service industries. The docks are a service industry, and the hinterland of Merseyside has service industries which depend on the docks. That is one specific course of action that we hope will be taken.
  Finally, at the weekend the Financial Secretary to the Treasury said that one cannot fight unemployment, as the Labour movement wants, by fine words and marches. He should be grateful that we have a democratic Labour movement and that we use fine words and marches, because, without a democratic Labour movement, people would express their anger in more difficult and violent ways than fine words and marches. Yet that same Minister then said that we do not really have a problem. He found a new way of expressing the unemployment problem. He said that we do not have 10 per cent. unemployed, we have 90 per cent. employed. He was proud of that figure. That is an insult to the unemployed people in Merseyside who, as was said earlier, number one in two.
  8.27 pm
  Mr. D. A. Trippier: When Her Majesty's Opposition take up time on a Supply Day to point to the problems of the North-West, they are under a moral obligation to put forward a constructive alternative to the Government's policies. That they have so far failed to do. Conservative Members appreciate that the Labour Party—the official Labour Party—is in great difficulty. That is true in the North-West as it is throughout the country, but, far from trying to resolve their differences, they appear hell-bent on committing hara-kiri.
  Mr. Straw: rose—
  Mr. Trippier: I gave way to the hon. Member for Blackburn (Mr. Straw) in the last debate. He has popped in briefly just to make his intervention, without making a formal contribution. Perhaps he will be fortunate in catching your eye later, Mr. Deputy Speaker.
  Perhaps the Conservative Party should be delighted that the Labour Party is in such disarray, but I believe that it is important to have a constructive Opposition. Do the Opposition seriously believe in their alternative strategy, as outlined by the Labour Party Conference last year—the hon. Member for Liverpool, Kirkdale (Mr. Dunn) referred to conferences; we did not raise the matter—which contained three main planks? The first was withdrawal from the Common Market, when the vast majority of firms in the North-West know that their major trading market is West Germany. Is that a serious consideration? The second was the abolition of the House of Lords. Is that the sole topic of conversation in the North-West? The third was unilateral disarmament, which the Labour Party was happy to discuss and vote for at its conference. We shall wait with great interest to see whether it is prepared to include that suggestion in its manifesto for the next general election. I have my doubts.
  The Opposition are trying to kid people in the North-West that if they vote for unilateral disarmament they will save an enormous amount of money. Statistically it can be proved that Trident—an independent nuclear deterrent—costs 2p per day per head of population. The Opposition are trying to kid the public. They cannot be taken seriously. Their alternative strategy does not stand up to close examination. It is so easy for Opposition Members to talk about the way that they would spend money, without a single thought about its source. It is all too easy.
  My hon. Friend the Minister, in an excellent speech, emphasised the need to encourage small businesses, especially new businesses. That is the key to the future success and the increased prosperity of the North-West. Such firms will employ people and create wealth. The hon. Member for Newton (Mr. Evans) joked about the setting up of window cleaning businesses. I cannot find a window cleaner. I have been without one for nine months. I hope that the Minister will take that point on board. I do not want to see headlines in The Times tomorrow saying "Shortage of Window Cleaners in the North-West". The Opposition must realise that many people who want work done both in their firms and their homes cannot find skilled tradesmen becausethere are shortages in those areas.
  No one who has spoken in the debate would argue that the North-West has not been too dependent for too long on traditional industries. Many hon. Members on both sides of the House have fought long and hard for the textile, footwear, paper and other traditional industries. We shall continue to do so. None the less, we acknowledge that too much reliance has been placed on those industries, which has made us vulnerable in times of world recession, such as we now face. The Government are right to encourage new firms starting up in business.
  It is even more important that firms diversify so that Britain becomes less vulnerable. We have relied too much on the traditional industries in the North-West, and my constituency is a classic example. How are we to diversify in the Rossendale Valley? The trade associations, the council and the trade unions—all responsible bodies—ask us to diversify out of the traditional industries of textiles and footwear.

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  I wish to commend a scheme that I recently launched in my constituency called the Rossendale trust. I cannot claim credit for the idea because it is modelled on the successful St. Helens trust. I am glad to see my right hon. Friend the Member for St. Helens (Mr. Spriggs) is in his place. That trust has achieved such success that it has been responsible for the creation of 750 jobs, with another 7,500 in the pipeline. That is an important achievement.
  I am not saying that we intend slavishly to follow the example set by the St. Helens trust, but its establishment shows that the idea can work. If it can work in St. Helens, it can certainly work in Rossendale. We have an advantage over St. Helens because we have better road communications with the M66 going to the heart of the constituency. Rossendale's infrastructure is also ready. The trust will be a district effort, aimed at combating unemployment in the long term. The means to do that is to marshal the resources of the community to create an environment favourable to the growth of business enterprise, especially new small businesses. In short, it is an exercise in pulling ourselves up by our bootstraps. To achieve those objectives the major influences in the area will work together in the trust.
  The governors of the trust include representatives from the local council, industry and the banks. Essentially, they are non-political. All provide support for the trust's activities. The trust has no resources of its own, with the exception of a limited fund for provision of seed capital. Essentially, the trust relies on the resources of its constituent supporters for effective action.
  The trust cannot claim to create business enterprises directly. It acts to support entrepreneurs who can do so, principally in two ways. The first is consultancy. The resources of industrial supporters enable a high quality of consultancy to be provided at professional level. Solicitors and accountants have offered their services. In addition, we have a promise from the National Westminister Bank of a secondment as deputy director of the trust, who will provide direct financial advice to small firms.
  Does any hon. Member know how to start a small business from scatch? It is not that easy. A recent check list by the Department of Industry gave 21 things that had to be done when companies started up. It is important that the entrepreneurs, the people with the ideas, should be pushed in the right direction and helped.
  However, none of these businesses will start up unless there are premises for them. The infrastructure must be right and the council must do all it can to establish the correct infrastructure. I pay tribute to the Rossendale local authority. It has done a tremendous amount in ensuring that the infrastructure is right. We have the great advantage of the motorway, as I have mentioned. We also have in process of completion four industrial estates, all of which will have small workshop units. The important thing is to ensure that they are filled.
  The trust will bridge the gap between the entrepreneur and the Department of Industry. The Department has to admit that it has not the resources, the manpower or the man hours to be able to advise such people how to start up a business, or to follow them through until they are established.
  In other words, the role of the director of the Rossendale trust is crucial, and the success or failure of the trust will depend largely on the success or failure of its director. It will be his job to ensure that the entrepreneur
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  who comes to the trust is offered facilities for starting up his business, to direct contact with the legal experts and accountants, to deal with registration of the business name, and so on—all the things that are so important.
  I hope that this example of self-help will be emulated in other parts of the North-West. As its main aim is employment, it deserves the support and encouragement of the Opposition as well as the Government. For that reason, I commend it to the House.
  8.38 pm
  Mr. Leslie Spriggs: I did not intend to follow up the remarks of the hon. Member for Rossendale (Mr. Trippier), but I shall deal with the St. Helens Community Trust, to which he referred. St. Helens borough council has been working hard in co-operation with local industrialists. It has received great co-operation from about 50 of them.
  St. Helens is in a difficult period as a result of the Secretary of State for Industry's downgrading it from special development area status to development area status. The hon. Member for Rossendale will probably be aware that that means that the local authority which is downgraded to such an extent loses approximately 7 per cent. of the grant normally paid under special development area status.
  Not only is the local authority affected. If a local authority such as the St. Helens borough council goes ahead with a plan to train school leavers for employment, it must tell the ratepayers that it is increasing rates by X per cent. that year because it intends to use the money for that plan. Such a project will be costly. St. Helens is at present training about 1,000 school leavers who would otherwise be signing the register for unemployment benefit or for employment.
  The hon. Member for North Fylde (Sir W. Clegg) said that he did not believe that the Government were responsible for any unemployment. All I can say is that they should look at what has happened in the country as a whole. The Government have tightened up the spending of most local authorities. They have cut hospital building and house building when many thousands of building workers are signing the register for the dole. That is tragic when many local authority housing departments have long lists of people who are waiting for homes for themselves and their families.
  Another example is the National Health Service prescription charges, which mainly affect the poorest sector of the community. Fares on trains and buses are another example. Not only people who must travel to work, but those who seek employment, are affected. The cuts in public spending mean that, while the Prime Minister and the Secretary of State for Employment advocate moving around the country to look for employment, people who receive the lowest benefits and the least money for survival are not permitted any grant to enable them to do so. That is happening when transport costs have risen to astronomical heights. They are higher than I have ever known in my experience in the House.
  It is wrong for hon. Members to point at one another with regard to unemployment. I have been here long enough to know that unemployment existed when we had a Labour Government. It is still here and it is worse than ever. This Government, who criticised the Labour Administration for the level of unemployment when they were in Opposition, are making a greater mess than ever.

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  Many women who are now out of work have decided not to sign the register because of their family status as housewives and mothers rather than signing on the dole and looking for alternative work. If such people are included, I believe that no fewer than 3 million adults are now unemployed.
  The Minister asked us not to cry "Wolf" and not to decry the region, as it would do more harm than good. Some of us have good news. We have industries in our constituencies of which we are rightly proud. Pilkington Brothers has set up in St. Helens a model headquarters, second to none in the United Kingdom, which should attract other firms to the area. The North-West region, including Merseyside, has large reservoirs of unskilled, semi-skilled and highly skilled workers for new industries coming to the area.
  I do not wish to press the case for St. Helens to the disadvantage of other parts of the region. Many local authorities in the region are without development or special development area status, so have the poorest chance of encouraging firms to come to their areas to take up the slack in the labour force.
  Following the Secretary of State's decision to downgrade St. Helens and other areas in the North-West to development area status or even less, I was part of a parliamentary deputation to his office to protest. The right hon. Gentleman smiled at our protest and said that he did not understand it because downgrading was a sign of success. I know of no downgrading that has proved successful. Downgrading a local authority means cutting its grant by about 7 per cent. If it has to offer 7 per cent. less than other areas to firms looking for sites to develop it will not stand a good chance of attracting them to the area, so its school leavers and adult unemployed will have less chance of finding a job.
  An area's status also has an effect on keeping the jobs that it has. Depriving an area of its grant, especially in the North-West and Merseyside, is unfair to workers, ratepayers and the local authority.
  Let me draw the attention of the Secretaries of State for Industry and Employment to two particular points concerning my area of Merseyside. First, when I met the St. Helens borough council with a group of Members of Parliament I discovered that councillors trying to find employment for the unemployed could not even discover the correct figures for those employed and those out of work in their own area. The unemployment figures for Newton-le-Willows are included in those for Warrington, so the severity of the situation in Newton is disguised. That is one reason why the councillors could not discover the facts.
  Secondly, a jobcentre is needed in Haydock to provide a better employment service to people who live in St. Helens but have to travel outside the borough to register. It would also provide a more accurate employment record for St. Helens.
  It is most important that the Government should recognise the problems of St. Helens. I understand that the local authority has written to the two Secretaries of State to whom I have referred asking them to meet a deputation of councillors and Members of Parliament. I do not know what the Secretaries of State intend to do about this, but I stress that it is a real problem. It is not just a case of going back to the Minister cap in hand and telling him that unemployment has risen still further in the St. Helens borough council area. The problem is far more complex.
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  A great basic industry is involved. The Pilkington flat glass industry, the glass container industry' and the glass scientific equipment industry have all been cutting their work force. The Pilkington company is known world wide not only for its ability to run its business well but for investing many millions of pounds in research. Pilkington Brothers brought float glass to the world. One machine can now produce all the flat glass that is required, sheet glass for windows as well as plate glass, with a minimum of polishing and grinding. Costs have been greatly cut, production has risen extremely high and the float glass machine can produce more flat glass than could be produced in the past with 18,000 employees.
  In that one firm, more than 4,000 people have been made redundant. Other firms are following suit both in St. Helens and throughout the North-West. Technology is taking the place of the labour force and the human race is being placed on the scrap-heap.
  I admit that the Government are spending some money on training. Nevertheless, the downgrading put into operation by the Secretary of State for Industry means that many local authorities have to find money out of ratepayers' pockets to operate training schemes for school leavers and the adult unemployed.
  I should like the Minister to take a message to his colleagues in the Department, and to the Ministers in the Department of Employment, concerning the St. Helens borough council. I make a special appeal on behalf of our local authority, which comprises six parliamentary constituencies. I should like him to consider bringing its representatives down to London, or going to St. Helens himself to meet there the Members of Parliament concerned and the councillors serving on the relevant committee. I should like him to discuss with them the special problems involved in training people and in bringing new firms to the town.
  There is also the problem of finding ways and means of retaining the firms that we have in the town, and the jobs in them. This applies not only to St. Helens but to the entire North-West region. Special measures need to be taken to help all those local authorities to retain the work force that they have in their towns.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): I have been informed that the winding-up speeches will begin at 9.10 pm. If hon. Members will shorten their speeches to about five minutes each, that will be helpful.
  8.56 pm
  Mr. Churchill: Naturally, Mr. Deputy Speaker, I shall, as always, pay heed to your injunction.
  It is a pleasure to follow the hon. Member for St. Helens (Mr. Spriggs). He was unusually frank and free from humbug, if I may say so, in what he said about the grave unemployment problem. All too often one hears people who make a lot of fuss about unemployment when in Opposition, but who ignore it when they get into office. The hon. Gentleman was the first to admit the grave position that existed even under the previous Labour Government. That was a fair point to make.
  The present Administration have had the misfortune of finding that their first two years of office have coincided with the gravest recession that the world has seen in 50 years. It was triggered by oil prices more than doubling during that two-year period. At the time of the last general election, the price of oil stood at $14 a barrel. Today, in

