HC Deb 29 June 1981 vol 7 cc586-664

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

4.5 pm

Mr. A. E. P. Duffy (Sheffield, Attercliffe)

We are debating today the problems and prospects of a region of 5 million people, widely scattered, with its beginnings in West England, within sight of the Irish Sea, a region which wanders through the Yorkshire dales, embraces 80 per cent. of the wool textile industry, forges and machines some of Britain's best steel, has huge stocks of coal, maintains overseas trade links through the Humber ports, and ends at the North Sea, with fish from Hull.

The region is the base line for a new European trading axis which is fast developing between the British industrial heartland north of the Wash and the Continental industrial heartland served by Rotterdam and the Rhine. This is good for Yorkshire and Humberside, which bestrides this new trading axis. Yorkshire's manufacturing and service industries must therefore be fortified by it—but only if the Government generate a proper economic climate for their development.

It is not just their location which makes Yorkshire and Humberside a good vantage point for testing Britain's industrial prospects. The region shares many of the structural economic problems affecting major United Kingdom centres, but it also has a number of important assets which suggest that it is one of the areas in Britain where a pick-up in the economy would soon manifest itself—again with the requisite Government policies.

Let us look at the problems first. Yorkshire remains substantially dependent for manufacturing employment on three sectors—textiles, mining and steel—the prospects for which are uncertain at best. The bulk of Britain's textile industry is concentrated in the county to the west of Yorkshire, in the Bradford and Huddersfield districts. Although the industry has moved up market and currently exports about 40 per cent. of its output, it remains prey to foreign competition.

The future of the mining industry in the region is also difficult to assess. Although coal's importance seems likely to continue, the future of the region's pits will undoubtedly be affected by the development of the great new Selby coalfield. The National Coal Board will be looking to the rest of the coalfield to man Selby, and this could tempt the board to transfer men away from some of the more marginal mines in the area. The pit closure proposals in early February and the subsequent strike threat revealed the tensions within the industry.

As for steel, local survey work in Sheffield and Rotherham shows a likely 50 per cent. job reduction in the private sector and a 22 per cent. reduction in British Steel in the two years from December 1979 to some time in 1981. That means over 7,000 jobs lost for certain in 1980–81 in the private sector, including the major redundancies announced by Hadfields and Firth Brown, with over 2,000 likely in the near future. Also, over 2,000 jobs were lost in the public sector in 1980, before the reduction of 3,000 as a result of the corporate plan. That means that over 15,000 jobs have been lost in 1980 and 1981 alone—a truly frightening figure.

The engineering sector as a whole remains depressed, with cutbacks continuing, and a generally low level of business.

Dr. Shirley Summerskill (Halifax)

Does not my hon. Friend agree that, as the engineering and textile industries in West Yorkshire have declined so rapidly under this Government's policies, some financial investment is necessary and desirable for them in the same way that the Government have poured money into the steel and car firms?

Mr. Duffy

I entirely agree with my hon. Friend. She has touched on perhaps the one aspect of regional policy as it affects Yorkshire that has, more than any other, concerned all my hon. Friends over the last year or two—the lack of public investment in our region.

Our region comes off worst in any comparison with regions such as the North, the North-West and Scotland—whether we look at regional development grants and industrial assistance expenditure, other public expenditure, or simply general aid to the regions. It is not only the lack of public moneys for the purpose that my hon. Friend has in mind that causes our concern. We are concerned because when we look elsewhere—at gross average earnings, average weekly expenditure and even the average working week—we see that our region is worse off than those that I have mentioned, which still continue to receive more identifiable expenditure than our own.

Mr. Bob Cryer (Keighley)

Does my hon. Friend, who has accurately outlined the circumstances, accept that the Government are also cutting back on regional aid in Yorkshire? In an area such as my own, for example, although unemployment has increased by over 150 per cent. since the advent of the present Tory Government, the Government propose to end regional aid by 1982. Keighley is not alone. This is one of the causes of great anxiety for the whole of West Yorkshire.

Mr. Duffy

I am grateful to my hon. Friend for reminding the House that our worry relates not merely to a low—in our judgment, unjustifiably low—level of public expenditure in our region but to a level of public expenditure that is under constant pressure from the Government and is constantly being cut. My hon. Friend has reminded me of the removal of assisted area status from much of our region by next year. Because of that, the figure of public expenditure will continue to be cut.

Fishing is an aspect of regional work that has suffered perhaps more than any other. Indeed, it has had a traumatic experience in recent years. The deep sea fleet has declined from nearly 500 trawlers at the beginning of 1975 to 120 to 130 registered trawlers, of which no more than half are active at present. Even the inshore ports of Scarborough and Bridlington are not doing as well as in recent years.

Like all other parts of Britain, the region has also had to accept a number of large closures as a result of the recession. Some have come in relatively new industries, such as the Lucas and Thorn electical groups, which were brought in to reduce the region's dependence on wool textiles on its west side, while British Leyland has had to abandon plans to redevelop, at a cost of £25 million, its aluminium foundries in Leeds.

According to many local business men, the worst is yet to come. As recent CBI and other reports show, destocking has not yet finished. In other words, the bottom of the recession has not yet been reached. Manufacturing industry is still making cuts. Arthur Lee and Sons, the Sheffield-based private sector steel maker, a firm that I know the Minister is acquainted with, has continued to cut jobs, even in recent weeks, despite a pick-up in its wire and wire-rope making. Mr. Peter Lee, of that company, believes that those other smaller companies in the steel industry that have hung on taking little or no profit out of the company, not cutting back and trying to sit cut the recession, have their worst problems yet to come.

Michael Mallett, chairman of the Neill Tool Group., a major offshoot of James Neill Holdings, also of Sheffield, agrees with this view, pointing out that those companies that have not substantially reduced their borrowings recently could find themselves short of cash and unable to cope with a resurgence of business. In other words, precisely those companies that have taken Government policy seriously may in consequence soon find themselves in the deepest difficulties, and some of them may not be able to survive.

The Government have well-defined financial policies, but they have no strategy to help British industry sustain itself against the shattering effects of those policies. We have now seen the full financial horror of Duport's enforced withdrawal from the steel business. I look at the Minister, because I know that he is closely acquainted with Duport's recent problems. Indeed, he had ministerial involvement. He will have read the report laid before shareholders last week, when a net loss of more than £58 million for the past financial year was reported. The chairman, Mr. Eric Sayers, launched a withering attack on Government policies, saying that they had nearly driven the group as a whole to the wall. He had the hon. Gentleman more than any other Minister in mind. The report to the shareholders said: The treatment of the private sector of the United Kingdom steel industry has been nothing short of scandalous. That was an indictment of the Minister as well as of Government policy. Yet in a letter to me dated 29 May, following major redundancies at Hadfields and Firth Brown, the Minister of State, Department of Employment, Lord Gowrie, said: the new permanent jobs needed so desperately in Sheffield can only be created, not by the Government, but by industry itself. How can anyone seriously take that view?

In recent weeks the Government's economic policies have been in a maelstrom, as independent authority after independent authority has reported adversely on them. The Government have received some relief in recent days from the only source from which they could receive such relief. In view of that, how could a Minister seriously address himself in those terms to a Member of this House? How can he expect any hon. Members to believe that when an industry has been treated as Duport has been treated? I dare say that not one Opposition Member could not draw on his own constituency experience and quote from a firm in his constituency to back up what I have said. We can indict the Government's economic policies on the basis of the experience of firms in our constituencies—no doubt including many whose managers voted for the Conservatives; those policies are indicted out of the mouths of former Government supporters.

The current regional unemployment rate, at 11.3 per cent., hides the severity of the problem in the main industrial centres of our region. The region includes North Yorkshire, which customarily has a lower level of unemployment, not comparable with levels in the western or southern part of our region. The regional rate also hides the high level of unemployment among men. In all the great cities—Bradford, Leeds, Sheffield and Hull—the male-only figure must now be well over 17 per cent.

