North-West Region

HC Deb 15 June 1981 vol 6 cc735-814

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

3.51 pm

Mr. James A. Dunn (Liverpool, Kirkdale)

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 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 (Bebington and Ellesmere Port)

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 (Newcastle upon Tyne, West)

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 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 (Liverpool, Scotland Exchange)

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 (Ormskirk)

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 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, 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 (Heywood and Royton)

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 (Morecambe and Lonsdale)

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 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, 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 (Newton)

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 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 (Manchester, Wythenshawe)

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 (Manchester, Ardwick)

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 (Manchester, Openshaw)

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.

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 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 (Macclesfield)

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 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 (Liverpool, Wavertree)

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 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 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 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 (Blackburn)

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 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 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 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 (Ashton-under-Lyne)

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 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.

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 (North Fylde)

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 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. Straw

Both 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 (Liverpool, Walton)

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 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 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.

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 (Liverpool, Edge Hill)

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. 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 (Preston, North)

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. 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 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 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 (Manchester, Wythenshawe)

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 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 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 (Chorley)

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 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 (Ince)

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 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 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 (Liverpool, Scotland Exchange)

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?

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 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 (Bebington and Ellesmere Port)

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 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 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. 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 (Bootle)

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 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 (Burnley)

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.

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.

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 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 (Macclesfield)

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 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 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 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 (Newton)

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 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. 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 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 (Liverpool, Edge Hill)

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 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 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 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 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 (Morecambe and Lonsdale)

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 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 (Bootle)

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 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 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 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 (Rossendale)

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.

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 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 (St. Helens)

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.

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.

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 (Stretford)

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 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 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 (Manchester, Central)

rose—

Mr. Tom McNally (Stockport, South)

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 (Farnworth)

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 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.

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 (Manchester, Openshaw)

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?

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 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 (Bury and Radcliffe)

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 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 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 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.

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 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 (Manchester, Gorton)

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 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.

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 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.