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  spite of recent price reductions on the world market, it stands at $32 a barrel, more than double the amount. This has had a massive impact on all the industrial nations, from which no Government could possibly cushion or shelter British industry or the British people.
  One sees the impact with a vengeance in the industrial heartland of the country. We have had the good fortune to be almost the only industrialised nation in the world, other than the Soviet Union, to be self-suffient in energy, so that the rise in oil prices has hurt us less than it has many other countries. On the other hand, as we are more dependent upon exporting than is almost any other country, it is inevitable that we are hit possibly more than is any other country in a world recession.
  The only wonder is that our export figures have stayed as buoyant as they have during the last few years. They are particularly buoyant at present. In spite of the notoriety of the Japanese as exporters, Britain exports a substantially greater proportion than Japan of total production. The credit should be given, perhaps, to no area more than the North-West. The worldwide recession has devastated British industry. For the greater part of this century Trafford Park was the largest industrial complex in Western Europe. Even today it is a massive employer of labour. More than 35,000 people still go to work there each morning. It is sad that there are no ships that are worth the name on the ship canal. That is partly the result of high dues, and partly the result of industrial disputes. It has become uneconomic for owners to bring ships up to the port of Manchester. That is sad and regrettable.
  The consequences of the world recession are there for all to see. It is scandalous and unacceptable that 367,000 people should be unemployed in the North-West. That is 12·9 per cent. of the population. I hope that the number of unemployed will be reduced at the earliest opportunity. There are great differences of opinion about how to achieve that. Certain Opposition Members say that we should spend more money. That is not the solution. There are 2·5 million unemployed in Great Britain. However, given the size of our economy we have more people in employment than almost any other Western European country.
  Mr. Straw: That is not true. With the exception of Belgium, our rate of unemployment is far higher than the rate found among our industrial competitors. In addition, unemployment in Britain has risen much faster than in any of our EEC competitor countries. On what basis did the hon. Gentleman base his assertion?
  Mr. Churchill: The hon. Gentleman either misunderstood or misheard me. I said that, although we had a high level of unemployment, we could draw some comfort from the fact that we also had one of the highest proportions of people still in work compared with all but two of our competitors in Western Europe.
  The Government must consider how to break out of the vicious circle into which the world recession has propelled us. It has led to a contracting national economy, which in turn has led to ever higher levels of unemployment. That in turn has meant that the taxpayer has had to pay the ever higher burden of unemployment and social security benefits. Consequently, fewer resources are available to the Government for capital investment. Our aim must be to create the virtuous circle of which Iain Macleod spoke
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  with such passion during the 1970 general election, shortly before he was struck down. We must create an expanding economy, which will in turn lead to less unemployment, less public expenditure, more investment, lower taxes and, ultimately, to more jobs.
  One other subject is of concern to my constituents, and that is the high and rising rate of crime and vandalism. Certain areas in my constituency have become virtual no-go areas. They are no-go areas at night, not only for the frail and elderly, but for able-bodied middle-aged men. They do not dare walk home from the pub, because of the high rate of crime.
  In those circumstances, it is reckless and irresponsible in the extreme of the new Socialist-controlled Greater Manchester council to vent its anti-police feelings and prejudices and to instruct the chief officer of police for Greater Manchester to cut his budget for this year by £1 million, which will inevitably mean fewer police on the beat and more crime, more vandalism and less security for the citizens of the area.
  Mr. Robert Litherland rose—
  Mr. Tom McNally: On a point of order, Mr. Deputy Speaker. I raise an issue that is fundamental to this and subsequent debates. Over the past two hours you and your predecessors have called eight hon. Members, of whom six have come from parties other than that which represents the majority in the North-West—namely the Labour Party.
  Mr. Deputy Speaker: That is not a point of order. The hon. Member for Stockport, South (Mr. McNally) knows that the selection of hon. Members to participate in debates rests with the Chair.
  Mr. McNally: On a point of order, Mr. Deputy Speaker. I thought that it was a matter of catching the eye of the Chair. I understand that lists are made. When Liberals, Social Democrarts and Conservatives are called by the Chair during a debate that takes place on an Opposition Supply day, there are fundamental rights—
  Mr. Deputy Speaker: Order. Mr. John Roper.
  Mr. McNally: On a point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. The hon. Gentleman knows that if he has any criticism of the Chair he has a remedy other than raising the issue with the occupant of the Chair.
  Mr. McNally: On a point of order, Mr. Deputy Speaker. The majority party in the North-West has been excluded from the debate by decisions taken outside the Chamber to give status to minority parties that should not be given to them. You are proceeding to do so again, Mr. Deputy Speaker, and as a result—
  Mr. Deputy Speaker: Order. Mr. John Roper.
  9.8 pm
  Mr. John Roper: The hon. Member for Stretford (Mr. Churchill) talked about unemployment, but I thought that his attitude to it was one of supreme complacency. Since June 1979 we have seen in the North-West a doubling of unemployment. That has been especially serious in areas that are having their assisted

  803
  area status removed. I speak in particular of Greater Manchester and parts of North Cheshire, including Warrington.
  The Under-Secretary of State for Industry said that the Government are keeping a close watch on developments. In view of the rapid deterioration in the rate of unemployment in the areas which have been assisted and which are soon to lose their assistance, I believe that we need more than a close watch. We need urgent action.
  The Minister referred to the advantages of enterprise zones. Many of those who initially supported the zones, including some in the constituency of the hon. Member for Stretford, are now a great deal more sceptical. They are especially sceptical of the enormous bureaucracy that has been built up around them by the Department of the Environment and others.
  The partnership programmes that were initiated under the Labour Administration have proved that they are valuable. It would be useful if the Government could use and build upon those schemes to provide additional resources for inner city areas. I was surprised when the Under-Secretary of State referred to derelict land grants. It is now much more difficult for local authorities in the North-West to take advantage of the derelict land provisions because of changes in local government finance. I hope that this issue will be considered by the appropriate Department.
  My constituency has benefited significantly from the temporary short-time working scheme. About 53,000 in the North-West have benefited from the scheme, especially in the clothing and textile industries. However, the scheme suffers from a disadvantage in being limited to a certain period. I hope that the Under-Secretary of State for Employment will be able to outline in detail the Government's plan both for extending the period of the scheme and extending its life from the period when it is due to expire. I hope that he will be able to do so because this matter causes considerable concern throughout the North-West.
  Since I have been a Member of the House, I have become accustomed, as we all have, I regret to say, to talking about the difficulties of the textile industries. What has become more serious recently is that those industries that were relatively successful in the 1960s and 1970s in creating jobs to replace those lost in the textile, footwear and mining industries have themselves become the industries in difficulties. ICL has already been referred to but, clearly, references can be made to other industries that have been successful in the past. That is a reflection of the Government's economic policy that has had such bad effects throughout the region.
  Finally, I refer to the problems of youth unemployment. It is not only the short-term problems of youth unemployment that will leave scars in our region, but the attitudes that will develop among our young people if they leave school this year and find themselves out of work, as so many of them will. The serious problems of our region require a number of urgent actions. I am worried that one of the great assets of the region, in terms of its re-industrialisation, its sciences and universities, is now under threat from the Government. Many of my constituents work at Salford University. They are alarmed at the prospects for their university as a result of Government policy of cuts in higher education. Yet their science and engineering are essential if we are to rebuild the economy of the North-West.
  804
  The Government should urgently tackle the problems of the North-West by restoring assisted area status to those areas that have had it removed, by developing plans for training to ensure that we have the skills when the economy builds up, and by substantially revising general economic policies to give us an upturn throughout the economy which will in turn benefit the North-West.
  9.12 pm
  Mr. Charles R. Morris: I preface my speech by thanking the two Ministers—the Under-Secretary of State for Industry, who opened the debate, and the Under-Secretary of State for Employment, who will reply—for the attention that they have given to the problems confronting the North-West. However, I shall comment on the absence of the Secretary of State for Industry from the debate. He has not been present for any part of the six hours during which we have debated this crucial issue. If my memory serves me right, he was not present for the last debate that we had on the problems and issues facing the North-West.
  I congratulate my hon. Friend the Member for Liverpool, Kirkdale (Mr. Dunn) on his opening speech. It was perceptive and thought-provoking. I admired the analogy that he sought to draw between the debate and the People's March for Jobs. If that march and the debate seek to do anything, it is to focus attention on the crucial issue of unemployment as it affects the North-West region. The real achievement of the debate is that it has concentrated correctly on the realities of life and the problems that affect the lives and the economic well—being of nearly 7 million people in the North-West.
  I accept that it would be misleading to convey the impression that all the problems of the North-West started with the election of this disastrous Government in 1979. They did not. But our charge against the Government is that their actions have only exacerbated the problems or, worse still, that they have tended to ignore them.
  Unemployment is the major issue facing the region. The Greater Manchester council outlined the realities of the problems facing the North-West in a document sent to hon. Members recently. In February this year the unemployment rate in the North-West was 12·3 per cent.—a rate exceeded only in Scotland, the North, and Wales. But none of those areas has seen unemployment rising as fast over the past year. In addition, the North-West has substantially more people out of work than has any of those other regions, and more than Wales and the North put together. That is the reality of the problem facing the North-West.
  My hon. Friend the Member for Kirkdale quoted statistics. One can interpret statistics in different ways. One could talk about the 12·3 per cent. average unemployment throughout the region, but the statistic that impinges on the thoughts of everyone in the North-West is that quoted by my hon. Friend the Member for Kirkdale when he highlighted the ratio of the unemployed to vacancies. The problem confronting the unemployed is the prospect of getting a job.
  The appendix to the Norwida report shows the ratios of the unemployed to vacancies in some important areas of the North-West. In Rochdale it is 130 unemployed people for every vacancy at the local employment offices. In Bolton it is 70:1, in Crewe it is 88·2:1 and in Birkenhead it is 69:1. What are the job prospects of the unemployed in those towns and cities?

  805
  I recognise the difficulties that have faced the Government in the past two years, but one tends to judge Governments on their actions, and I am mindful of the actions that the Government took when they assumed responsibility for the affairs of this nation. Within days of taking office they withdrew intermediate area status from many parts of the North-West. That was bound to have an impact on the ability of the region to attract new industry.
  Next, the Government abolished the North-West economic planning council and virtually abandoned the programme of dispersing the Civil Service out of London. No Government should be surprised if the people of the North-West rightly interpret those actions as a kick in the teeth for their region. The Government took these actions in a region struggling to cope with an inherited legacy of urban and industrial dereliction and batting to survive economically with a contracting manufacturing base.
  The Government could not put forward the excuse that they were not aware of the problems confronting the North-West. In 1974 the "Strategic Plan for the North-West" was published, and it said:
  "The North West is clearly in need of considerably more effort and resources before a state of balance can be claimed; until this need is met, the region will continue to be left behind the more favoured regions and its economy and quality of life will continue to suffer … at least a decade of special effort is necessary to establish a reasonable balance between the North-West and other regions."
  Despite that the Government took the action that I have indicated and went on to cut resources in education, hospital and Health Service provision, housing provision and rate support grant for every major authority in the North-West. In the city of Manchester, the cut amounted to £40 million. Liverpool suffered a similar fate, as did every community in the North-West. People who look at the Government's actions ask "Are they really concerned with the future of the North-West? Do they really care?" That is what Ministers must answer.
  As the effect of the Government's policies started to emerge, my colleagues in the North-West group of Labour hon. Members and I were not slow in organising a deputation to see the Secretary of State for Industry. We warned the right hon. Gentleman of the consequences of the withdrawal of intermediate area status from many areas of the North-West. He listened quietly and responded to the points that we put. He also wrote me a letter on 5 October 1979, which stated that:
  "the recent changes in regional industrial policy form part of the Government's policy of creating an economic climate which will encourage enterprise and initiative".
  As a result of two years of enterprise and initiative, there are 350,000 people in the North-West in the dole queue. The right hon. Gentleman talked about initiative and enterprise. He should go to the North-West and start talking about enterprise and initiative to those at Fodens, Vauxhalls, Courtaulds, Tate and Lyle and 100 other companies who have lost jobs during the past two years. It is a strange diagnosis. If what has happened since 5 October 1979 is enterprise and initiative, I hate to think what would happen if the Secretary of State for Industry really put his mind to it.
  I can understand the problems that confront not only the North-West, but the nation as a whole. I believe, however, that the situation in the North-West is sufficiently serious
  806
  to justify a senior Minister of Cabinet rank touring the region to study the scale of the problems, to identify possible solutions and to prepare a plan of action.
  I warn the Government that communities in the North-West will not continue to tolerate men finding themselves and their industrial skills thrown on the scrap-heap and themselves in the dole queue in the numbers experienced so far. They will not continue to tolerate youngsters in many communities still having no hope of obtaining even their first job.
  For far too long children in the North-West region have been educated in old and dilapidated school buildings. For far too long many of the sick and infirm in the North-West have been treated in hospitals built at or before the turn of the century. I heard the chairman of the regional health authority say that he had 18 new hospitals on the drawing-board but that only two had been built. That is the reality of health provision in the region.
  No Government can go on ignoring the plight of the region, which has contributed so much to the industrial history of not only this country but the world.
  Sir Walter Clegg: May I take up the right hon. Gentleman's point about health provision? I said earlier that his Government accepted the resources allocation working party report, which recommended transferring resources from the South-East to the North-West and one other part of the country. That process is still continuing. Will the right hon. Gentleman admit that?
  Mr. Morris: The hon. Gentleman is right. The last Government sought to reallocate resources from the South-East to the North-West. The process is continuing, but there must be positive Government discrimination in favour of the North-West in the provision of health services.
  Mr. Frank R. White: Is my right hon. Friend aware that within the past 12 months the chairman of the North-West regional health authority has said that as a result of the Government's policies in changing the direction of finances to the Health Service RAWP has been put back 30 years in the North-West?
  Mr. Morris: I appreciate my hon. Friend's point.
  We have heard some impressive speeches from both sides of the Chamber on the problems and successes of the region. There has been brilliant analysis of the problems. Hon. Members have succeeded in identifying the problems of the constituencies and communities that they represent, but what the North-West needs now is action.
  I should like a Minister of Cabinet rank to tour the North-West and provide a plan of action. I should also like the Government to give serious consideration to a development agency for the North-West. Attracting industry and inward investment cannot be left to local authorities. Attracting inward investment does not stop at municipal or county boundaries. It must be planned regionally. Development agencies work effectively in Scotland, Wales and Northern Ireland. The North-West is entitled to ask "Why cannot we have similar provisions?"
  In addition, I should like the Government seriously to consider effective curbs on textile imports. I accept that the multi-fibre arrangement is to be debated in the House on Thursday. However, I must say now that the opposition are conscious that imports of textiles and clothing into the