Furthermore, the numbers unemployed have grown more rapidly in our region than in any other in recent months—in South Yorkshire even more rapidly than in, say, West Yorkshire. The June unemployment figures show an increase in South Yorkshire that is almost twice the national rate. They include 4,370 youngsters who have joined the dole queue since May, making a total of more than 11,500 in South Yorkshire, with many more to come as those due to leave school this month become eliigible to register. I am informed that perhaps as many as half of the young people who are eligible to register now have not done so because they are confused into thinking that they should not register until September.

To meet that demand there are only 1,280 vacancies for adults in South Yorkshire and only 70 for young people. There are only two notified vacancies in the constituency of my right hon. Friend the Member for Barnsley (Mr. Mason). Mexborough has an unemployment rate of more than 20 per cent., now the third highest in England. More than 6,000 jobless in Mexborough are competing for only 80 vacancies. These figures plainly justify an upgrading of Mexborough's development area status to that of special development area status. Doncaster and Maltby have unemployment rates of 14.5 and 15.3 per cent., which easily justify their upgrading. Thousands of jobs throughout the region—nearly 16,000, or the equivalent of 5½ per cent. on the unemployment rate in Sheffield alone—are plainly at risk because they are covered by short-time working subsidy. I draw on the latest figures.

Dr. Keith Hampson (Ripon)

I would not wish to correct the hon. Gentleman falsely. I doubt that he is right in saying that the adult male unemployment rate in Leeds, Bradford and elsewhere is over 17 per cent. The overall figure for Bradford is 17 per cent. and for Leeds 10½ per cent. As the youth figure in Leeds is 28 per cent. of the total, I doubt that the hon. Gentleman can be right.

Mr. Duffy

I assure you, Mr. Speaker, that I can support that figure and that I shall perhaps do so for the benefit for the hon. Gentleman after the debate. It is such a serious contention that I would not have made it casually. I am glad, however, that the hon. Gentleman chose to intervene. It shows that he is alarmed. The figure is, indeed, staggering.

The potential threat posed by short-time working may not be fully recognised. Anyone now benefiting from short-time working subsidy may, regrettably, be unemployed in a few weeks' time. As the current arrangements of many firms expire, a stringent new attitude towards claims, since the guidelines were changed in April, and the restriction on employee cover in re-applications, are almost certain to lead to further redundancies.

Unemployment among the under-25s is particularly high in parts of the region. The estimated unemployment rate among under-25s in United Kingdom regions designated as youth unemployment priority regions by the EEC is nowhere higher than in South Yorkshire. In April this year, the estimate for Scotland was 20.4 per cent., for Wales 21.5 per cent., for the North 20.9 per cent., and for the North-West 21.2 per cent. The estimate for South Yorkshire was 21.1 per cent. There is a clear need to move to a county basis for defining priority areas for the fund.

Much of Yorkshire and Humberside lost some of its attraction in August last year through the downgrading of assisted area status, as my hon. Friend the Member for Keighley (Mr. Cryer) has already remarked. In Sheffield the situation has changed so dramatically that there are already grounds for retention of intermediate status. Soon there will be grounds for applying for full development area status. That indicates the serious deterioration that has taken place.

Mr. Peter Hardy (Rother Valley)

My hon. Friend has referred to Sheffield losing its assisted area status. He will be aware that the Sheffield travel-to-work area includes the employment exchange of Dinnington, where the unemployment rate is well over 20 per cent. Yet arguments that the area should not have lost all aid have been treated with contempt by the Government on numerous occasions.

Mr. Duffy

I am grateful to my hon. Friend for reminding the House that the Sheffield travel-to-work area includes such a serious unemployment black spot. Furthermore, many of my hon. Friend's constituents travel to work in Sheffield. Their employment may currently be prejudiced. We fear that unemployment in the Sheffield travel-to-work area is deteriorating so rapidly that by August or September the figure could be in excess of 40,000. That would mean an unemployment rate of more than 14 per cent.

However, one commodity not in short supply in Sheffield is spirit. Rather than sitting licking their wounds, Sheffield industrialists are searching actively for business and, in many cases, winning it. Sheffield city council, the four county councils, and the district councils in the region have all adopted an attacking rather than a defensive attitude in the search for new industry and more jobs. They have plainly decided that they cannot rely on the Government. The abolition of the Yorkshire and Humberside economic planning council, together with the other regional councils, has not helped the local authorities. A voice that was able to communicate with the Government on the needs of the area has been removed.

Local authorities are providing small industrial units. Over the last three years in Leeds and in Sheffield these small industrial units have been snapped up. Job losses in various traditional industries, especially those located in Hull, have meant substantial disinvestment in recent years. Until the worst onset of rececession in 1979, Hull was attracting as many jobs as it was losing. Although industrial investment still continues, it is mainly of the small factory unit and nursery workshop type, as is happening elsewhere in the region.

While grateful for the success of small industrial units, thanks to the initiative of the local authorities, the region recognises that reliance cannot be placed entirely on the jobs that these will generate. More is needed. The efforts of the local authorities need to be matched by efforts by the Government. Cuts in public spending at a time of severe recession and the gearing of grant aid towards targets that many local authorities cannot reasonably achieve have thrown severe burdens on both domestic and non-domestic ratepayers.

The Government have failed to recognise and may, I fear, still be refusing to recognise, through the stubbornness of the Secretary of State for the Environment, that any high spending that the local authorities undertook in the past had to take place in response to a high level of need for services and to meet the legacy of early industrialism. I do not wish to make unfair comparisons with other regions. I wish merely to emphasise that the need existed. All local authorities in the regions have faced this situation. All have had to meet a great demand for services. There was the historical need to satisfy. All have needed more help than was provided by the Government.

South Yorkshire and other parts of the region suffer from an ageing and deteriorating housing stock. Yet house building rates have been allowed to fall dramatically. Social problems have gone hand in hand with these economic and environmental problems. In the inner areas of the major conurbations within West and South Yorkshire there exist the familiar city centre problems of substandard living conditions and poor public amenities in addition to lack of jobs.

A comparison of average gross weekly earnings, spending on social security benefits, regionally relevant public spending per head and regional development spending per head for Scotland and the Northern and the North-West regions shows that our region does not merely come off worse; it fares very badly, indeed.

It is difficult to get quantitative data on the impact of unemployment on social problems. I must be careful in view of the intervention of the hon. Member for Ripon (Dr. Hampson). However, the conviction is growing in Sheffield that high unemployment is having an impact on the inner city areas and in wards such as Manor, Castle, Burngreave, Southey Green and Netherthorpe. Here there are indications of increasing problems. They include cases of family stress triggered by debts and financial difficulties. Social work referrals are generally often at a low ebb in June and July. That is not so this year. Violence, vandalism and robbery are assumed to have some relation to increasing unemployment.

In the Manor ward there are neighbourhood grudges and groups of young people causing trouble, leading to more police cover on the beat. The locality is a large division, claiming about 20 per cent. of the time and attention of the city's social services department, but now providing 50 per cent. of its work. Advice centre activity is increasing, as are debt problems.

While those problems are serious, the region also has a number of strengths, which will play an important part in helping it to weather the current recession more easily than most of Britain's other industrial regions. Apart from its staple industries, Yorkshire has a strong and diverse industrial base extending to most types of engineering, chemicals, plastics, carpets, electronics, food and drink.

Communications in Yorkshire and Humberside are among the best in the country. Rail services have been improving in recent years, though the service to Sheffield is a notable exception. I know that my hon. Friends from Sheffield will want to say something on that subject.

In Sheffield, Rotherham and Doncaster there is hope that completion of the South Yorkshire navigation improvement scheme will symbolise the renewal of our region. In the short space of a decade and a half the Yorkshire coalfield has been transformed from a top-heavy, underproductive organisation to a highly efficient one, using the latest mining technology to achieve levels of productivity which are the admiration and envy of nearly every other British coalfield.

We must all expect that, apart from providing a more coherent community north and south of the river, the new Humber bridge will surely make Hull the hub of a sub-regional market of about 850,000 people whom the bridge will make it easier to serve. I am sure that when we heard the news that all roads to the bridge were jammed yesterday not one of us failed to share in the pride that all Humberside Members must feel. If the attractions of that new market grow, Hull ought to develop more as a regional centre, with all the extensions of professional, technical and distributive services that that implies.

The Hull marina project is under way and that fine amenity will undoubtedly be seen eventually as a tribute to the imagination and enterprise of local men. The first phase provides 400 berths in the city's two Victoria docks in the middle of the city. According to Ron Kershaw in The Times, within two years shoppers in Hull will be able to enjoy the sight of yachts bobbing at anchor within 400 yards of Marks and Spencer. That is yet another amenity in which the region will take pride, and it will be glad that it is located in Hull.

Nevertheless, Yorkshire and Humberside are taking a harder knock than those in Whitehall and Westminster may imagine. There is no sign of recovery and no prospect of growth. The situation is grim, but all is not gloom. With typical Yorkshire grit, men and management in industry are making a fight of it. If only they had a Government to match their doggedness and will to win! The region is maintaining its traditional spirit of independence and seeking to fashion its own fate. While county and district councils feel that the road to recovery could be made easier with more Government help and understanding, no one in Yorkshire is asking for summat for nowt. There is no begging-bowl mentality—simply an underlying determination to survive and a confidence that in Yorkshire there are too many great assets that it is not in the public interest to neglect. There is confidence that in the end Yorkshire grit will bring in the "brass", if only the Government will stop clobbering local industry and local authorities and start to pursue constructive interventionist policies.

All my hon. Friends are aware that our region must be expected to change as times change and must be expected to change dramatically in its attitudes and industrial and commercial mix during the 1980s. We are all aware that there are considerable differences among us, as there must be among representatives of a region which embraces the North Yorkshire moors, the Sheffield steel industry, the Bronte country, the deep pits around Doncaster, and the Humber ports.

But we all have in common, as, I suspect, do Conservative Members from the region, an unlimited belief in the quality of our region's products—its textiles and its coal and steel—and in our region's rich store of engineering technology, the unrivalled skills of management and men, its good industrial relations and ample industrial land and manpower and its excellent communications and model race relations.

Why do not the Government share those beliefs and back them with public investment? Ours is a dynamic region which is able to generate wealth—a priceless national asset—if only the Government would give it a chance to do so, if only they would realise that asset, if only they would spark the region back to life, if only they would give a lead, if only they would abandon their cold and calculating policy to reduce public spending and social provision, if only they would provide for growth, if only they would begin to get Yorkshire back to work.

4.35 pm
The Minister of State, Department o f Industry (Mr. Norman Tebbit)

I am grateful to the Opposition for choosing this subject for a Supply day debate. I suppose that, as a Southerner, the nearest that I shall ever get to the exclusive club comprising those who have opened for Yorkshire is to open in a debate on Yorkshire.

I congratulate the hon. Member for Sheffield, Attercliffe (Mr. Duffy) on the way in which he opened for Yorkshire and, indeed, on how he closed for Yorkshire.

Mr. John Prescott (Kingston upon Hull, East)

And Humberside.

Mr. Tebbit

And Humberside, too. The hon. Member for Attercliffe must have given a lot more cheer to his colleagues and his words about Yorkshire will have given much greater cheer to everybody than did the words of the Leader of the Opposition in his big flop on Wednesday night. The hon. Member for Attercliffe had a lot to say that was constructive, which was in great contrast to Wednesday's performance. I congratulate the hon. Gentleman and I welcome his constructive remarks.

The hon. Gentleman had a couple of new things to say. He suggested a new fear was gripping industrialists, that the end of the recession was coming and they would not be able to cope with it. I do not think that we should worry too much about that.

We know that the end of the recession will be here before long and we know too that firms will cope with it, just as they have coped with harder times. I am supremely unworried about the criticisms of Mr. Sayers of Duport, whose firm was rescued from receivership by the Government and British Steel's bid to take over the assets that the company could no longer afford to maintain.

If the hon. Member for Attercliffe wants to compile a list of criticisms or own goals, I suggest that he starts with what trade union leaders said about his Government during the winter of 1978–79. Indeed, he might go on to what many trade union leaders are saying about his party's efforts to find a policy on which they can agree among themselves.

Even a Southerner is well aware of the vast diversity in Yorkshire and Humberside—rural North Yorkshire, industrial Sheffield, the South Yorkshire coalfields, the traditional fishing ports and the Yorkshire Riviera. In some typed notes I was offered by my Department as a contribution to the debate the Riviera came out as Reviera, which gave it a dreamlike quality which reminded me of the agreements at Bridlington and Scarborough.

I mentioned diversity to emphasise that there is no simple, all-embracing Government goody that can be handed out to solve all ills. On the contrary, the problems of the regions must, in general, be solved in the regions. I fully accept that the hon. Gentleman realised that. Of course, the Government are willing to give help, and that means taking from other regions to give to this region, to help cushion the impact and ease the pain of sudden change. The hon. Member for Colne Valley (Mr. Wainwright) shakes his head, but surely he does not believe that lollipops can come from nowhere, as if by magic. He knows that if help is given to one region, it is paid for by taxpayers in the country as a whole.

Mr. Richard Wainwright (Colne Valley)

I have never agreed that there is a fixed quantity of wealth in this country. We in Yorkshire can expand the country's wealth enormously if we are given the chance. There is no question of robbing Peter to pay Paul.

Mr. Tebbit

Of course there is not a fixed amount of wealth in the economy in the long term. But where does the hon. Gentleman suggest that that additional public expenditure can come from right now? He has no idea and never has had any idea, except for an increase in taxation or in borrowing.

Mr. Alexander W. Lyon (York)

Increase the borrowing.

Mr. Tebbit

The hon. Member for York (Mr. Lyon) says that we should have an increase in borrowing, but that would put up interest rates again. Is that what the hon. Gentleman wants?

Mr. Alexander W. Lyon

Every private manufacturer borrows to invest, and that is the basis of the creation of wealth. The Government have a blind obsession about cutting the borrowing requirement, irrespective of what the money is used for. If one borrows to invest to create wealth, one creates more money to pay it back. That is how our country became great.

Mr. Tebbit

The hon. Gentleman forgets the important part, that the borrowings must first be what one can afford and, secondly, that they must create wealth. Most of the projects that have been put forward by Labour Members for public expenditure are not ones that will create wealth, but ones that will reduce it.

Mr. Hardy

Does not the Minister realise that the cost of unemployment now is greater than the cost of the alternatives, and that in my constituency this year unemployment, directly and indirectly, will cost around £70 million? For half that expenditure the Government could reduce unemployment by more than half the present figure.

Mr. Tebbit

I do not agree. No one seriously suggests that the present levels of unemployment could be reduced for long by massive new public expenditure. That policy was specifically rejected in the past by the hon. Gentleman's right hon. Friend the then Chancellor of the Exchequer and by the then Prime Minister, and they were right to reject it.

Mr. John Townend (Bridlington)

Does my hon. Friend agree that it is no good embarking on massive public expenditure unless such expenditure is properly controlled and adequate wealth is created from it? Is he aware that when the Humber bridge board applied to and negotiated with the Government of the day for capital to build that bridge—I was involved at the time—the amount was £17 million and, because the bridge is four years late—partly due to geographical factors, but principally due to bad labour relations—it has now cost nearly £90 million? Does not my hon. Friend agree that it is a waste of the country's resources to think of expanding into public projects of that nature in the near future?

Mr. Tebbit

I agree with my hon. Friend. Undoubtedly the bridge will be useful to the region, but had we known at the time how much it would cost, I wonder how much of an economic investment it would have looked. I think that that is open to question.

I entered a caveat to what I said about solving the problems in the region, not least because clearly the problems of industries such as fishing cannot be solved at a regional or even a national level, but only through international agreement. That, naturally, will cause the hon. Member for Kingston upon Hull, East (Mr. Prescott) to criticise our membership of the European Community. However, let me assure the House about the other industry which is so vital to the region. The agreement that we reached last week on steel in the European Community—an agreement which is absolutely vital to the saving of the British steel industry—was one that could have been reached only in that forum. We could not have taken a unilateral step which would effectively protect our steel industry against the subsidies of other countries' steel industries. We had to reach that agreement in the context of the Community, and that is what we have done.