  807
  European Community as a whole from low-cost economies increased by 19 per cent. under the first MFA arrangement and by 7 per cent. under the current MFA.
  Since 1973, total consumption of those products has risen by only 1·2 per cent. The share of the EEC market taken by imports increased from 21 per cent. in 1973 to an estimated 40 per cent. in 1980. We want global ceilings for textile imports, as well as individual quotas. Faced with extinction, we want realism.
  I hope that the Government will give serious consideration to the problems of ICL, because the bulk of that company's manufacturing units are in the North-West. I hope, too, that the Government will consider advancing the replacement of the Government computers. At one time I had responsibility for the Government's computer installations, and I realise that the life of Government computers has recently been extended from seven to 10 years. A number of computers are up for replacement, and I hope that the Government will order them and give job and financial security to ICL.
  Mr. Robert Sheldon: Does my right hon. Friend agree that in addition to not increasing the life of their computers, from seven to 10 years, the Government should accelerate orders, in view of the difficulties of the computer industry and the redundancies that are being declared at Ashton-under-Lyne and in the Greater Manchester area? Those two factors—accelerating orders and reducing the life of computers to what it was previously—would greatly assist the areas.
  Mr. Morris: My right hon. Friend correctly emphasises what was said by my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman), who has a major constituency interest in ICL.
  I want to say a brief word about Manchester international airport. I realise that the British Airports Authority is considering a proposal to invest £150 million in Stansted airport, under the guise that it should be London's third airport. I believe that that £150 million should be spent on Manchester international airport. Instead of London's third airport, we should start thinking of Britain's third airport, and make it Manchester.
  The present energy policy, far from assisting industry in the North-West, is doing immeasurable harm to certain sections of industry, particularly steel making, wire making, paper making and chemicals. I hope that the Government will seriously consider the possibility of contract prices of electricity and gas for those industries.
  The Minister argued that it was not the Government's intention to provide a crutch for uncompetitive industries in the North-West. I emphasise that the North-West is not seeking crutches. We are not a lame duck region. With the ingenuity and skills of our people, the North-West can make a real contribution to the future economic well-being of this nation.
  Our debate is about how this Government can provide the opportunity to get the North-West back to work. I remind the Government that the North-West of tomorrow must not be sacrificed in favour of some fashionable monetarist theory of today.
  9.34 pm
  The Under-Secretary of State for Employment (Mr. David Waddington): The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) said that Ministers spent so
  808
  much of their time in the more prosperous areas that they did not have time to consider the problems in the North-West. I do not know whether he was referring to my travels around Padiham, Hapton, Harle Syke and Sabden, but I assure him that I spend a great deal of my time in the North-West. I was taught that people came to London to get into trouble. I spend most of my time trying to keep away from the place. I do not dwell in London for a moment longer than necessary when the week is ended. Most of my hon. Friends who represent the North-West go to at least as much trouble as I do to maintain their ties with the places that sent them here.
  There are many old faces here today, and one or two welcome visitors. I do not know how the North-West will feel when, as is probable, it loses a miner and Methodist minister and receives in exchange an itinerant lecturer from Nuneaton. We wish him well. The North-West has survived worse disasters. We heard an interesting contribution from the hon. Member for Newton (Mr. Evans) who dwelt on what may happen in Warrington. I gather that there is no question of his throwing his hat into the ring.
  We are always glad to see the hon. Member for Burnley (Mr. Jones). He made some kind remarks about me. Somewhat to my embarrassment, he quoted a speech that I made in June or July of 1974. It showed our common interest in the problems of North-East Lancashire. I have no reason to feel horrified at being reminded of what I said. I dwelt at great length on the problem of communications and said that I believed that the prosperity of North-East Lancashire lay in an improvement in communications. I am glad to say that much has happened since then. Only last week the Department of Transport announced that during the next few days a contract will be signed for the construction of the M65 from Hyndburn to Burnley. That is good news. We also know that the Haslinden bypass is well under way. When that road is completed there will be a link from the road to North-East Lancashire through to the M66 and beyond.
  The hon. Member for Burnley also referred to intermediate area status. I remind both him and the right hon. Member for Manchester, Openshaw (Mr. Morris) that we must be careful not to talk loosely about the Government having withdrawn intermediate area status within—as the right hon. Gentleman said—weeks of coming into office. The right hon. Gentleman knows that North-East Lancashire still benefits from intermediate area status. It does not cease to become an intermediate area until the end of July 1982.
  It was necessary to contemplate limited resources being spread over a wide area, and then to decide whether the limited resources should be concentrated in the areas where the problems were greatest. The Department of Industry is keeping a close watch for any signs of a long-term structural decline that might call for adjustments to the present intermediate area status. In that sense, the matter is always under review.
  I am glad that the hon. Member for Burnley is here because before I entered the House he was parliamentary private secretary to the then President of the Board of Trade, the right hon. Member for Battersea, North (Mr. Jay). He came to Burnley many years ago in either 1966 or 1967. To use the vernacular, he got the bird. I remember reading the local newspapers, and few Ministers have received a worse reception. I am making this

  809
  comment because it will remind all hon. Members of what most of them already know—that the problems faced by Lancashire and the North-West generally are not new.
  I do not believe that the problems will be solved by the establishment of a development agency or the creation of a Minister for the North-West or a Minister for Merseyside. We cannot transform a region's prosperity by creating a new agency. We cannot transform an economy by creating more committees or by appointing additional Ministers.
  Mr. Dan Jones: What the hon. and learned Gentleman has said is true. However, surely he would not expect me to have instructed the Minister. I was simply his PPS. The situation was reversed. He was instructing me. All that I ask is that the sentiments admirably expressed at the time be expressed by the hon. and learned Gentleman from his position of advantage—no more than that.
  Mr. Waddington: The hon. Gentleman knows why I was referring to the matter. People need reminding that these problems are not new.
  The North-West is undoubtedly suffering from the present recession, but we must also remember that virtually no area has remained immune. The difference between our area and others is that the difficulties are not new to us. We have had our problems for a long time—although, to hear some Opposition Members, one would scarcely believe that.
  Unemployment brings much misery. We as a Government are determined to do all that we can not merely to alleviate the hardship of unemployment but to deal with the root causes. I do Opposition Members the credit of accepting that they, like us, want a reduction in unemployment. The difference between us is in our judgment as to how that can best be brought about.
  I shall never forget learning first about unemployment as a young man coming down Moor Lane into Padiham and seeing in those days knots of 20 or more men leaning against the church railings. Unemployment today does not bring as much hardship as it did then, but I know perfectly well, as I have always known, what an evil it is. [Interruption.] I wish that Opposition Members would listen for once. They might then leave this Chamber less ignorant than when they entered it.
  Over the years I have also learnt how intractable some of these problems are and how wrong it is for politicians to go around pretending that there are panaceas.
  Mr. Straw: Will the hon. and learned Gentleman give way?
  Mr. Waddington: I shall not give way. The hon. Member has not been present during the debate.
  Mr. Straw: On a point of order, Mr. Deputy Speaker. As the hon. and learned Gentleman has mentioned my absence from the earlier part of the debate, I should like to state for the record that I was not present for the beginning of the debate because I had to see a Minister about yet another catastrophe which the present Government are wreaking in my constituency.
  Mr. Deputy Speaker: That is not a point of order.
  Mr. Waddington: The hon. Member is taking time from those who have been present.
  810
  At present we are suffering from the consequences of lack of competitiveness and from a recession which has hit the whole of the Western world. It is nonsense to talk, as did the right hon. Member for Ashton-under-Lyne, of a Government-manufactured slump. Our problems will not be solved by a massive reflation, but they can be solved if we make sure that we come out of this recession able to seize the opportunities which will then occur and do not repeat the mistakes of yesterday by allowing a new surge of inflation to price us out of the markets of the world.
  I must stress that in these most difficult times the North-West has done remarkably well in helping to sustain the volume of national exports. Finns in the North-West have hung on to many markets at greatly reduced margins, and by doing so have kept themselves in a position to get the maximum benefit from the upturn. Even in these difficult times, people are still prepared to take risks and set up in business, as has been mentioned by my hon. Friends the Members for North Fylde (Sir W. Clegg), Macclesfield (Mr. Winterton), and Preston, North (Mr. Atkins).
  My hon. Friend the Member for Bebington and Ellesmere Port (Mr. Porter) was right to point out some of the hard and unpleasant truths. We have not done well as compared with our competitors in unit labour costs. We have not done well in overmanning and in many sectors in various industries. The docks industry is one for a start.
  Mr. Frank R. White: Which company?
  Mr. Waddington: Every company in the docks industry.
  The North-West has much to offer. I am sorry that sometimes we do not spend enough time saying how much there is to offer. Over many years, we have seen a change from the dependence on our old industries and the new industrial structure coming into existence. That is a well-diversified industrial structure. We have a good, adaptable and highly skilled work force. Over most of the scene, there are extremely good industrial relations. We have a splendid transport system. I have mentioned North-East Lancashire. The first motorway was built in Lancashire—the Preston bypass, the first part of the M6. That was not built under a Labour Government. It was opened on the day of my wedding in 1958, so I remember it.
  Even in these difficult times, the record of achievement has been remarkable, but I shall not read out a catalogue. Hon. Members read the bulletins which are published by the North-West Industrial Development Association. We know what has happened in British Aerospace, electronics and chemicals. That is written for all of us to see. I should like to pay tribute to the work done by Norwida and in North-East Lancashire by the North-East Lancashire Development Association. The hon. Members for Burnley, Blackburn (Mr. Straw) and I know that work well and we have learnt to work with and appreciate the contribution of the officers.
  Mr. Straw: The hon. Member for Nelson and Colne (Mr. Lee) should also be included.
  Mr. Waddington: I am sorry. I should not have omitted my hon. Friend the Member for Nelson and Colne (Mr. Lee).
  Many burdens are faced by industry, some of which are unnecessary. I should like to say a word or two about rates because I cannot accept the assertion that somehow or

  811
  other firms are not affected by high rates, and that high rates cannot lead to job losses. Of course, it is difficult to separate the effect of one increase in costs from another, but industry is bearing an ever greater rates burden. No one can seriously doubt that.
  We have heard much about Manchester in the debate. In Manchester, 64 per cent. of the cost of local government is borne by industry. Industry does not have a vote in the decisions on the expenditure of that money. The right hon. Member for Manchester, Wythenshawe (Mr. Morris) talked about the problems faced by the Manchester city council. It is worth remembering that at least one record has been broken by that council. It has a higher ratio of staff to population than anywhere in the whole country.
  Mr. Kenneth Marks: Will the hon. and learned Gentleman give way?
  Mr. Waddington: No, I shall not give way. I must continue with my speech.
  Energy costs were also mentioned. The NEDC task force report on comparative energy prices concluded that prices of electricity and gas for over 95 per cent. of industrial consumers are not out of line with those on the Continent. Steps have been taken, as the right hon. Member for Wythenshawe knows, to make changes for some large consumers.
  Textiles have been badly hit. That is sad when that industry has an overall level of productivity and an industrial relations record which could be a model for others. The Government have been doing their best to help in the broad framework of their economic policies and their international obligations.
  I hardly need remind hon. Members that there will be a debate on Thursday on the multi-fibre arrangement. The Government have given more protection to the textile and clothing industries than to any other manufacturing industry. From experience at the end of 1980, we all know that trade barriers can lead to retaliation, as we saw with our exports to Indonesia. We took action within the EEC over American yarn. Talking of America, I also remind hon. Members that some pressure will come off industry as a result of the fall in the pound and the decontrol of American oil prices.
  Industry, and particularly the textile industry, receives substantial aid under the Industry Act and the temporary short-time working compension scheme. The picture is not all gloom in the textile industry. Josiah Swale, a specialist silk manufacturer in the constituency of my hon. Friend the Member for Macclesfield, reports overtime since November 1980 and boasts that not a loom has been idle in over three years, which shows what can be done.
  The Government recognise the problems faced by Merseyside, but no other area is eligible for so many forms of financial assistance. The hon. Member for Liverpool, Kirkdale (Mr. Dunn) said that the area deserved sustained financial assistance, which is exactly what it has had. [Interruption.] If the hon. Member for Bury and Radcliffe (Mr. White) wishes to make a speech to himself, perhaps he would make it in the Tea Room.
  Merseyside is a special development area, so is entitled to the highest forms of regional selective assistance. It has an urban development corporation, an inner city partnership and an enterprise zone. No area could have been granted more regional assistance.
  The hon. Member for Liverpool, Walton (Mr. Heffer) made a typically attractive speech. He said that the
  812
  stupidity of our economic system was the cause of the problem. We know what he means. There is an easy way to get rid of unemployment. We could do so by direction of labour or by abandoning our free society, but not many people want that. The hon. Gentleman mentioned crime and unemployment, as did another hon. Member. He said that he did not blame people who committed crimes. Those are dangerous words. When I was at the Bar, the increasing crime rate was blamed on growing prosperity. People now say that less prosperity is to blame. Responsible citizens should not say anything that the ill-informed could take as an excuse for anti-social behaviour.
  Let me deal with public investment in the North-West. The precise effect of regional aid is extremely difficult to quantify. One looks at the aid going to Merseyside and wonders to what extent the system is working. However, projects costing £174 million, and involving 3,267 new jobs and the safeguarding of 7,000 jobs, have been the subject of accepted offers under section 7 of the Industry Act.
  My hon. Friend the Member for North Fylde (Sir W. Clegg) referred to Health Service resources. There has been a shift of resources towards the North-West in each of the last three years, correcting a pronounced imbalance prior to that.
  On housing, my hon. Friend the Member for Chorley (Mr. Dover) made some criticisms about the new town. Nevertheless, 15·5 per cent. of the housing investment programme goes to the North-West. There has been an increase in each of the last two years. The North-West is top of the regional list for housing action areas. West Lancashire district council is to spend 40 per cent. more on housing than its HIP allocation would allow as a direct result of capital receipts.
  What a contrast that is with Ellesmere Port, about which we heard a short time ago, and also, I am afraid, with Burnley. When it was pointed out that various devices were being used to cheat people of their statutory rights, the hon. Member for Bootle (Mr. Roberts) had the impudence to say that it was allowed under the Act. I do not think that anyone should be proud of thinking of devices to cheat people of their rights.
  With regard to roads, starting under the guidance of the great James Drake, the North-West has been in the forefront of the extensive road construction programme since the 1960s. I follow exactly what was in the mind of my hon. Friend the Member for Macclesfield in speaking of a public works programme. Certainly, there are many attractions in that, but it would still involve money which would not bring a return for a long time. My hon. Friend himself reaffirmed his and the Government's determination to get rid of inflation. As he acknowledges, that must remain our chief task. What we do must be in that framework and with the knowledge that that is our main task.
  As a Minister at the Department of Employment, I had intended to speak briefly about our various special programmes. As time is so short, however, I do not think that it would be appropriate for me to do so. Nevertheless, I hope that many people will realise the great help being given to industry by the temporary short-time working compensation scheme and by our special programmes, particularly the youth opportunities programme, from which 64,000 people are benefiting in the North-West. I pay tribute to the unions for their co-operation in that programme.