Mr. Stan Crowther (Rotherham)

Is it not obvious to the Minister, as it is to everyone else, that if we were not members of the EEC we should have the right that we once had to limit imports into Britain, to impose levies where imports were manifestly subsidised, and to take all the steps that we have now given away to the Commission? Is it not clear that if we were not in that organisation we could protect the British steel industry in any way that we wished?

Mr. Tebbit

Of course we could build a wall round the steel industry, but would we be able to sell any of our products overseas, or would our customers build similar walls around their countries to prevent our doing so? I know that the hon. Member for Rotherham (Mr. Crowther) is a devotee of the little England concept with a wall all round us, but that does not work for a trading nation. It is about time that the hon. Gentleman understood that. Nor is there a great wall around Europe. Europe is one of the lowest tariff areas in the world and one of the freest in its trade.

I wish to draw the House's attention to an answer that was given on Friday to my hon. Friend the Member for Surrey, North-West (Mr. Grylls), because it emphasises some of the problems that face Yorkshire and Humberside, as well as the United Kingdom as a whole. The answer shows that between the fourth quarter of 1979 and the fourth quarter of 1980 unit labour costs in manufacturing industry, calculated in national currencies, rose 23 per cent. in the United Kingdom, 11 per cent. in West Germany, 18 per cent. in France, 11 per cent. in the United States, and 4 per cent. in Japan. If a comparison is made in common currency to take account of the effects of the exchange rate movements, expressing all countries' unit labour costs in terms of United States dollars, the index of unit labour cost in manufacturing industry rose 35 per cent. in the United Kingdom, 3 per cent. in West Germany, 10 per cent. in France, 11 per cent. in the United States, and 18 per cent. in Japan. That is over a 12-month period.

Taking a longer view, over the decade 1970 to 1980 production in this country increased by 16 per cent. and our incomes by 335 per cent. That period was almost equally split between the two Governments—perhaps the Labour Government had slightly more than the Conservative Government.

In the face of those figures it must surely sink into the mind of even the most bigoted person that many of the problems of our economy are of our own making and will not be solved by Governments suddenly handing out subsidies. There is no amount of Government subsidy that can overcome the effect of those figures, and the Labour Party recognised that when it was in Government. I am sorry that it has forgotten so quickly.

Mr. Frank Hooley (Sheffield, Heeley)

The Minister has omitted the key figure—that for industrial investment. Investment in Japan, West Germany and the United States is two, three or even five times per worker that which it is in Britain. If the British private sector will not invest, public investment is the only alternative.

Mr. Tebbit

The hon. Gentleman should examine recent answers relating to the breakdown of industrial costs into wages, profits and other expenditure. They show that profits in recent years were squeezed virtually to zero on current cost accounting as a result of wages taking up an increasing share of available resources after raw material costs. It is scarcely surprising that there was a lack of investment. Even so—and there are plenty of figures to prove it—the amount of productivity out of every pound of investment in Britain is much below that of our rivals. How can one increase investment when the return on existing investment is already inadequate?

Mr. Allen McKay (Penistone)

It is dangerous to quote percentages in that way. The base rates of the various countries must also be taken into account. We must also take into account the age of firms and machinery which have gone out of production. The Conservative Party advocated free collective bargaining, which is exactly what we have.

Mr. Tebbit

It is interesting to know that the hon. Member for Penistone (Mr. McKay) is in the half—or third or quarter—of his party which opposes free collective bargaining. I have always believed that free collective bargaining is the best option. It has, of course, terrible effects if it is conducted irresponsibly. However, one must be careful about quoting percentages for varying bases. Even before the increases to which I have referred our position was much worse than that of most of our rivals. That means that the percentages under-emphasise rather than over-emphasise our problems.

No amount of subsidy can resolve the problems. It is no secret that the Government are no lovers of subsidies. There can be no substitute for the regaining of competitiveness. For a trading nation such as ours there is no choice but to meet the competition and beat it, or be beaten by it. I was pleased with the way in which the hon. Member for Attercliffe expressed the determination of Yorkshire and Humberside folk, and many others, to do just that.

The Government's first aim is to control inflation. The extent to which that leads to transitional unemployment is vitally affected by the level of pay increases. We warned last year that irresponsible pay bargaining would result in an increase in unemployment. There was no doubt about that. Everbody knew it. However, many people walked straight into it and put either themselves, or many others, out of work.

Mr. Harold Walker (Doncaster)

I have been examining the Conservatives Party manifesto. The Minister referred to irresponsible pay settlements. Surely his party has some responsibility. For example, the manifesto states: we must all start by recognising that Britian is a low-paid country … The return to responsibility … requires that people keep more of what they earn; that effort and skill earn larger rewards". The Minister cannot have it both ways.

Mr. Tebbit

There is nothing about having it both ways in that. I thought that we were all agreed that Britain is a low-paid country. The problem is that the productivity is even lower than the pay. I thought that we were agreed that people should keep more of what they earn. The calls for higher public expenditure are not compatible with that. Which way does the right hon. Member for Doncaster (Mr. Walker) want it? He had better make up his mind.

I have outlined the broad national issues and the background to the problems of Yorkshire and Humberside. Like other Governments during the last half century we have sought, by regional aid policies, to lessen the regional economic differences and to alleviate the distress of those parts of the kingdom with the worst economic conditions. Broadly, such areas are statistically identified by the absolute amount and rate of unemployment and the other prospects of the region. The rates of unemployment reflect the converse of Voltaire's observation which was, perhaps, at the back of the hon. Member for Attercliffe's mind. Voltaire said: Work banishes those three great evils, boredom, vice and poverty. There is no substitute for work.

Overall, the unemployment rate in the region is 11.9 per cent. compared with 10.9 per cent. in the United Kingdom as a whole. Within that figure there are enormous regional differences and severe problems. When we came to office in May 1979, 44 per cent. of Britain's working population lived in areas benefiting from regional aid. I do not believe that that could constitute a sensible regional policy aimed at the objectives which I outlined earlier. I cannot believe that 44 per cent. of the British working population needed the general subsidy which regional measures offered. In any case, such a wide spread made them ineffective.

Opposition Members are aware of the principles underlying our approach to regional industrial policy and the way in which we intend to make it work. As a result of the regional industrial policy review in 1979, the Mexborough area, for example, was designated a development area and upgraded. Hull is retaining its development area status. Since that review we have recognised the particular problems experienced by Scunthorpe, which the steel closures have exacerbated, and we have made it a development area.

However much the Opposition may deride the concept, we are concentrating regional aid measures on the areas which really need them. That is the only way in which they can be effective. We are offering real incentives to industry to go to such areas. The Opposition seemed to think that nearly 50 per cent. of the country deserved to be assisted in 1979. They were saying that under their Government there was something profoundly wrong with British industry.

Our more selective approach must give areas with long-term and so far intractable unemployment problems a better chance of attracting investment and job opportunities. It is sheer rubbish to say that Yorkshire and Humberside are badly used. The hon. Member for Attercliffe must accept that public expenditure equals public taxation. It is right to concentrate our aid on the areas—not only within the region which we are discussing but in the United Kingdom as a whole—that have the worst problems.

When it compares the problems of this region in general with those of the Northern region or parts of Southern Scotland, for example, the House will agree that that is where the aid must be concentrated and where the greatest incentives must go to attract inward investment.

Mr. Cryer

The Minister will accept that the scale of values which he is talking about is much worse under the Conservative Government and that the level of unemployment in the worst hit areas is higher than it has been since the 1930s. Does he also accept that many areas of West Yorkshire face high and increasing levels of unemployment and, at the same time, withdrawal of intermediate area status by 1982 for places such as my constituency? How long will high and increasing levels of unemployment have to be borne before the Government withdraw their review and restore assisted area status to the areas of West Yorkshire that are now suffering?

Mr. Tebbit

I often feel that I am not making the most productive use of time when explaining matters to the Opposition. Never did I have that feeling more strongly than during the hon. Gentleman's intervention. I just explained precisely to him that there was no common sense or economic sense in having 44 per cent. of the country as assisted areas—[Interruption.] If the hon. Member for Keighley (Mr. Cryer) would cease rabbiting on for a moment—

Mr. Cryer

If the Minister answered the question, it would be helpful.