  813
  We must now look forward, as our new training initiative does, to a time when nobody will leave school without going on to higher education and proper training to learn a skill. Again, however, these things cannot be achieved in a day. I am afraid that I cannot help the hon. Member for Kirkdale by saying that STEP could be extended for three years in the foreseeable future.
  So there it is. We all know the score. We know that the problems are not new and that many of them are outside the control of Government. If things are to pick up in the North-West, as in the country as a whole, we must defeat inflation, and industry must come out of the recession in a competitive position. It must be in a position to produce what people want, when they want it, and at a price that they will pay. There is ample evidence that firms in the
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  North-West realise this and are equipping themselves now to make sure that they take every advantage of the upturn when it comes.
  Our policies are aimed at creating a climate in which firms feel that they can invest and expand with the likelihood of a return on their investment. There is no doubt at all of the important role of the small business sector, about which we have heard a great deal today. We have also heard much about the qualities of the people of Lancashire and the North-West. I am sure that they, under the leadership that we are giving, can master their present difficulties in their interests and in the interests of the country as a whole.
  Mr. Carol Mather (Lord Commissioner of the Treasury): I beg to ask leave to withdraw the motion.
  Motion, by leave, withdrawn.

European Community (Food and Management)
Mr. Deputy Speaker (Mr. Bernard Weatherill): Mr. Speaker has selected the amendment on the Order Paper.
10 pm
The Minister for Overseas Development (Mr. Neil Marten): I beg to move,
That this House takes note of European Community Documents Nos. 4318/79 (amended Commission proposal for a Regulation on Food Aid Management) and 9175/80 (draft Resolution on the use of Community food aid and draft Regulation layind down general rules for the supply of products other than cereals, skimmed milk powder or butteroil to certain developing countries and specialised bodies) and of the updated explanatory memoranda of 5th June; and endorses the Government's intention to work for the early adoption of a Regulation on Food Aid Management, on the lines set out in the explanatory memoranda, and urgently to encourage greater reinforcement by the Community's Food Aid programmes of efforts by developing country recipients to improve their own food and agriculture production.
I welcome the Select Committee's recommendation that because of their legal and political importance these documents should be further considered by the House. Food aid is one of the main instruments of the Community's development policy. Unlike the European development fund, it is provided to developing countries all over the world. It will cost the Community development budget about £200 million this year. About one-fifth of this will fall on the British aid programme.
Mr. Tony Marlow: My right hon. Friend is talking money. I should be very grateful if he would tell he House exactly what, in European prices terms, will be the value of the food that will be distributed in food aid, so that there is no misunderstanding.
Mr. Marten: I shall come to that shortly. I said that it will cost the Community development budget about £200 million this year. About one-fifth of this will fall on the British aid programme. This is apart from the related production and storage costs, which form part of the ordinary cost of the common agricultural policy. So we are not talking about small sums.
This short debate is also timely for another reason. A few days ago there was a debate in another place as a result of a wide ranging report by the relevant Sub-Committee upon the different aspects of the Community's aid policies. Food aid was scrutinised as part of that review, and there was a remarkable unanimity of comment upon it. The Government's own views were given in that debate and closely coincided with what was said by others. We shall be publishing a detailed response to the recommendations made by that Sub-Committee as soon as we can.
These two documents for debate tonight propose, first, a new policy and management framework for food aid and, secondly, arrangements under which it would be possible to supply products other than cereals and dairy products as such aid. They were originally put forward by the Commission about two years ago, but little progress was made, because of conflicting reservations from other member States We are bringing them before the House for examination now because it looks, at last, as though there is a good chance of getting the Council of Ministers to agree in the next few days on compromise arrangements
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based on modifications to them. I shall explain these in a moment, but it may be helpful to the House if I first outline briefly the past history of this question.
When the Community's food aid programme started in 1963, first with cereals and later with dairy products, its chief aim plainly was to dispose of agricultural surpluses. Taking cereals, the Community then became a party in 1967 to the international grains agreement, whose two wings were the wheat trade convention and the food aid convention. So the legal basis on which food has been given as aid has been article 43 of the Treaty, which relates to the common agricultural policy, and article 113, which deals with the common commercial policy.
When we and others joined the Community we too became bound by the food aid convention, and the Community's pledged annual contributions of cereals were increased accordingly. In 1980 a new food aid convention was negotiated. This provides a guaranteed total of cereals aid pledges of 7·6 million tonnes every year until mid-1983 from donor members. The Community's share of this is 1·65 million tonnes, and of this over half—927,663 tonnes—is paid for from the Community's budget and administered by the Commission. The rest is split up between the member States and handled bilaterally. Our own share of this is about 117,000 tonnes.
Dairy products aid began in 1973, and consists of dried skimmed milk and butteroil. Unlike cereals, it is administered and paid for wholly by the Community. It reached its present level of 150,000 tonnes milk powder and 45,000 tonnes butteroil in 1976, when increases were made that, among other things, allowed large amounts to be pledged to India, over several years, to support "Operation Flood"—a scheme that many hon. Members may have seen, which is designed to boost India's dairy industries and to bring important benefits to rural producers. I mention this because so far it is the only example of a forward food aid commitment by the Community over several years ahead.
Very small quantities of sugar have been given as aid through the United Nations Relief and Works Agency to the Palestinian refugees and rapeseed oil is going to China. Very exceptionally some other products have been bought on local markets to meet emergencies—red beans were so provided last year to Nicaragua in the wake of the civil war.
Ever since Britain joined the Community we have striven, with some other member States, to shift the basis and administration of food aid from surplus disposal to development. There was a breakthrough in 1977—I pay tribute to the right hon. Member for Lanark (Dame Judith Hart) on this—when we succeeded in getting the Council of Development Ministers to adopt revised criteria for allotting such aid and a whole range of other policy decisions that improved its effectiveness.
But food aid is really still only a kind of balance of payments aid to the poorer importing countries. At the end of last year, things were carried an important stage further when the Development Council agreed to multi-year forward commitments. These will be made when, amongst other things, food aid is to be used more directly together with European development fund or non-associates' aid to put specific development projects into effect. The Council also agreed to provide a proportion of food aid to build up stocks, case by case, when a developing country is setting up a well-defined, socially useful and economically sound food security programme.

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So far, so good. But there is still much more to be done to see that food aid that is given for development has a really positive effect upon the prospects of the recipients. Those who have looked closely at this question are convinced that in some cases—it may only be a few, but certainly some—the availability of food aid allows difficult decisions to be postponed on necessary changes in internal policy, which would make a big difference to domestic food and agricultural production. And the use of food aid directly for development projects—to pay workers on seasonal construction, or to feed schoolchildren—does not always help these major internal issues to be tackled.
We shall carry forward work in the Community on how to improve things further during our Presidency. The problems that remain will not all be solved simply by the Council adopting a proper management regulation, but when it is agreed the regulation will be a major step forward. First, it will incorporate in Community law the policy improvements already made since 1977, and will found this partly upon article 235—the basis of common development actions—and not article 113, which deals with the common commercial policy. Secondly, it will provide a system for settling food aid issues that is much simpler than the present arrangements, under which, in principle, everything has to be agreed ad hoc by the Council. So it should cut down bureaucratic delays and increase efficiency.
At the same time, the compromise proposals that we are now considering will continue to reserve to the Council decisions on several policy issues regarded as major by various member States. These include the total volume of aid of each product; the share of cereals aid due from individual member States, as against the Community; the list of eligible recipients; the basic and derived products to be supplied; and the general criteria for transport of food aid beyond the FOB stage.
For its part, the Commission will be completely responsible for day-to-day work under the programme. It will also chair a Committee of member States' representatives, which will decide by qualified majority on allocations to individual countries and organisations, on the size of the reserve, and on the amounts of cereals to provide for emergencies and for international reserves.
I should underline that in the case of emergencies, as opposed to food aid for development, the Commission will also be able to decide on individual actions and to provide up to three months' supply of the food deficits needed by those affected. Swift action of this kind is obviously desirable, provided member States are told at once and are given the right to quick consultation as necessary. Last year about 20 per cent. of the cereals programme and 10 per cent. of the dairy products were directly used for emergency relief in this way.
The powers reserved to the Council are the chief difference between the new compromise and the Commission's original proposal, though it also mops up the arrangements for diversifying products and contributing to food security that are proposed in Document 9175/80, on which the Council has already taken the decisions that I have mentioned.
I understand that if the Council accepts the Presidency's proposal the Commission may still dissent, and the matter would then have to go to the European Assembly for
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conciliation. But we place great importance on the early adoption of a sound and continuing new legal basis for food aid.
Mr. Marlow: My right hon. Friend has just said that if there is a disagreement between the Council and the Commission that has to go to the Assembly for conciliation. What powers does the Assembly have? How does it effect that conciliation? I think that it is a very important matter for this House.
Mr. Marten: As I understand it, a conciliation committee has to try to arrive at an acceptable solution. I do not think that the Assembly has any powers in this respect.
We recognise that, like ourselves, other member States have issues of major importance to them on which they want to safeguard their interests. We congratulate the Dutch Presidency on the very considerable efforts and skill that it has deployed in making these compromise proposals, and for our part we want to see them adopted as soon as possible.
I undertake that if the Commission brings forward proposals for additional products to be given as aid we shall ensure that the Select Committee will be given time to comment upon them before the Council adopts them.
Finally, I shall sum up our views on the balance of the Community's food and effort. The volume of food aid is quite large enough. We should not want it increased, and we should indeed prefer to see dairy products aid, which is usually of less value, reduced somewhat.
The distribution of food aid is now broadly satisfactory as between poorer and wealthier countries. Last year 90 per cent. of cereals and 85 per cent. of dairy products went to poorer countries. The Commonwealth received 29 per cent. and 30 per cent. respectively. Because of the special problems in Africa, the share of non-associated countries fell to 34 per cent. and 32 per cent. respectively, but more needs to be done to concentrate the programme if we can, including bigger Community allocations to the main international agencies.
The use of food aid could be further improved, especially by seeing that it reinforces sensible policies for agricultural and food production across the board, rather than sometimes tending to undermine them. Direct help for poor and vulnerable groups, and in emergencies, also means continuing to channel aid through voluntary and international agencies.
The staffing of the Commission's food aid side should, we think, be strengthened by transferring people from less urgent work to somewhere else in the Commission. That is, of course, a matter for the Commission. The way is now open for forward commitments. We should like to see more food aid bought from developing countries, such as Zimbabwe, and more in the form of local products suitable to the people's diet. Article 3(2) of the original Commission proposal has been retained and refined. It mentions specifically the possibility of buying in other developing countries, if possible in the same geographical region, if there is an emergency or if the products needed are not available in the Community market.
While I naturally have sympathy with the general feeling behind the amendment, I regret that the Government cannot accept it. Whether food given to relieve hunger and promote development is in surplus or not, it still has value for the recipients. It is therefore

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rightly classed as "aid", in just the same way as goods and machinery produced by the industries of the originating country. To prevent donors abusing this arrangement by describing as "aid" money that is really spent to support their own farmers, food aid may be valued only at world market prices. So if the total Community cost comes to, say, £500 million, but the world market price for the same products is only half that, £250 million will be shown in chapter 9 of the Community's budget, which deals with development aid, and the rest in chapter 6, which deals with agriculture.
If the Government and the Community accepted the amendment, the consequence would be the transfer of all expenditure from chapter 9, dealing with aid, to chapter 6, dealing with the CAP, with a resulting fall in the Community's aid performance. We could not agree to such a fall on chapter 9 being made up by other Community aid expenditure, since that would push up the overall cost of the Community budget, which we are trying to restrain. Equally, we could not make up the difference ourselves by other forms of non-Community aid, since that would increase public expenditure overall.
Finally, to transfer these costs to chapter 6 would mean giving up all the ground that has been won by this Government and their predecessors in getting food aid more firmly established on a developmental basis. Its disposal would be entirely a matter of agricultural surplus management. The whole basis of the regulations that we are now discussing would collapse. The result might be that much more subsidised food was given away—but without any of the safeguards for which we have worked so hard—or that all food aid grants were stopped and the products were sold instead—probably to wealthier countries.
Mr. Nigel Spearing: I am grateful to the right hon. Gentleman for allowing me to intervene, as my question may save time later. In his explanation of the Government's attitude to the amendment the right hon. Gentleman implied that its acceptance would increase the size of the budget, yet it appears that it is a matter of transfer from one chapter to another. Is he telling the House that the cost of cereal and dairy food aids do not at present come out of the agricultural budget?
Mr. Marten: I said earlier, when I quoted a notional figure of £500 million, that the world price comes under the development budget and the difference between the world price and the export price is on the CAP.
Accordingly, I commend the documents to the House, and the Government's position on them.
10.19 pm
Mr. Frank McElhone: The debate brings into question once again not only the food aid management policy, but the aid and development policies of the Community. Although the Government's motion is more than the usual anodyne motion tabled on such occasions, nevertheless, consistent with his former track record on the Common Market, the Minister will no doubt privately agree, and possibly some day publicly tell us, that the motion is far from radical in its meaning.
I congratulate the Minister on his appointment to the Privy Council. Our difficulty is that, however much we disagree with him, we all like him personally. The right hon. Gentleman and the people of this country know that
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the Government and the Prime Minister are unwilling, if not unable, to achieve the necessary fundamental reforms of the structure of the EEC to do something, as I have urged time and again, about the rampant self-interest of the French.
My right hon. and hon. Friends and I welcome the great election victories of President Mitterrand and the French Socialist Party, but our Prime Minister and Government should have been trying to change the portfolio of the Commissioner for Development. I see the Minister nodding. The French have held that portfolio almost since the Treaty of Rome was signed. No one doubted the efficiency and ability of Claude Cheysson, but he is now the French Minister for External Affairs and we have in his place a former French Minister of Agriculture. The Opposition and some Conservative Members who have expressed concern about the rampant self-interest of the French must have cause for further concern.
If we are to have a realistic food aid programme, we must also have an efficient European development fund, and the Community aid programmes must be just and fair. Former French colonies seem to get an advantage over many British interests, despite the objections of our Government.
Those in the aid world have expressed continuing concern in many meetings with us. We all believe that too often the food aid programmes are merely a ploy for the dumping of CAP surpluses. I have no doubt that that is the main reason why my colleagues tabled their amendment. They are afraid that the abuse will be perpetrated further unless there is some guarantee about money. I am not sure whether the Minister's explanation will satisfy them.
Mr. David Myles: I am trying to understand how the hon. Gentleman can suggest that we give food aid when we do not have the wherewithal—surpluses—to give it.
Mr. McElhone: The Minister said that he hopes that much food aid will come from other developing countries.
There are grave doubts about the honesty of some of our European partners, and it is believed that support for food aid programmes is a ploy to get rid of the surpluses of the CAP. That is the view that I have arrived at after talking to many people who are much more knowledgeable than I about the Community.
The two main elements of the Community's food aid programme are a regular food aid programme and an ad hoc programme for disaster relief. I accept the second element. No one could object to food aid devoted to disaster relief, but I have grave doubts and reservations about the first element. I have made the point about surpluses. For any country that needs food aid on a regular basis, the priorities must be a programme of agricultural production, a programme of rural development, a programme of technical training and urgent programmes of water and irrigation schemes. It would not have been out of order, perhaps, for the Minister to have alluded to some of those matters.
Mrs. Peggy Fenner: I find the hon. Gentleman's condemnation of the French leaders of the aid programme rather astonishing. He congratulated Mitterrand, whose special friend, Claude Cheysson, was the Commissioner in charge of overseas aid in the European Community for some years. I am sorry that the

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hon. Gentleman holds such a low opinion of Claude Cheysson. Mitterrand does not. He has appointed him Foreign Minister.
Mr. McElhone: The hon. Lady has missed the point. I talked about rampant French self-interest. I make no apology for having made that point several times in the House. Anyone who has studied the course of the European development fund will see that from 1975 to 1980 the largest part of the funds went to former French colonies. From memory I can name Niger, Mauretania and Senegal as having received the largest slices of European aid.
We are supposed to be equal partners. I believe that British African interests have suffered badly compared with French interests. It is for the Government and the Ministers who represent us in Europe to back our interests. I recognise that it is not in order to quote the text of debates in the other place, but anyone who reads the debate of 3 June will realise that the noble Lords, including the Chairman of the Select Committee, indicated how the issue of food aid had been badly mishandled. They also made a number of other criticisms, to which I hope I shall be able to allude.
Another major reason for using the priorities that I have outlined is that 70 to 80 per cent. of the population in underdeveloped countries live on the land. It is in these areas that the main development policies are needed, yet anyone who studies the operation of the European development fund will see that a relatively small proportion of its budget goes towards rural development. Members of the Select Committee in the other place complained that Ministers are far from assertive enough in the Councils of the Community when discussing aid policy. The House does not have to take my word for that. The criticisms are well documented and made by those who are supporters of the Government.
The efficiency of EEC aid is also a cause for concern. Six months before the end of the Lomé fund, only 64 per cent. of the total had been committed to projects, and only 27 per cent. had been spent. That was a poor performance compared with any other international aid programme. It is a matter that should be mentioned continually in this type of debate. The second Lomé fund started on 1 January of this year.
On a per capita basis, there will be a reduction of 21 per cent. in the European development fund allocations to under-developed countries. That is very worrying, and hon. Members on both sides of the House should shout about it continually, so that when the Prime Minister and the Foreign Secretary meet other Heads of European Governments they will keep getting across the hunger experienced by so many people because of the lack of an effective European development programme.
Advice has been given by me and others on the Labour Benches with considerable experience of the workings of the European Community. I would go so far as to say that we have on the Labour Benches considerable experts in these matters. The Government lack assertiveness and do not complain to the Community about the treatment of non-associated countries, such as India and Bangladesh. What reason can the Government give for aid going where
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it does under the fund, while very poor countries such as India and Bangladesh are almost left out of the programmes?
This is a short debate, and I do not wish to trespass on the time of other hon. Members who are here to make their contributions. The Opposition are far from happy with the conduct of the food aid programme in the past and have no confidence in future programmes. The conduct of the European development fund is a source of deep concern.
How can the Government be taken seriously when they have announced cut after cut in our own aid programme? Over the next two years we are to make a cut of almost 15 per cent. in real terms. That does not give us much strength of argument, because we are the only Western European nation, I understand, to cut aid in this way. Therefore, we do not have much standing when we make points on issues as important as this.
That is why not only the majority of the British people but the vast majority of the people of the Third world hope and pray that we shall have a Labour Government at the earliest opportunity.
10.32 pm
Mr. Teddy Taylor: I should like to ask my right hon. Friend the Minister three questions arising out of his important speech on this minor motion.
First, will he comment on the point so ably made by the hon. Member for Glasgow, Queen's Park (Mr. McElhone)? Why has food aid so far been limited to certain categories, and what is the reason for the extension? If food aid is designed to help people in under-developed countries, it seems strange that the whole emphasis has been on cereals, dry skimmed milk and butteroil, where there have been the biggest and most uncontrollable surpluses. On what criteria will a decision be made to extend the products covered under the new proposal?
Secondly, will my hon. Friend say something about the percentage of aid that is provided at a price and the percentage that is provided free? There is widespread concern about the devastating effect on the poorest countries of the EEC's irresponsible action in dumping certain products on the world market at knock-down prices. For example, some of the West Indiam countries and Mauritius, with about the lowest per capita income in the world, depend largely on sugar. Some of them have had their economies and their people's living standards devastated by EEC dumping.
My hon. Friend will have noted what has happened to the price of sugar and the damage that that is doing. Can he give us an assurance that none of the activities under this food aid programme will have the same results as those of the EEC in dumping food, as has happened with butter and sugar, at knock-down prices, which are devastating the real economies and the real production of some of the poorest countries in the world?
Mr. Marlow: My hon. Friend answered the question that my hon. Friend the Member for Banff (Mr. Myles) asked by saying that one must have surpluses, or else one cannot produce food aid. It is the surpluses that are depressing the developing countries, and thus depressing their food production. Therefore, the amount of aid that is required is greater than it otherwise would be. The point made by my hon. Friend the Member for Banff was the wrong way round.
Mr. Taylor: My hon. Friend has put the matter very clearly. Although food aid appears to the recipients to be real help to real people with real need, the actual use of the surpluses does more damage to those countries than if there were no aid programme.
I am glad to know that some of the funds that are to be retained by the recipient countries under these proposals will be retained for building up food production in their own countries. That is good, but I fear that the disposition of surpluses, because of EEC policies, is destroying the ability of those countries to build up their own industries and, in particular, their food production. There is no better example than the appalling story of sugar, and, to a lesser degree, what has happened to the wealthier countries, such as Australia and New Zealand, as a result of the dumping of butter at subsidised prices.
The problems of food aid were spotlighted in the report of the House of Lords Select Committee, which contained some devastating conclusions. Does the Minister, in whose judgment on these matters we have every confidence, believe that the problems of food aid are being tackled properly in these new proposals? If so, can we expect that they will take up the slack that is being used to provide the appalling and shameful export of subsidised food to the Soviet Union, which is being used to build, prop up and finance its war machine?
I received the information the other day in a written reply that since the invasion of Afghanistan we have exported no less than 149 million litres of wine to Russia, at an average price of 30p per bottle, which is then sold at about four times the cost. That, of course, will help to finance the Russian war machine. The Minister will have seen the figures of food exports to the Soviet Union, published on 8 December. They show that we broke the record on exports to the Soviet Union in every commodity, except butter, where we exported only 80,000 tonnes.
Can we hope that these proposals will lead to an end to the shameful traffic whereby we provide the Soviet Union with vast quantities of food at knock-down prices, which is then sold at very high prices, thus providing the Soviet Union with vast profits and helping to finance the invasion of Afghanistan? The Minister will know that, far from decreasing, these exports are increasing substantially. For example, in 1980—since the invasion of Afghanistan—we have exported 576,000 tonnes of wheat, 217,000 tonnes of barley, and 342,000 of flour. Vast amounts of food are going to prop up a regime that is causing immense problems for the under-developed countries and obliging them to spend far too much money on weaponry and defence.
We should welcome this proposal if, by sorting out the problems arising from food aid, we could reduce—if not put an end to—the sale of surplus food to the Soviet Union at one-third of the price that pensioners in Britain have to pay for it.
10.39 pm
Mr. Nigel Spearing: I beg to move, at the end of the Question, to add
"but considers that aid expenditure on all items of food which are in surplus with in the European Economic Community should be a charge on the costs of the Common Agricultural Policy and not charged against aid funds".
Everybody in the House, whatever his view about the EEC and the way which its deals with its surpluses, is agreed that the food aid programmes to deal with
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emergencies are good and proper programmes. The only question is whether we supply foods other than those in surplus. The Minister mentioned certain food aids. I hope that when emergencies occur it is the policy of the EEC—I know that it is the policy of the British Government—to supply emergency food aid that is best suited to the nature of the population and the disaster that has taken place. The figures and details that we have seen to date make me doubt whether, in emergencies significant quantities of food are supplied other than those in surplus.
There is a question about longer-term matters. We are right to divide the problems into the calculation of cost, the organisation of distribution, the efficiency with which that is carried out and, possibly, the political implications of the supply of the programmes. I want to deal with the question of cost. It is not simply how much is carried by the CAP—the Minister said that that is the cost of export restitution—but the cost that must be carried by what is notionally the aid budget. The Minister said that the cost in terms of the equivalent world price is charged to the aid budget. It has been made clear in various reports, including that of the House of Lords Select Committee, that, while food aid purchased in the EEC at world prices might be a reasonable calculation, there is some doubt whether the food could be sold at that price. In other words, is not that an overpricing to the aid budget?
The EEC audit board, in its most recent report in the official journal, C342 of 31 December 1980, obligingly set out a table showing the relative expenditure. The expenditure for 1979 is summarised at 351 million EUAs for appropriations for export refunds and 287 million EUAs for appropriations for food aid, giving a total of 638 million EUAs. There is not much difference between the amount charged to aid and that charged to the CAP. The Minister said that where food is in surplus only the export restitutions are charged to the CAP, but the table shows little expenditure on food aid that is not in surplus. Other products shown under the heading "token entry, miscellaneous" total 0·59 million EUAs, against a total expenditure of 287 million EUAs for the items in surplus. Unless the Minister claims to the contrary, it appears that there is virtually no food aid other than foods conveniently in surplus.
The motion has some merit. My hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) referred to the passage
"encourage greater reinforcement by the Community's Food Aid programmes of efforts by developing country recipients to improve their own food and agriculture production."
That has been a well-worn theme in many places. I wonder whether the Government motion is worded correctly, because it refers to
"greater reinforcement by the Community's Food Aid programmes".
Perhaps the Minister can tell us where in the food aid programme there is any capital allocation for rural development to enable the countries concerned to increase their own food and agricultural production. I doubt whether there is. I believe that the Minister will say that such programmes come either under the Lomé convention in specific aids or in the European development fund, which is another fund not under food aid, administered in a separate way.
I draw the attention of the House to the fact that the criterion for investment in the European development fund is not by any means the food needs of the countries