Mr. Tebbit

If the hon. Gentleman ceased rabbiting, that would be helpful. I allowed him to intervene and listened to his question. It would be an act of extraordinary politeness if he would now allow me to give him an answer. As I have already explained, there would be no sense in returning to a position where half the country was designated an assisted area. Therefore, the policy was, and is, that assistance should be concentrated on the areas with the highest unemployment and the poorest prospects of recovery.

The hon. Gentleman asked me what that meant for West Yorkshire. We shall look at the levels of unemployment in West Yorkshire, in contrast with those of other areas, and the general type of economy that exists there and draw our conclusions from that. Quite clearly, in an area such as Scunthorpe there is much less chance of new industry coming in fast enough—the town was previously virtually a steel-only town—to answer the problems than there is in those parts of Yorkshire that have a long history of a better mix of industry. I hope that the hon. Gentleman will be satisfied, at least for the time being, with that answer.

I wish to emphasise what has been done for the Yorkshire and Humberside region since the Government took office. It has been given £39 million in regional development grants, paid for by taxpayers somewhere, including those in that region. It has received selective financial assistance of £15 million, and 13,000 square metres of Government advance factories have been let. Like the rest of Britain, the region benefits from many other support schemes for industry generally. The youth opportunities programme has provided places for almost 36,000 youngsters and the special temporary employment programme has provided 1,650 places. Without the 113,000 jobs that have been supported by the temporary short-time working compensation scheme, unemployment in the region would be much higher.

The Government are not insensitive. We are not ignoring the problem of the unemployed. However, we do not believe that subsidies are the right answer in the long term. Governments cannot create jobs, although we can, to some extent, push them around the economy. The customer is the only creator of lasting jobs, and then only provided that industry and commerce can respond to his needs.

The Government have placed emphasis upon the encouragement of smaller businesses. There is evidence both from this country and elsewhere that net job creation, especially during a recession, can best be achieved by smaller companies. As my hon. Friend the Under-Secretary of State for Industry said last Monday, the Government have taken 60 specific steps to help small business men. I am encouraged by the high rate of inquiries to the small firms centre at Leeds—an average of 384 a week. I hope that that trend will continue. We need entrepreneurs, and I cannot believe that a region which includes Leeds, Bradford, Sheffield, Barnsley, Rotherham and many other industrial powerhouses cannot find risk-takers and innovators ready to take on the market. I hope that all horn. Members, especially those from those areas, will encourage their constituents at least to consider starting, or helping to start, a new business. The potential rewards for the individual, the region and the economy as a whole are enormous.

Calls for subsidies tend by their very nature to be calls to put scarce resources into the weakest sectors of the economy—those least likely to grow or even to survive. We have seen huge losses of jobs in traditional industries in recent years. it is unlikely in many cases that those industries will ever employ so many again. We need new firms—many of them small firms—to solve the problems of the next 20 years.

I wish briefly to mention five sectors that have particular problems. The Government recognise that the textile industry is in difficulties, and has been for years. My hon. Friend the Minister for Trade said recently that the Government had added to the number of quotas for textiles from low-cost suppliers at the rate of one for every two weeks of the Government's life. For a Government who are committed to free trade, that does not suggest a lack of sensitivity towards the problems of the textile industry. In that area, as in many others, we join our Community partners in discussing and, where necessary, protecting industries facing difficult periods of transition. The textile industry must adjust, but we are hoping to ensure that it is not unfairly undermined during that period of adjustment.

I say to the hon. Member for Halifax (Dr. Summerskill) that were the Government not pouring money into British Steel to pay for the mistakes made under nationalisation, were we not pouring money into British Leyland to pay for the problems that arose not least from the appalling industrial relations that wrecked that company, we would have more ability to help the textile industry. It is no good Opposition Members turning up in debates on overseas avid to demand more help for developing countries, and letting their little hearts bleed all over the Brandt report, and then, when those developing countries want to export to us shouting for the barriers to be put up to keep them out. Which way do they want it? [Interruption.] I think that we can find plenty of evidence that Opposition Members are asking for both things at the same time.

The second problem sector in Yorkshire is the coal industry. The price of oil doubled again between May 1979 and May 1981. That has put a bit of shine back on coal—hence the new development at Selby. But, again, the transitional measures to achieve a viable coal industry may be painful, even though the Government are giving considerable help, even to the extent of introducing a new boiler conversion scheme to convert from oil to coal-fired boilers. A number of hon. Members have taken a great interest in that scheme, most notably the right hon. Member for Wakefield (Mr. Harrison). Although as a Whip he seldom speaks in the House, he rarely neglects an opportunity to pursue the interests of his constituents through all the other methods available. [Interruption.] I am not saying that in criticism, but as a compliment to the: right hon. Gentleman. He took a particular interest in helping to get that scheme off the ground. I am grateful to him. The way ahead must be to concentrate on getting down the price of coal to competitive levels against the remainder of the world so that our energy costs can match those of our competitors.

The third problem sector is the steel industry. Of course, it should never have been nationalised, but Opposition Members thought otherwise. Huge sums were poured into that industry to increase its capacity. Now we are pouring in huge sums to return to a realistic capacity. That is one of the consequences of nationalisation. The steel industry is still consuming more wealth than it creates, despite all the investment. The necessary rationalisation must continue. Among the measures that we agreed in Luxembourg last week was that the social volet should be increased to bring more help to those who lose their jobs in the steel industry.

The fourth problem sector is the fishing industry on Humberside. Of course, we shall continue to fight the battle within the Community to obtain a fair deal for fishing industries in Britain. My right hon. Friend the Minister of Agriculture, Fisheries and Food has been the toughest negotiator in that respect than any we have ever seen. The hon. Member for Grimsby (Mr. Mitchell) laughs. If the right hon. Member for Barnsley (Mr. Mason) had been able to get it right in his time, it would not be left to my right hon. Friend to do the job now.

Engineering is of especial importance to Yorkshire. It is within that industry that in the past a lack of innovation, poor product design compared with that of our competitors, overmanning and restrictive practices have perhaps been most noticeable.

Mr. Cryer

And low investment.

Mr. Tebbit

Individual companies and the country generally have suffered. Equally, the good companies have prospered. There are many of them as examples. The much more realistic wage settlement in the engineering industry last year was a sign of hope for the future, and that trend must continue.

Mr. Duffy

There is one firm of the sort that the hon. Gentleman has in mind in Sheffield. It is a blue-chip giant called Firth Brown. Despite its reputation, the excellence of its product and the excellency of its investment policy in recent years, it still had to undergo a major redundancy programme earlier this year. It was not able to escape the general fate of the engineering industry.

Mr. Tebbit

I do not want to bore the House unduly or extend my speech needlessly when I know that many hon. Members want to participate in the debate. However, the hon. Gentleman knows that Firth Brown is one of the leading companies producing special steels and special alloys, especially for the aerospace industry. He must know that airlines throughout the world have not been buying as many aircraft or as many new engines as they were a few years ago. As a result, there are fewer orders. The Government cannot persuade Pan American or Air India, for example, to buy more aeroplanes so that more people may be employed in Sheffield. That is regrettable but it happens to be a hard fact and we must live with it. It is hard for that company when its products are in decreased demand in the world. It is not possible to put all the blame for that on the Government and I hope that the hon. Gentleman will not do so.

Bad news is always news, especially on the Opposition Benches. God knows that they have enough bad news of their own. However, there is good news in both Yorkshire and Humberside. I shall present the House with a few snippets from a thick pile that I have pulled out from the notes in the Department.

In Sheffield a private company building 20 small new factory units to let at £55 a week had received 40 inquiries only two days after advertising the units.

Mr. Cryer

Yes, inquiries.

Mr. Tebbit

There has been work on a new industrial estate in Wakefield that will extend to 200 acres. There have been over 50 inquiries for sites in a new enterprise zone in South Kirkby. In Bradford 50,000 sq. ft. of floor space in an old factory is being reallocated for workshop units and central services for small firms. I understand that 35 of the 80 units are already rented. That scheme has the co-operation of the local chamber of commerce and the metropolitan district council with financial support from many sources, including the NEB and the banks.