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concerned. We have been told in various ways that the criterion of investment in the European development fund is largely a matter of advice from the European Investment Bank. The criterion of that bank is to provide the highest capital return in the country concerned on a completely commercial basis.
If that is so—I do not believe that the Minister can deny it—I suggest to him that the food production with which we are concerned will not necessarily give the highest rate of return in those developing countries. It may give some rate of return, or a good rate return, but I understand that the EIB wants more than that. It wants the maximum rate of commercial return available. If that is so, it appears that there is no means whereby the objectives of the Government's motion can be achieved, because the money cannot come out of the food aid programme, as the money is not for that purpose. That is not always possible under the EDF. It might be in certain circumstances, but perhaps it is not encouraged as much as it might be.
An important report was made by another place on the development aid policy of the EEC. That is the twenty-first report of this Session, House of Lords 146. Three of four pages are devoted to food aid, all of which become worse and worse as one goes on. I shall quote a paragraph, which succinctly says:
"The evidence suggested that for many countries the administration of EEC food aid, whether for development or for emergency relief, is erratic and haphazard, and that there is inadequate evaluation of the effects of the programme. The Committee heard an example of emergency skimmed milk powder, requested to mitigate the effects of a cyclone, which arrived one and a half years after the emergency. Such occurrences can be attributed to some of the major shortcomings of the food aid administration, which may be summarised as: a very small albeit enterprising staff (only nineteen in Directorate-General VIII); almost no overseas Delegations outside the ACP countries to supervise its implementation; insufficient collaboration with the overseas posts of the Member States or with other multilateral agencies; laborious tendering and procurement procedures (see Annex V); an underlying policy objective of responding to requests from as large a number of countries as possible; and the constraints of annual budgeting."
Mr. Keith Best: For the sake of completeness, will the hon. Gentleman also look at page 45 of the report, in paragraph 9, under the heading "Food aid"? It says:
"The Community's food aid programme suffers from inefficiencies in planning, administration and delivery. The suitability for developing countries of some of the programmes (notable dairy foods) is questionable. A management regulation is necessary to encourage multi-annual planning and less haphazard execution and delivery. The United Kingdom Government should press the Council of Ministers to adopt the Commissions' draft management regulation."
Does the hon. Member subscribe to that?
Mr. Spearing: I confess that I have not looked at the paragraph, but it sounds constructive, and an improvement. I do not suggest that the regulation is not an advance, but there is still a long way to go. There is a great deal lacking in the provision of food aid beyond those items in surplus. The Minister has yet to respond to the question.
I referred to the Court of Auditors' report. It, too, contains severe criticisms of what has been happening. Paragraph 9.4 states:
"As a result of criticism of the food aid operations in the past few years, the European Parliament on 18 April 1979 invited the Court of Auditors to prepare a special report on the subject.
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This report, which has now been submitted to the European Parliament, gives a critical account of Community food aid from its inception until 1979, through the various stages of implementation. The present annual report will therefore concentrate upon the utilization of appropriations in 1979 and the findings made, on the basis of records and on-the-spot visits, in respect of the implementation of the 1979 food aid programme.
In general, the management of food aid showed no notable improvement, not the least because the draft regulation to modify the policy and management of this aid, submitted by the Commission in January 1979, is still before the Council."
The regulation is an improvement, and we welcome such improvements, but I hope that the Minister and the Council will consider the other shortcomings mentioned by the Court of Auditors. On page 146 the report states:
"a large part of Community aid is still shipped on vessels which are not registered either in a Member State of the Community or in the State receiving the aid. Nor is the condition of the vessels used subject to any check; a part of the food aid intended for free distribution had to be sold by a recipient country which was unable to marshal the resources needed for free distribution."
The Minister suggests that the amendment would reduce the amount of food aid available, as it would alter the chapter headings. It may reduce the amount notionally credited to aid, but the figures that I quoted earlier should not be credited to aid. If the food was not distributed in aid, it would, in any case, come under export restitution. From what we gather, virtually all the food aid given is in surplus commodities, so it should properly be charged to the CAP. I do not, therefore, believe that my hon. Friends should withdraw the amendment, although I see why, practically, the Government resist it. I believe that we shall have to resolve the matter by having inserted an "Amendment negatived" in the Official Report, as my hon. Friends wish to register their profound concern over moneys ostensibly for one purpose being used for another.
10.59 pm
Mr. Stephen Dorrell: There seems to be a remarkable degree of unanimity in the House tonight that the food aid programme as developed by the European Community over the past 20 years has been wholly unsatisfactory from the point of view of the developing countries and of anyone interested in aid and development. I suspect that that is common ground among the hon. Member for Newham, South (Mr. Spearing), my hon. Friend the Member for Southend, East (Mr. Taylor) and myself.
I wonder, however, whether many of those who have spoken so far have read in detail what the Commission proposes to do to change the basis on which food aid has been given. I welcome very much what I concede at the outset is a small but important step down the long road towards improvement in the quality of the food aid given by the European Community. I think that the hon. Member for Glasgow, Queen's Park (Mr. McElhone) perhaps underestimated the importance of the right hon. Member for Lanark (Dame Judith Hart), as a Minister, seeking to push the Community down that road and recognising that food aid is a matter not of disposing of agricultural surpluses, but of undertaking something that is relevant in the context of the developing world.
Mr. McElhone: Just for the record, I have more than once paid tribute to my right hon. Friend the Member for Lanark (Dame Judith Hart) for her sterling work, particularly in the Community, and I had hoped that that would be understood by the hon. Gentleman.
Mr. Dorrell: My point was that the right hon. Lady had a perceptible impact in persuading the European Community of the error of its ways. The reports before us tonight are evidence that the Community is beginning to respond to the pressure that British Governments of both parties have been keen to exert upon it.
The Commission's report makes two important points. First, it states that any assistance in the form of food aid must be relevant to the conditions of the recipient in the developing world. Secondly, it uses the dreadful word "multiannual" which I have never seen other than in a European Community document. I assume that that relates to long-term planning, which the Commission has recently been allowed to adopt by the Council of Ministers, and which I very much welcome.
I welcome also the fact that the Commission is now seeking powers to build up stocks of food aid as a kind of buffer against the unforeseen. It is worth reminding those who have stressed the importance of building up stocks to deal with emergency short-term food deficits of the fact that in a country such as Bangladesh such deficits appear almost annually and are not in any real sense emergencies, but are part of regular contingency planning which regularly comes into use.
Mr. Best: Does my hon. Friend agree that the multiannual aspect of this is a welcome but belated acknowledgement of the statement on page 102 of the Brandt report that
"Continuity of food aid, as with any other type of aid, is critical"
and that that is exactly what we should seek to achieve?
Mr. Dorrell: Certainly it is a response to what the Brandt report asked for, and also something that British Governments of both parties have pressed for over a long period. I therefore cannot understand why Labour Members do not welcome that development as wholly positive.
Certain points should also be drawn from later parts of the document. I welcome the Commission's statement that food aid should not be given except in the context of what it calls a "national food strategy". It is recognised on both sides that an emergency response to a food surplus in Europe is not a sufficient basis for giving food aid. It must be part of a national food strategy.
To take up another point made by the hon. Member for Queen's Park, the Community has been giving food aid in the context of a national food strategy to the Indians under the flood scheme and has also indicated a willingness to do so to the Bangladeshis. Bangladesh is mentioned in a footnote as being one of the countries that have adopted a national food strategy. That is one of the safeguards included in the document as a criterion to judge whether a particular food aid project should be recognised by the European Community.
The Commission also says that the Community is keen that food aid should be given by it as part of an integrated development programme at the European end, so that not only must there be a national food programme in the developing country, but there must be an integrated development programme as part of the guidelines for the giving of food aid from the donor country end. Those are precisely the kinds of safeguards that we should look for in the giving of food aid.
I should like briefly to mention some of my concerns about food aid as a way of assisting developing countries,
828
because I share the unease that has been expressed on each side of the House about the consequences of dumping food at concessionary prices and undermining the profitability of agriculture within the developing world. That seems to me to be doing a great disservice to the developing countries, and perhaps salving our consciences at their expense.
There are three methods that are highlighted within the document as being the main methods of giving food aid. The first two methods are counterpart funds, that is to say, giving aid to a developing country's Government which they then sell on to their own country, or, alternatively, paying for work or people hired within the developing country in terms fo the food that they eat. Both methods are dangerous, not only because of the impact they have on agriculture within that developing country, but because of the impact on agriculture within the other supplying developing countries. We have to look not only at the local agriculture, but at the whole supplier-customer relationship within the developing world.
There is a third method which, superficially, might seem to be more attractive. The hon. Member for Waltham Forest (Mr. Deakins) and I recently visited a project in India. It was made clear to us that it was an unattractive way of giving aid. It is what the Commission calls direct action—seeking to take out a section of the community and saying that those people would specially benefit from extra nutrition. Perhaps there can be no better class of persons that might be held to benefit in that way than the mother and the new-born child.
It was as members of the population group that the hon. Member and I went to a project in India where food aid had been given to mothers and new-born children to try to improve the nutritional standard of the new family. It was established that it did not work, for the apparently very simple reason the the mother took the food aid to the market and sold it. It was the most inefficient possible way of giving aid to the people who in the end really needed it. Large sums of money were spent. Someone was paid to monitor the results, and they were shown to be unsuccessful. I hope that the Commission will take note of that kind of experience in assessing future food aid programmes.
All this is simply an illustration of what must now be a very well-worn truth—that the best way of improving someone's standard of living is to give him cash and not to seek to pay him in kind. Whether the recipient is a developing country or an individual, it leaves the opportunity to the recipient to buy the things felt to be of most value.
Mr. Myles: rose—
Mr. Dorrell: I hope that my hon. Friend will forgive me if I do not give way. I have already given way twice, and I know that other hon. Members wish to speak.
If cash is what is important, surely the best kind of food aid is what the Commission calls the triangular deal—a system by which the Commission buys food from a developing country on behalf of other developing countries that need it. That is the kind of assistance that gives real help to people in real need and boosts the development potential of the countries that we are seeking to boost.
Mr. Deputy Speaker (Mr. Ernest Armstrong): There are 26 minutes left for debate, so I hope that those hon. Members who are called will be particularly brief.
11.5 pm
Mr. Eric Deakins: I endorse the argument of my hon. Friend the Member for Newham, South (Mr. Spearing) on the Community's financing of food aid. I shall address myself to the narrow budgetary context of food aid in the Community scheme of finance.
There was a proposal in 1978 and 1979, when the regulations were in gestation, that food aid should be treated more properly as the receptacle for the money that was spent to help developing countries by the disposal of surpluses in the EEC. It seems that that proposal has survived, because the Minister said that as long as we remain a member of the EEC we should switch the emphasis from the disposal of surpluses as part of the CAP to food aid as part of the development budget. In one sense no one could quarrel with that view of how the Community should develop.
Although steps were being taken in 1978 and 1979 to change the budgetary arrangements, according to the Minister's updated explanatory memorandum of 5 June, which is No. 4313–79,
"the earlier proposals for changing budgetary presentation on food aid have been dropped."
It is not clear why they have been dropped, but on the whole I welcome the fact that it has happened. Had the original proposals gone forward there would have been a transfer from the CAP title of the budget to the food aid title. As my hon. Friend the Member for Newham, South said, that would have presented a distorted view to the rest of the world, including the citizens of the EEC, of the actual costs of financing food aid. It would also have taken moneys away from the cost of the CAP and credited them to food aid. That would have meant that the aid and development budget of the Community would have been that much larger and the CAP would have been that much smaller. From a public relations point of view the Community would have killed two birds with one stone. It would have reduced the ostensible cost of the CAP and increased the development budget, which no one in his right mind would want to oppose. What a wonderful example of sleight of hand that would have been. I am glad that it is not taking place. To prevent that happening was one of the purposes of the addendum that was tabled by my right hon. and hon. Friends and myself.
It is clear that 99·9 per cent. of the Community's food aid consists of surplus products and that there would be a cost even if it did not leave the EEC as food aid. I shall not comment on the suitability of the products as food aid. Cereals are obviously very good. Butter is less good, but butteroil and perhaps butterfat can be of assistance from time to time in emergencies. However, if we ever get the CAP in order—I doubt whether that is possible, but that is the aim of Government policy as long as we remain in the Community—we shall have a policy that means that few surpluses are produced. On that basis the Community's food aid programme will decline substantially. That may be said to be a hypothetical issue, but it is the objective of Government policy to get the CAP in order.
If the Government succeed in that objective of reforming the CAP and preventing any further surpluses arising, it will have an impact on the Community's food
830
aid. The Community will have to dig into its budgetary pocket under the development aid heading and start buying food on the world markets at cheaper prices to finance its development budget. That may be no bad thing, but it will increase the net cost to the Community quite substantially.
Although the Minister and the explanatory memorandum have set some of our minds at rest, there are some warnings to be heeded for the future. In spite of the rigmarole that we have heard about the Community moving in a new direction, it still regards food aid as the disposal of surplus products. If those products disappear, which I very much doubt, the food aid will disappear.
11.10 pm
Mr. David Myles: I shall try to be brief, but the House should congratulate my right hon. Friend on becoming a Privy Councillor. Perhaps that will make him more assertive, as the hon. Member for Glasgow, Queen's Park (Mr. McElhone) suggested.
The greatest advocate that the world's hungry have ever had lived near to my home, in the shape of Lord Boyd Orr of Brechin Mearns. Lord Boyd On said that the hungry are crying out for bread and we give them pamphlets. I hope that we are not giving them documents. Lord Boyd Orr also protested that he had no difficulty in persuading farmers of the virtues of nutrition, because they could prove with their stocks that it paid dividends, but he could not convince anyone that the same was true of children. He could have added that when animals are suffering from malnutrition they cease to conceive. Unfortunately, the same is not true of humans.
Lord Boyd Orr was a critic of the marketing boards, as they were organising shortages—a criticism that may be levelled at the Potato Marketing Board but could not be levelled at the Milk Marketing Board, or at the CAP. He saw the danger to that organisation of the shortages that seem to be such a popular concept in the debate.
It is to the great credit of the National Farmers Union that it has never advocated scarcity, although there is no doubt that if those surpluses in Western Europe had never been produced the farming industry would have been much better off.
I welcome the Community documents as being sensible in pointing the way to coping with two Community problems. First, they demonstrate the value of the CAP, lest we should throw the baby out with the bath water before we have conceived a better alternative. Secondly, they suggest ways of partially implementating the recommendations in the Brandt report.
Mr. Marlow: Will my hon. Friend give way?
Mr. Myles: No. My hon. Friend has been bobbing up and down like a jack-in-the-box all night.
Having regard to the Treaty establishing the European Economic Community, articles 43, 209 and 235 thereof and the opinion of the Court of Auditors, it is right that we should recognise that food aid should be made a real instrument of the Community's policy of co-operation with developing countries. Food aid appropriations should be presented in the budget consistent with the nature of the operation's finance and should meet the need for greater budgetary transparency and better management of that aid. It should be recognised especially by those who continually complain about the cost of the CAP, that about

831
36 per cent. of export restitutions on food products goes to Third world countries, and amounts to almost 50 per cent. of the CAP budget.
The intervention stores are valuable to cope with the necessity underlined in the documents for a ready supply of food to meet sudden emergencies. The main items needed are those in surplus—that is, cereals, dried skimmed milk powder and butteroil. To those I add sugar. Surely there is nothing immoral in keeping a reserve of that high-calorie product when it can help the sugar cane producing countries and our sugar beet producers, and calorie deficiency is the greatest immediate problem.
As has been said already, we must be careful that we do not inhibit the incentive to produce food in recipient countries. It cannot be morally justifiable for us or the Community to use that as an instrument to make those countries more dependent on us and, therefore, beholden to our political point of view, but we should recognise that that could be a valuable spin-off.
11.15 pm
Mr. Frank Hooley: In discussing food aid it is appropriate to consider the world food situation. Last year wheat stocks fell for the second consecutive year, and global reserves of wheat are half what they were two years ago. The consequence will be a rise in prices on world markets, which will be serious for Third world countries, which buy 50 per cent. of the 90 million tonnes of wheat traded in world markets. African countries alone spend £2 billion a year on wheat and import 13 million tonnes a year.
The World Bank has predicted that the Third world deficit may be 77 million tonnes by 1985, and the International Food Policy Research Institute has put the deficit at 100 million tonnes or higher. It has been calculated that the number of undernourished people in the world could double to 1,000 million within the next decade.
I welcome the fact that the Minister has said that the objective of the food aid management scheme is to move away from the disposal of surpluses to development policies for food. He said that it is designed to help developing countries with balance of payments problems and to see that they build up sensible stocks for food security programmes. Those are admirable aims, but there are other means of achieving them that are far better in terms of expenditure of money and effort than the Community's scheme, which is basically a means of disposing of 3urplus production.
My hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) was right when he said that if the surplus declined because of the reform of the CAP, which does not look likely, the food aid would disappear. We are talking about making the food surpluses look respectable by giving them a purpose that can be passed off to the world as respectable.
A more sensible and constructive policy was outlined by the Minister in a speech to the World Food Council last month. He said:
"In these last days, the Interim Committee of the IMF has agreed important new changes to its Compensatory Financing Facility. These will provide much-needed help to those countries whose own harvests fail unexpectedly, or who find that world prices have suddenly risen, putting normal imports beyond their grasp…this help will involve only light conditionality."
832
That is a far more constructive line of policy, which I hope that the EEC will support, than simply dumping food surpluses.
The right hon. Gentleman went on to say that
"we want to see food aid used much more effectively. Apart from relief and emergency assistance, food aid is still searching for a specially effective role in development."
The documents seem to suggest that it has already found such a role.
The Minister added:
"Many in Britain—including Parliamentary Committees—are questioning the usefulness of providing such help, either as short-term payments support, or in traditional project form. Such aid must more directly reinforce the whole agricultural and food production policies of its recipients."
I see no evidence in the documents that the EEC policy of food aid will achieve that.
I refer next to the sixth point made by the Minister in that speech. The right hon. Gentleman, talking about the International Fund for Agricultural Development, said:
"We also hope all countries will now confirm the pledges they have already made towards the equitable replenishment of the International Fund for Agricultural Development, so that it continues its lending."
A compensatory financing fund from the IMF, an examination of whether food aid is relevant to development at all, and the strengthening and enhancing of the resources of the IFAD amount to a coherent and constructive policy. I am glad that the Minister has put forward such a sensible policy and has supported it at the World Food Council. However, these regulations on food aid management are, at bottom, another way of covering up the appalling deficiencies of the common agricultural policy, and I believe that the amendment in the name of my hon. Friend the Member for Newham, South (Mr. Spearing) is justified.
11.21 pm
Mr. Keith Best: I must be brief, as my right hon. Friend wishes to have five minutes in which to reply to the debate. In the time available one cannot articulate all the matters raised in the documents. Like most hon. Members who have spoken, I welcome what I believe to be a fundamental reappraisal of the EEC's food aid policy. It is a reappraisal that moves in the right direction. Even those of us labelled Euro-fanatics by hon. Members—including some of my hon. Friends who do not necessarily believe the arguments that we put—would not pretend that what we are discussing is the right answer. It is not. It is, however, a move in the right direction.
My hon. Friend the Member for Loughborough (Mr. Dorrell) referred to the multiannual aspect. That is what Brandt was arguing. It is what we should be seeking in developing continuity of aid. One of the most damaging aspects of aid in the past has been its ad hoc nature. Developing countries have not been able to rely on the degree of continuity that is necessary. I wish to restrict my remarks to considering whether the concept of aid is better achieved through the agency of the EEC or through bilateral agreements. At present, 72 per cent. of this nation's aid is handled through bilateral agreements, while only 12 per cent.—equivalent to £107 million—goes towards EEC side.
Much can be argued in favour of directing aid through the EEC. Two aspects were raised in the debate in the other place on 3 June. There is less of a colonial aspect to aid if it is developed on a Community basis rather than on a national basis. There is also more chance of a degree of

833
continuity if aid is directed through the EEC, with all nations agreeing, rather than if it is provided by national Governments on an ad hoc basis, under which the emphasis on food aid can change from year to year, depending upon the vagaries of a nation's own economic situation.
I congratulate my right hon. Friend on his elevation. I hope that he will endeavour to persuade the Government to direct more of the food aid programme through the EEC rather than to purchase bilateral agreements. Such agreements can be extremely dangerous, for the reasons that I have mentioned. If we can achieve a degree of consensus throughout the EEC for providing a continuity of aid to developing countries it will assist the countries concerned. They will know that it is the European Community that is assisting them, rather than nation States for their own private ends.
11.24 pm
Mr. Christopher Brocklebank-Fowler: First, I add the congratulations of the Social Democrats to those that have been offered to the Minister. I am sorry that his elevation has coincided with the spending of the lowest proportion of the GNP on development assistance for 10 years. I congratulate him warmly, nevertheless.
I share the widespread concern and reserve about the usefulness of food aid to development. I do not want to rehearse the arguments too widely: I simply agree with the major points made by the hon. Member for Loughborough (Mr. Dorrell)—[Interruption] The hon. Member for Plymouth, Sutton (Mr. Clark) does not need food aid. He has been out of the Chamber for an hour and 18 minutes. He could do the House the courtesy of being quiet when he returns.
I agree with the hon. Member for Loughborough. The Government's proposal, set out in the explanatory memorandum, does not convince me at all. Much of the food that goes to developing countries undermines their efforts to become self-sufficient in food production.
I am particularly sceptical of the proposal that the ranges of Community food aid products should be extended as proposed. I am nervous about the suggestion that sugar and oil should be added to the list of food aid commodities, because they will be derived from surpluses in Europe. Although I welcome the Minister's assurance that funds should be made available to buy those products from Third world sources, he must carefully watch the French efforts to increase their sugar acreage and dispose of their surpluses in food aid, while making no contributiion to the development of agriculture or the improvement of the standard of living in many of the poorest developing countries.
11.27 pm
Mr. Neil Marten: I take the last point of the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler), but, as time is very short, I will not follow him further.
This has been, as the usual saying goes, a wide-ranging debate—rather too wide, in fact, in that many of the points raised, interesting though they are, are not relevant to these documents.
834
For me it is a nostalgic occasion to be in the "hot seat" and not on the Back Benches in a debate on Community documents, but I shall obviously have to reply to many of the points in due course.
One general point that has been raised is that emphasis on agricultural development is one of the main objectives of our aid programme, so that the developing countries can feed themselves as soon as possible. Also, much depends on the developing country itself—for example, in fixing a "right price" for the farmers.
As I have said before in the House, if one's price is sufficiently high, farmers—given the sun of Africa, and so on, and provided there is water—will produce. The high prices in the Common Market, after all, have produced the great surpluses of which many hon. Members have spoken. I have often said to the leaders of the developing countries that if they raised their farm prices they would get much more food production and could then help themselves much more than they do.
Mr. Marlow: rose—
Mr. Marten: In an intervention, my hon. Friend the Member for Northampton, North (Mr. Marlow) asked about conciliation. I gave him an answer that was partly correct but not completely so. The form is this: if the Assembly and the Council cannot agree within a period of conciliation—usually three months—the regulation will take direct effect as originally adopted. However, the aim of conciliation is precisely to see whether differing views can be met.
The hon. Member for Glasgow, Queen's Park (Mr. McElhone) complained that the EDF gives too much to ex-French colonies. The division of the EDF by the Commission was not due to some French plot. To allay disquiet among the 19 Yaoundé associates, including Mauritius, about the position of their special relationship—
It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Questions necessary for the disposal of the proceedings, pursuant to Standing Order No. 3 (Exempted Business).
Question, That the amendment be made, put accordingly and negatived.
Main Question put and agreed to.
Resolved,
That this House takes note of European Community Documents Nos. 4318/79 (amended Commission proposal for a Regulation on Food Aid Management) and 9175/80 (draft Resolution on the use of Community food aid and draft Regulation laying down general rules for the supply of products other than cereals, skimmed milk powder or butteroil to certain developing countries and specialised bodies) and of the updated explanatory memoranda of 5 June; and endorses the Government's intention to work for the early adoption of a Regulation on Food Aid Management, on the lines set out in the explanatory memoranda, and urgently to encourage greater reinforcement by the Community's Food Aid programmes of efforts by developing country recipients to improve their own food and agriculture production.
Mr. Deputy Speaker: I am grateful for the self-restraint shown by so many right hon. and hon. Members in a short debate.

STATUTORY INSTRUMENTS, &c.,
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

TERMS AND CONDITIONS OF EMPLOYMENT
That the draft Job Release Act 1977 (Continuation) Order 1981, which was laid before this House on 12 May, be approved.—[Mr. Wakeham.]
Question agreed to.

Japanese Imports
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham.]
11.30 pm
Mr. Anthony Beaumont-Dark: I am grateful for the opportunity to have this debate and I make no apology for raising at this late hour the problem of Japanese import penetration of this country. Indeed, the fact that the hour is late may be opportune, because many people in British industry feel that the problem that faces our industry from Japanese imports is itself late of solution.
This country has, as I recognise, built itself upon a free-trade concept, and it would be anathema to me and to many other people if we went in for wholesale protectionism, but there comes a time, with certain situations, when to take action is common sense, particularly when one has struggled year after year to come to a solution, as one has with the Japanese, but to almost no avail.
The United Kingdom's trade deficit with Japan has grown from £278 million in 1975 to £1,100 million in 1980, and for 1981, if the figures turn out as they look to be now, it is likely to be £1,400 million. The deficit of the EEC as a whole with Japan is likely to be well in excess of £5,000 million. Over the same period, the import-export ratio has declined from 51 to 38 per cent. This situation shows no semblance of stability or change, and 58 per cent. of Japanese imports are in three product areas—vehicles, consumer electronics and electronic engineering.
I do not always agree with the CBI, but I agree when it says:
"With 2·5 million unemployed, Britain's biggest worry is the danger of losing more jobs. The immediate threat to employment in manufacturing industry is serious enough, but the longer-term threat is to the very survival of some essential parts of our industrial base."
I realise that the Government are talking, have talked long and hard, and have had some success in trying to limit the damage that Japanese imports are doing, particularly to our car industry, but still, after all this talk, the deficit grows. It has risen 500 per cent. in six years.
We have had five years of, on the whole, futile talks and mainly empty promises; talks which finally broke down when hopes of an amicable settlement between the EEC and Japan were dashed. The time is surely opportune to take action. The Japanese Prime Minister is in Europe this very day. He does not want to talk about trade, and I do not blame him. The Foreign Ministers meet on 22 June, the Prime Ministers meet in Luxembourg on 29 June, and a Western economic summit is to be held in Ottawa in July.
The people who wish to see action taken cannot be accused of being backwoodsmen, which is the accusation always made by the critics of any kind of import control. Sir Terence Beckett, who helped to build Ford into a great indigenous motor manufacturing company, cannot be called a backwoodsman. Tube Investments, Guest Keen and Nettlefolds and Lucas Industries are not backwoodsmen. They are all companies that see the danger and the need for action.
After five years of gentle persuasion, which has led almost nowhere, we should tell the Japanese, who respect strength and little else, that the time has come for them to