A new £500,000 plant for the production of sulphuric acid and soda salts was opened earlier this year by Croda Colours Ltd. at Brighouse. I understand that 70 per cent. of the production will be exported. There is a new £3½ million factory, warehouse and office complex at Shipley for CTE Sylvania, a subsidiary of the United States company. One of Britain's most successful manufacturers of small business computer systems, Sistime Ltd, plans to build a £30 million factory in Leeds, which will provide another 800 jobs. British Aerospace received £200 million-worth of orders at the Paris air show for new civil airlines. Those orders will bring many hours of work and many jobs to Brough. At least it will preserve the jobs that are there. Such enterprise will ensure that the companies concerned and the area come through the recession.

I join the hon. Member for Attercliffe in praise of what is a great region of Great Britain. It has given many good things to the country, starting with good beer, good beaches, good batting and good bowling—I wish it had some better bowling because England could well do with it; if only Freddie Trueman were young enough to recall. The region is well placed. It is within reach of all parts of the United Kingdom and Europe and it can take advantage of most markets that are available to United Kingdom firms. It is a diverse region and that diversity is its strength. There are parts of the region that may still need special measures of support. I have mentioned Hull and Scunthorpe in particular.

The most dangerous illusion is that the Government can create viable jobs. Government action requires revenue from the taxpayers. Every penny that we take from taxpayers ceases to be available to stimulate demand for goods and services produced outside the public sector. Our role is to create a framework within which profitable business and enterprise may prosper.

Individuals can help by their decisions as trade unionists and managers. Companies can be more agressive and more enterprising. Trade unions can be more reasonable. Local authorities can help by not penalising commercial ratepayers to pay for extravagant local expenditure, and in some instances they have.

I take the argument of the hon. Member for Attercliffe about what needs to be spent by councils. But how can it be that South Yorkshire can turn in a rate increase of 32.43 per cent. and Sheffield a 41.61 per cent. increase against Rotherham's 20.19 per cent., Doncaster's 24.82 per cent. or Barnsley's 25.85 per cent? The last three increases are pretty terrible but how can we excuse an increase of over 40 per cent?

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

Compared with what?

Mr. Tebbit

Compared with Humberside, which cut its rate by 1.9 per cent. Boothferry cut its demand by 0.94 per cent. and Cleethorpes did so by 0.52 per cent. Glanford announced a reduction of 2.64 per cent. and Grimsby made a cut of 2.08 per cent. Holderness managed to make a cut of 4.33 per cent. Those are some examples from the list of honour. What is possible for one local authority should be possible for others. There is no excuse for a difference of over 40 per cent.

I echo much of what the hon. Member for Attercliffe says: Yorkshiremen have never lacked grit or the self-confidence that is needed for success. The region has been hard hit, not least in the declining industries. As a Southerner I have no doubt that the region can and will bounce back. I have no doubt that it will do so as a result of its own efforts more than by subsidy or protection. I hope that Labour Members will follow the hon. Member for Attercliffe in showing a touch of confidence in the ability of their constituents to recover from past decades of mistakes which have undermined our competitiveness.

I agree with the hon. Member for Attercliffe that a whining Yorkshireman would be a contradiction in terms. I hope that all hon. Members will tell the world not what they think their constituents should be given by Government but how their constituents will match and outclass their foreign rivals.

5.18 pm
Mr. Geoffrey Lofthouse (Pontefract and Castleford)

My predecessor was held in much esteem and affection in the House. He spoke for the last time in a Yorkshire debate on 23 November 1973. He said: When I first came into this House and we debated the problems of the regions…it was always understood that Yorkshire was a prosperous region. But that is not so now."— [Official Report, 23 November 1973; Vol. 864, c. 1780.]

That was true then and it is certainly true now.

My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) said that he did not want to make unfair comparisons and nor do I. However, as a Yorkshireman I say that the region bears fair comparison. I shall do no injustice to my hon. Friends who represent other regions if I draw the attention of the House to some comparisons. They lead me to the conclusion that Yorkshire is faring unfavourably compared with other regions.

I do not want to bore the House for too long with statistics, but it is right and proper that these points should be made. From May 1979 to March 1981, the rise in unemployment was 63 per cent. in the Northern region, 79 per cent. in the North-West, 59 per cent. in Scotland and 93 per cent. in the Yorkshire region. Gross weekly earnings for males were £120.20 in the Northern region, £120.80 in the North-West, £123.10 in Scotland and £118.60 in Yorkshire—again bottom of the league. There are similar comparisons for female workers, but I shall not go through those now.

Gross domestic product per head was £2,666 in the Northern region, £2,748 in the North-West, £2,767 in Scotland and £2,733 in Yorkshire. I could go on with these comparisons, but I shall draw attention only to the figures for average household weekly expenditure in which, again, we come bottom of the league. Yorkshire is the lowest in the United Kingdom and 10 per cent. below Scotland and the North-West. Regionally relevant public expenditure per head is £507 in the Northern region, £448 in the North-West, £516 in Scotland and, again, Yorkshire is the lowest with £389, which is 25 per cent. less than Scotland.

The most glaring difference is in the regional development expenditure per head. It is £52.90 in the Northern region, £14.60 in the North-West, £29.20 in Scotland and £9.90 in Yorkshire. That figure is a disgrace. Yorkshiremen should not take kindly to it. The Minister of State referred to cricket in Yorkshire and to the coalfields from which the famous bowler to whom he referred came. Yorkshire never believes in giving the other team a start.

Regarding the economy of the region, while we are grateful to have the heart of the country's coal industry in Yorkshire and the employment that it brings, that does not mean that the region has escaped the problems created by the Government's economic policy. My constituency is no exception. Unemployment levels in the Castleford travel-to-work area are consistently above the regional and national levels. The current figure—for May—is 11.2 per cent. overall and 12.3 per cent. among males. In the present recession there have been redundancies in many local industries, including glass, confectionery, chemicals and so on and, of course, our textile industry has not escaped.

However, it is probable that there is a longer-term underlying problem caused by the coal industry reducing the need for labour. Although the coal industry in the Pontefract and Castleford area has an assured role in helping to meet the country's overall requirements, increasing investment and productivity have resulted in a reduced labour force. There is no real prospect of that increasing.

Therefore, the economic problems of the area are not short-term effects of the recession, but they are of a long-term nature. There is thus a continuing need for employment to be created in the area, yet the Government intend to remove its assisted area status in August 1982. Not only will that reduce the area's attractiveness to industry, but it will make more difficult the provision of the necessary industrial amenities and infrastructure which experience has shown must be provided by local authorities in the absence of private sector initiative.

The loss of assisted area status will remove eligibility for grants from the Government under the Local Employment Act and from the European regional development fund, coupled with the severe cuts of local government capital expenditure. It will become almost impossible for the district council to maintain a programme of industrial estate development.

I shall now touch on the environment of the area. The people in coalfield communities pay a high price for the nation's energy supply by way of their ravaged environment. It is accepted that an extractive industry such as the coal industry will create environmental problems, especially by the disposal of waste materials. Nationally, the coal industry produced 122 million tonnes of coal in 1979–80, of which deep mined coal accounted for 109 million tonnes. The Yorkshire coal industry produced about 31 million tonnes or just under 30 per cent. of the nation's total. That is likely to increase substantially.

In May 1979, the National Coal Board forecast an output in the Yorkshire coalfield of 47 million tonnes by 1985. Although that is now probably too optimistic, it gave an indication of the longer-term growth potential. Associated with that general development are a number of specific changes of major significance.

The coalfield is moving eastwards with colliery closures in the western part of the area due to the exhaustion of reserves. The outstanding example of that trend is the development of the Selby coalfield. A dramatic advance in technology, leading to increased productivity per worker and a larger percentage of extraction, is taking place. There are substantial increases in dirt output resulting from high productivity levels, increasing mechanisation and the working of dirtier seams. There is a relatively high output of opencast coal production in the exposed coalfield, which is allegedly to maintain output levels. I shall mention that later because I believe that we should consider whether there is a vast need to ravage the countryside with opencast workings.

The coalfield area bears the hallmark of two centuries of major mining activity. It seems inevitable that the scale and nature of the industry's impact will be greater in the future, particularly with regard to the physical environment. This creates major implications. The manpower requirements of the coal industry are declining. Current employment in the Yorkshire coalfield is about 70,000, compared with about 120,000 in 1961. There is, therefore, a pressing need in many parts of the coalfield for alternative employment opportunities.

There is a continuing need for the reclamation of derelict land, especially to achieve environmental improvements and thereby to improve the area's chances of attracting and creating new employment. It is possible that more colliery spoil will be produced in the next 20 years than has been produced in the past 200 years of coal mining activities in the region. A realistic estimate is that about 500 million tonnes of spoil will be produced between 1980 and 2000. Approved disposal facilities fall far short of that estimated output.

There also appears to be an increasing impact from subsidence. I have personal experience of that. No more than 200 yards from my home is the Prince of Wales colliery at Pontefract, with its new drift mine. It is moving forward. Unfortunately, the housing estates in the vicinity are now bearing the brunt of that.

Although I welcome the development of coal mining, I believe that far greater protection should be given to householders. It is my experience that the National Coal Board genuinely looks on claims in a kindly way, but tenants, particularly council tenants, have little real protection without that sympathy. I hope that the Ministers responsible will consider the problem and give encouragement so that the area is not allowed to become a shanty town, with half the properties falling down.

The creation of new employment ultimately depends on the private sector, but past events show that the necessary industrial amenities and infrastructure to facilitate job creation are likely to be provided only by the public sector and in particular by local authorities. It is vital that the Government support local authorities in the task, both in their public expenditure policies and through the EEC.

Although the recent designation as derelict clearance areas of those parts of the coalfield proposed to lose assisted area status is welcome, this will be meaningful only if the necessary resources are made available to make a real impact on the derelict land problem. Current regulations governing local authority capital expenditure are likely to have an adverse effect on the implementation of reclamation programmes.

There must be a radical solution similar to the Pyewipe proposals for the disposal of colliery waste. The trend towards the increased use of railways and, where possible, waterways to carry the bulk of coal deliveries is welcome and should be encouraged.

The current targets for opencast coal production should be reassessed. The procedures for dealing with proposals for new opencast workings should be abandoned and opencast proposals should be determined in the same way as other mineral applications within the normal planning process.

There is a need for a more broadly based form of financial assistance for deprived mining communities to provide facilities for environmental improvement. The compensation rules and procedures for mining subsidence damage, which I have just touched on, should be reconsidered, and tenants and owners should be given protection.

The Secretary of State should urgently reassess the target for opencast coal output, in conjunction with the NCB and the appropriate trade unions. Legislation should be introduced to improve the compensation rules and procedures for damage arising from mining subsidence, on the lines proposed by the Barnsley metropolitan district council. Opencast coal workings should be brought within the normal planning process for dealing with mineral workings.

Specific assistance should be given to coalfield areas to effect the rectification of environmental damage due to coal mining activities, such assistance to include 100 per cent. reclamation grants to cover all categories of land not in beneficial use as a result of mining operations. There should be grants for the preparation of sites for employment and housing use as part of any reclamation project, grants for the enhancement of the appearance of existing mining operations, and compensation for local communities to provide facilities for environmental improvement to offset the damage caused by coal extraction. This could be based on a financial tonnage levy on colliery spoil tipping within each local authority area, or alternative forms of Government financial assistance.

The related issues of derelict and despoiled land clearance, re-working of old tips and the disposal of new spoil should be comprehensively examined, with the aim of implementing satisfactory long-term solutions both environmentally and financially.

At the beginning of my speech I referred to my predecessor. In the debate that I mentioned in 1973 he said that it was time that the NCB considered transferring its headquarters from Hobart House to Yorkshire. With the advance in the Selby coalfield, Yorkshire will be at the heart of the coal industry, so there is even more reason now to transfer the headquarters to its rightful home.

5.34 pm
Sir Paul Bryan (Howden)

Both Front Bench speakers mentioned the massive capital developments taking place on the eastern side of Yorkshire. On Friday fortnight, I expect, most Humberside Members will be present to see the Queen open the Humber bridge, the largest single span bridge in the world. Forty miles to the west there is the biggest coalfield in Europe, costing £600 million or more. Another vast development that has not been mentioned is the diversion of the railway line from Selby to York, which will cost £90 million. That figure gives some idea of the work involved. These great developments will have a major effect on the community in the surrounding districts.

The Humber bridge represents all that is best and a good deal of what is worst in our industrial engineering. The best is reflected in the innovation and design, which make the bridge one of the industrial wonders of the world. Over the next few years, hundreds of sightseers will go to see it. The worst is reflected in the fact that the bridge took over twice the scheduled time to build and cost three times the original estimate. Without going into all the reasons, industrial relations was clearly a main cause. If we cannot find a cure for this British malaise during the recession, we shall not come out of it sufficiently strongly to make a real impact on unemployment.

I am bound to report that there is not unanimous local enthusiasm for the bridge. One still hears cynical comments locally about "a bridge from nowhere to nowhere". I do not share that view. I believe that the bridge is the final side of a box of motorways that will make a tremendous difference to the area. Apart from the bridge, we have the M62 from Hull, crossing the M1 and the M6, to Liverpool. Below the Humber we have the M1(80), connecting with the M18, again connecting with the whole motorway system. We could not be better served with roads. Historically Hull has developed with bad inland communications, and it is difficult to overestimate the possibilities for that fairly undeveloped estuary with these wonderful new communications, plenty of space and a buoyant population.

One major deficiency remains to be put right. We have no major trunk road from Hull and the bridge to Teeside. Without the bridge we already have plenty of heavy traffic from Hull docks making its way north on inadequate roads.

What route will the traffic take to Teeside now that the bridge is built? It has two choices. It can go on the A1034 through Market Weighton, thence to York, and bypass Thirsk, but Market Weighton already has a savage traffic problem. The great juggernauts from Hull trundle through the village high street, and accidents are reported to me every two or three months.

I suppose that I must have brought at least six delegations from Market Weighton to see successive Ministers about the bypass, which is now promised in about four years' time. I should therefore like a guarantee from the Minister that the Department of Transport will monitor the extra bridge traffic going through Market Weighton to see whether the increase makes the case for a bypass even stronger.

The second northern route that traffic can take is the A63 via Howden and then on to the Al9 past Riccall and Barlby and up to York. Once again, there is a problem. We have been waiting for a long time for a Riccall and Barlby bypass. That, too, is due in three, four or five years' time and will no doubt be put off unless we can stress once again the amount of extra traffic that will go through there. That will be further increased because coming up from Selby will be all the extra traffic generated by the new coalfield. The A19 below York, now a small, winding road, will need dual carriageways in addition to the Ricall—Barlby bypass.

In general, I am a supporter of the Government's financial policy, but I am sometimes a little puzzled by the criteria that seem to decide where money can and cannot be spent. Around Selby, it can clearly be spent generously on anything to do with the coal mine. For example, the road from the main A19 to the Stillingfleet pit is a magnficent highway—it is rather more ample than necessary—but no money is available to replace the Selby toll bridge. It is presumably paid for out of a different purse.

This antediluvian edifice, built in 1792, is to be the gateway to the greatest mine in Europe. That is too ridiculous to be true. On a summer evening one sees a queue a couple of hundred yards long as everybody waits to pay 4p to cross this rickety old bridge. The arrangements are such that four of the pits are on one side of the bridge, while Gascoyne Wood and Wistow are on the other. Moreover, it seems that most of the housing will be south of the river and most of the pits north of the river. When the mine really gets going, therefore, the bridge will be bursting at its seams with mine traffic. I hope that the NCB will use its influence to point out the inevitable consequences of the proposed developments.

I deal briefly with the social consequences of the development of the Selby coal mine. About 4,000 miners will come into the area, which will mean about 10,000 people. So far, relations between any incoming group and the local population have been extraordinarily good. Co-operation has been friendly and good in every way. The NCB has gone out of its way in its public relations, and a splendid man called Mr. Forrest has taken a great deal of trouble to keep local people informed. So far all goes comparatively well, but by the very nature of things there are bound to be frictions in certain areas.