837
brace themselves for direct action. They will talk and they will bow, and still carry on inexorably taking over—as Beckett put it with laser-beam clarity—the industrial prosperity of the Western world. If they will not act and do it nicely, we should do it by direct action.
We should challenge the Japanese policy through the GATT as well, under articles VIII, X and XXIII, all of which clearly cover the problems that we face with Japan. We should do it if we can jointly with the EEC. If we cannot, we should do it on our own. We should with vigour and bluntness press Japan for the elimination of tariff and non-tariff barriers.
We should push the Japanese Government into taking a real interest in seeing that they purchase more foreign goods for public sector industries, about which they can do something. It is easy for the Japanese to wring their hands, saying that they can do nothing, while their industrialists attempt to wring our industries' necks. We should tell them that if they will not agree to open their home markets—and they are not open—we shall set quotas so that a balance comes about.
The Japanese must be told that the continuing imbalance, which is bringing us to a £1,400 million deficit, cannot continue and will not be allowed to. If we go on year after year talking, the Japanese will be content and happy that we should do so, and still the deficit will grow.
There is one thing that we can do. We should immediately ban exclusive franchises, which the Japanese exploit to the point of scandal. This would at least do something to help our hard-pressed components industry in the Midlands.
Of course, the restraint of trade is not to this country's overall benefit. I am sure that my hon. Friend will tell me that we export twice as much as the Japanese, or will make similar statements. Of course, "Rab" Butler was right when he said years ago that this country had to export or die, and that is as true today as it was then.
I do not suggest that we should intervene where we have real free trade markets and genuine trade. All trade needs real freedom and a real balance to flourish. With the Japanese, it is neither real freedom nor a real balance. The Japanese have various conditions that are peculiar to their market, and it is not just I who says that.
An organisation in Europe, the Orgalime, rightly quotes many restrictions that exist in the Japanese market: whether it is their distribution network, which is linked to producers, where nearly 90 per cent. of the electronics goods markets tends to make it a captive market; whether it is the standardisation of Japanese products, which leads to economies of scale unrivalled in Europe; whether it is technical regulations, such as the Japanese electrical appliance law, which constitute barriers to standardisation and certification and which bolster the protection of the market almost to a cartel; whether it is the structure of Japanese groups and the links that they have, where they can virtually control and often select their own imports; whether it is in investment, where it is virtually impossible for countries to take over investments, but they can take over others; whether it is the liaison and the administration that exists between firms and their trade associations; whether it is the cartel links or monopoly situations that exist, which under our regulations in Europe and the United Kingdom would be a cartel; whether it is the
838
practice of high price public purchasing, which enables firms to increase their export competivity; or whether it is—as so often happens—that the Japanese, when it suits them, can say "You are free to compete", but where no freedom exists.
Sir Terence Beckett talked of the single laser beam destruction of some of our industries. He is right. What about the motor cycle industry? It is not, as people like to say, just because of bad British workmanship or lame dogs. It is television tubes in the United Kingdom, electronics in the United States, and photography and optics in Germany. Today, the threat is motor cars, lorries and vans. Of course we must become more efficient—and I believe that we are doing so. It is a painful process, particularly to the unemployed, but it is necessary. Every one accepts that.
We must remember that Japan has grown by protection, and is helped now by protection, most of it by subtle means. Unless we do something urgently, we as a Government will preside over the unnecessary and disastrous growth in unemployment in the United Kingdom and Europe which we can avoid if we wish. The Japanese are planning to produce 14 million vehicles by 1985, when they have a home market of only 3 million. Are we to do nothing and stand in the midst of ruins and say "We kept faith with our principles, at the expense of our people's jobs"? I am not prepared to do that.
I deal, finally, with the Nissan deal, which was heralded as a great golden calf. If we are not careful, it will be no such thing. It will be a Trojan horse. The Economist last week wrote:
"The last thing Europe needs today is shadow factories that merely bolt together bits shipped from Japan. That would create only token jobs, and little value and damage local component suppliers."
The Ford Motor Company had the courage to come here and build cars, and it says that up to 50,000 jobs could be lost if Nissan is allowed to set up a assembly plant without the strictest conditions. In my view, those conditions should be 80 per cent. at least by weight, not by value, where they can fiddle things, as they so like to do. We should impose the strictest conditions. As Mr. Troy of Ford—who has done more for Britain than any Japanese—said, if he was in the component industry he would be terrified.
We have it in our power to ensure that that fear is unfounded, but not by taking another five years. British industry and jobs do not have the time. The need is for action this day. If the Government act wisely and with firmness the disaster can be avoided and they will gain many friends. Speaking up for Britain is a traditional Conservative stance. It was never more needed than now if the industry of Britain is to have a chance to recover—and nowhere more so than in my native city of Birmingham. It looks anxiously, and I am sure not in vain, to the Government to act in Britain's interest, as the Japanese have always acted in their interest.
11.45 pm
The Under-Secretary of State for Industry (Mr. John MacGregor): I am grateful to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) for providing an opportunity to debate this extremely important subject and for enabling me, however briefly, to set out some aspects of the Government's

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position. As he indicated, the consideration of this subject is very timely with the visit of Prime Minister Suzuki this week.
I know that my hon. Friend has visited and been involved with Japan. I should mention that I was a member of a parliamentary group that visited Japan last October. It gave me the opportunity to open my eyes and see a little for myself at first hand. It also gave me the opportunity, with parliamentary colleagues on both sides of the House, to put direct to members of the Japanese Government and the Keidanren the dangers inherent for them in overplaying their trade hand.
I want to begin with a few general remarks to set the context. First, the anxiety about the Community's and Britain's increasing trade deficit with Japan is well founded. My hon. Friend gave figures. The deficit of the Community as a whole with Japan increased from £1,500 million in 1975 to more than £4,000 million in 1980. There has been a further worsening of 46 per cent. from January to April of this year, compared with the same period last year. In the case of Britain—although my figures are slightly different—the deficit with Japan increased from £390 million in 1975 to £1,100 million in 1980. We must put the matter in perspective and remind ourselves that Britain's balance of payments surplus for the first two months of this year, whatever may happen during the remainder of the period, sets that rather in the shade.
We cannot look—and I am sure that my hon. Friend does not look—for a complete balance of trade with Japan, or with any other country. It is true that the United Kingdom has considerable net surpluses with countries, but the scale of imbalance in recent years is threatening the trading system, and that is not in Japan's interest, or anyone else's.
The other major factor is that the rapid increase in Japanese exports is concentrated on specific sectors of industry and not spread across the board. Japan still exports only some 12 per cent. of its GDP compared with Britain's 29 per cent. That is a salutary reminder to us that in an overall trade protection war we would be the losers. Put in another way, Japanese goods still amount to only 3 per cent. of total British imports.
We need to dispel the myth that Japan is unmatchable as a competitor. Overall, it does not have a dominant position. Moreover, in many sectors Japanese industry has no competitive edge. Indeed, the United Kingdom has a positive trade balance with Japan in a number of areas. In sectors such as the car industry, where Japanese imports are high, Britain imports substantially from other industrial countries also. Those facts set the perspective.
However, those remarks mask the fact that Japanese industry has been especially successful in concentrating on certain industrial sectors. I repeat what my hon. Friend mentioned about the director general of the CBI referring in a speech to Japan's laser beam approach. We have seen it in motor cycles and are now seeing it elsewhere, not least in machine tools and microelectronics, where it is making large investments in research and development in industries that are becoming increasingly important to our economic base. They are the industries of the future.
We must agree that Japan's productive efficiency has made Japanese goods relatively cheap and extremely reliable. That benefits consumers directly and provides a stimulus to our industries. However, experience has shown that if Japanese industry—building up often from an originally protected base itself—is allowed free rein
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with that total blanket approach, entire sectors of European industry can be put at risk—motor cycles being the most obvious example. I think it only fair to add that Japan's success in these sectors is due largely to its doing, very effectively, things that industry in all countries sets out to do.
I am sure that my hon. Friend will agree—he has already said so—that much of what we have seen in terms of Japanese competition underlines the general need to increase the competitiveness of United Kingdom industry. I know that he accepts that blanket protectionism is self-defeating, apart from the fact that it conflicts with our international obligations and with our strong United Kingdom interests in the maintenance of an open trading system. That is not to say, of course, that action should not be taken in sensitive areas to monitor and restrain imports and, as my hon. Friend will know, current bilateral inter-industry arrangements cover about one-quarter of United Kingdom imports from Japan, most notably in vehicles and television sets.
That brings me directly to the motor industry. My hon. Friend referred to it particularly. The Government share the concern that he voiced. Japanese penetration not only of our cars market but of our market for light commercial vehicles remains high. In view of the recently concluded United States/Japanese agreement on restraint of car exports, the Government recognise the fear that that sensitive sector of the European market may be further penetrated by Japanese products.
It is because we recognise the very real problems that this may cause for our manufacturers, at a time when the market is already depressed, that the Government have given their full support to the EEC's attempts to secure from the Japanese a restraint agreement along the lines of the United States agreement, but we have made it crystal clear that any agreement that the EEC can secure with the Japanese must be at least as effective as the present understanding that exists between the SMMT and JAMA.
Just how effective that understanding has been is frequently overlooked by those who are quick to cast us in the role of an easy target. Since the SMMT and JAMA started talking in 1975, Japanese cars have taken a pretty stable share of the United Kingdom market—between 9 per cent. and 11 per cent., but rising exceptionally in 1980. That was at a time when Japanese penetration of the United States market rose to 20 per cent. The SMMT/JAMA understanding is still in force, and we must look to this to continue its restraining role.
Mr. Tanaka, the Minister for MITI, in Japan, has been told this week that we expect the Japanese to hold their market share of cars in the United Kingdom this year below last year's.
Whatever the outcome of the EEC discussions with Japan on cars, and whatever the outcome of the forthcoming Ottawa summit, we have to face the fact that Japanese competition will not simply go away, not least in third markets. We cannot expect to create a wall behind which we can permanently hide from the facts of economic life.
We must, as a nation, adapt to the challenge posed by Japan—and the Government are greatly encouraged by the way in which the United Kingdom, some would say rather late—is rising to that challenge. British Leyland, in particular, has responded well this year in increasing its market share. It is also to be congratulated on taking the initiative in pursuing collaboration with the Japanese

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industry rather than joining the ranks of the moaning Minnies. It is through activities like BL's collaboration with Honda on the production of the Triumph Acclaim that we will combine the best of Japanese with the best of British. An excellent, independent car company in my constituency—Lotus Cars—has in the past week completed an agreement with Toyota, which underlines the importance of the exhange of technology.
It is because the Government believe that this is the way forward that we have given a warm welcome to the Nissan company's proposal to produce 200,000 cars in the United Kingdom from 1984. When my right hon. Friend the Minister of State announced our welcome—in principle—to the Nissan company in January of this year, he also announced that the company was proposing to source between 60 per cent. and 80 per cent. of its requirements locally. Since the announcement, the Nissan company has made an extensive feasibility study of the United Kingdom as a location, in the course of which it has made many contacts with United Kingdom companies.
I know that some firms in the components industry are concerned about possible Japanese competition if Nissan locates here. To those and to others who have expressed doubts about the value to the United Kingdom of the Nissan project I say this: the Government are aware of the worries. We believe it right that in our discussions Nissan agreed that it will aim to reach 80 per cent. local content as soon as possible, if it decides to come here. However, it is up to those in the industry to do what we believe they can do—demonstrate to Nissan and to other vehicle assemblers that they are capable of producing a fully competitive product. If that is done we can meet the challenge of Japanese imports.
Had time permitted I should have said more about the machine tool industry—in which I take a particular interest—and Japan. However, I hope that I have said enough to show that the Government fully appreciate the importance, in current circumstances, of existing restraint on imports in sensitive areas. We are determined to put across to Japanese Ministers the fact that existing Japanese trading strategies—in particular, concentration on specific industries— are causing great strain. With our EEC partners, we are looking closely at the results of the EEC call for action on the trade imbalance, which is a matter of legitimate concern to all developed countries and which will be raised at the Ottawa summit as a necessary part of the review of world trade.
I turn now to two other points. The first is the opening of Japan's home market, to which my hon. Friend referred. Of course, we recognise that the impetus for that efficiency and drive in many Japanese industries comes from Japan's internal problems, in particular its heavy reliance on imports for energy and raw materials. We understand the Japanese need to export high added value products to pay for those needs. However, we must rightly ask Japan, in its determined and concentrated drive to solve its problem, not to create impossible problems for other nations through the destruction of vital industries and the creation of heavy unemployment.
Now that Japan is a most successful industrial nation, which has built up its industries again, initially and not
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least through protective trade barriers, its tariff and non-tariff barriers cannot remain as they are. It must take more active note of the complaint that so often it has an impenetrable domestic market. In short, there must be fair play. That is why it is important that the Japanese should show more determination to open up their market to imports and to remove tariff and non-tariff barriers.
I recognise, too, that there are cultural differences in Japan, and other countries, although not in Britain, which cause them to seek naturally to buy their own products. Clearly, there are limits to what can be done about such barriers, but there are the other barriers to which my hon. Friend drew attention, and the Government are actively looking for ways through EEC and bilateral contacts to promote United Kingdom exports to Japan and impress on the Japanese Government the need for determined action to encourage imports. My hon. Friend will no doubt have seen the references in the successive statements of the Foreign Affairs Council of the EEC from November 1980 to May this year, which have our strong backing. We have played a prominent role in forming the initiatives.
I refer briefly to the importance of joint ventures and technology exchange. I am sure that my hon. Friend would agree that the encouragement of Japanese inward investment in the United Kingdom in appropriate areas is a means of strengthening our own economy and reducing imports. Japan built its industrial strength by learning the technology from others, and there are some sectoral areas today in which we can benefit from Japan's new technological advances, as well as, sometimes, from its production and management techniques. However, it is important that it is a two-way process. The Department of Industry is actively promoting the benefits to the United Kingdom of importing technology from Japan by means of joint ventures and other forms of technological collaboration. Industry, too, is increasingly active in that field. In the machine tool industry, for example, several major United Kingdom companies have entered into collaborative agreements.
An important initiative to strengthen United Kingdom industry in high technology areas was the agreement on industrial collaboration reached by the Minister of State with the Japanese Minister of International Trade and Industry in April. The Government are actively preparing, in close consultation with industry, for the follow-up to that. The first joint meeting between MITI and the Department will take place in early September. The Department also intends to sponsor two major studies of technology in Japan on information technology and on the application of electronics to manufacturing processes. It has just gone out to tender on both.
I am sure that my hon. Friend will agree that, just as we have to have regard to the need to protect our sensitive areas in the way that I have described, so, too, it is of great importance to our industry that we benefit from joint ventures and technological collaboration. I hope that the initiative that the Minister of State took in April will lead to many other developments.
I hope that I have said enough to demonstrate to my hon. Friend that the Government are conscious of the problems, and also to show the very much wider context in which relations with Japan must be considered.
Question put and agreed to.
Adjourned accordingly at Twelve midnight.