One potential area of difficulty is housing. At the moment, owing to cuts and so on, very little council housing is being built, although I am told that the allocation is above the level of other authorities. At the same time, quite naturally, a large number of houses are to be built for the miners. A situation can therefore arise in which local people feel deprived of housing while miners come into subsidised public housing in considerable numbers. Something should therefore be done to soften the impact of this situation.

Mr. Martin Flannery (Sheffield, Hillsborough)

The hon. Gentleman said a few moments ago that he supported—he implied that he was quite enthusiastic about it—the Government's policy. The Government have almost wholly cut out council housing. They are even flogging houses at half price and taking them off the list. The hon. Gentleman now talks about the great coalfield being opened up, for which we need miners—and they, of course, need houses. From the way he speaks, he seems to regret that, as compared with the housing of local people. What does he want to do with the miners—put them in tents?

Sir Paul Bryan

I am trying to be co-operative in my speech. I believe that everything reasonable is being done for the miners and that they themselves are not dissatisfied. I am merely trying to explain that this is bound to cause friction with local people if they feel that people established in the area for a long time cannot get housing while incoming people can. I am trying to point out methods by which we might improve on that.

Mr. Flannery

It is all the Government's fault.

Sir Paul Bryan

I believe that a great deal more could be done to ease the way for miners to buy their houses, and I believe that the NCB is keen that they should do so.

The main occupation in my constituency is agriculture. On the whole, agriculture in Britain, including East Yorkshire, does not seek help, because it is highly efficient in terms of productivity, quality, labour relations and so on. At the moment, however, two sections of agriculture are in danger of being put out of business through no fault of their own. They are the poultry and the glasshouse section.

The poultry section faces a problem which I do not think the Government have met before. France has openly declared that it intends by means of subsidy to promote its farming and to establish it on such a scale as to dominate farming in Europe. The French say that they are doing that to get foreign exchange to pay for energy supplies. That is all very well, but let us consider the effect that such a policy has on say, our turkey production.

A turkey factory, if that is the correct term for a place where turkeys are produced, has been established in Brittany at a cost of £6 million, a large proportion of which was provided by subsidies of one kind or another—capital subsidies, local subsidies, unemployment subsidies, training subsidies, and so on—resulting in a situation in which the entrepreneur hardly has to produce any capital at all. That factory can produce as much as the entire British turkey business. One really cannot live with that. The British turkey business is young but highly efficient, but I do not see what can be done about this unfair competition without Government intervention. The Minister of Agriculture, Fisheries and Food has shown understanding and has made a great row about it in Brussels, but time is passing and the poultry sector is suffering.

Last week, Ted Kirkwood, who comes from East Yorkshire and is chairman of the NFU poultry committee, speaking after its meeting, said: We are seeing our market decimated by imports subsidised by unfair aids. Prices in all sectors—eggs, broilers and turkeys—are being hit hard. Returns are well below the level needed to maintain viable business, and the situation in the broiler sector is particularly serious with processors going to the wall. It is imperative that the Minister announces what the Government is prepared to do for the industry both to overcome the immediate crisis, and to generate re-investment for the future. Otherwise the industry will shrink so drastically that our market becomes entirely dependent upon foreign produce. Those are not the moanings of bad farmers, but the genuine grievances of highly efficient men in agriculture.

The glasshouse industry, for different reasons, is in a similar plight. The Dutch gas price for heating greenhouses is equivalent to an oil price of 26.57p per gallon. The British producer has to pay 46p per gallon. The Government give a 5p subsidy to the British producer, but he still cannot compete. Those industries do not seek help, but they wish to be defended from other countries. If the French can be stopped, all well and good. If nothing is done, those two industries will not only suffer, but will be in danger of extinction.

In conclusion, I thank the Government for the admirable decision that they made last week in rejecting the advice of the regional health authority that the East Riding should be made into one vast district authority dominated by Hull. The two-authority solution has given tremendous satisfaction and relief to my constituents.

5.50 pm
Mr. Stanley Cohen (Leeds, South-East)

It is clear that many hon. Members wish to contribute to the debate. I shall therefore be as brief as possible.

I make no apology for making possibly parochial comments. As most hon. Members will appreciate, Leeds is basically a clothing industry city. Like the shipping and textile industries, the clothing industry has been sacrificed in the interests of the country's wider economic requirements. That may be acceptable to the community at large, but it probably does not realise the disastrous effect that that sacrifice has had on my constituents and on those in the clothing and textile industries in the West Riding of Yorkshire.

We are entitled to claim that we still enjoy a reputation second to none when it comes to the quality of the clothing and textiles that we produce. I still insist that we produce the best in the world. Our good name still exists, but we cannot compete with dumping by other countries.

My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) in an excellent speech rightly criticised the Government for their failure to invest in and give support to Yorkshire's industries. Although financial support is essential, the Government should also take other steps. Indeed, successive Governments should have taken such steps, and it is a pity that they did not. The West Riding's clothing and textile industries are subject to unfair competition from the Far East and from central and eastern European countries.

My hon. Friend the Member for Bradford, North (Mr. Ford) is not in the Chamber. However, together with other hon. Members, he and I had the opportunity to visit Taiwan at the end of last year. I have referred to that visit before, but I make no apology for doing so again. We went round a textile mill in Taipei. We saw bales of cloth that were ready for dispatch. The words "England—100 per cent. wool" and "Huddersfield—100 per cent. wool" were woven—not printed—into the selvage of the material. That obvious instance of counterfeiting reflects the type of unfair competition that Britain faces. The Taiwanese Government were heavily subsidising the materials being exported from Taipei. The Government should bear such activity in mind.

Our firms and workers are not inefficient or unproductive. Our workers are just as productive as those in any other country in the world. However, they cannot compete with heavily subsidised garments and materials from abroad. I hope that the Government will give that point serious attention.

As a result of our inability to compete, there is massive unemployment in Yorkshire as a whole and throughout the country. My hon. Friend the Member for Attercliffe cited figures which proved that Yorkshire was being hit more fiercely and effectively that many other areas in Britain. About 2,000 jobs per month disappear in our textile industry as a result of unfair competition. It is time that as a nation we said "Enough is enough".

The Minister referred to cricket. We are not playing cricket. This is not a gentlemen's game where gentlemen's rules apply. We face ruthless competition from ruthless companies and Governments that are prepared to undercut us, if necessary, and to ruin our economy. We are talking about survival, and particularly the survival of the clothing and textile industries. We have a tradition. Our clothing, textile, fishing and mining industries have helped to build up our economy. Unless we protect those industries, we shall find ourselves in serious difficulty. We are talking about the livelihoods and future of thousands of people and their families and about the social consequences that will flow unless we take drastic steps to protect them. We should inject more money into the economy, particularly in Yorkshire, and take steps to protect ourselves. We should negotiate with other Governments to ensure the existence of those industries.

I speak with some knowledge of the clothing industry, because at the age of 14 I was employed in it. My family and many of my constituents have been employed in that industry. Firms such as Montague Burton were the giants not only in terms of the European clothing industry but throughout the world. What is happening to such industries? Montague Burton now employs about one-fifth of the number that it used to employ. Many such firms have to use their retail outlets to sell cheap imports from abroad. It is cheaper to sell them than to produce the goods themselves.

It is disturbing to note that foreign firms can buy material in Britain, turn it into suits, export them to Britain and still sell them at a lower price than our manufacturers can buy suit lengths. If that is not dumping and over-subsidisation by foreign Governments, what is? We must deal with the situation. Our retail outlets are not being used to sell British products. To some extent, management may be to blame. To a lesser extent, employees may be to blame. However, Governments are also to blame, because they have not ensured that our industry is able to compete with our foreign competitors.

As a nation we have played the game fairly. However, the time has come to say that if other countries play the game by their rules, we should play by ours. That means that we should seek international agreement. If we cannot get it, we must deal with our competitors just as they deal with us.

As my hon. Friend the Member for Attercliffe said, the Government should inject finance into the area. Previous Governments have not done that, and I am not trying to defend them. However, this Government are probably more guilty than previous Governments, because they have failed to meet their obligations. They have undermined industry, the ability of local authorities to assist it and local development.

I sincerely hope that the Government will take careful note of the anxiety expressed not only by Opposition Members but by Conservative Members. Although the debate has been fairly quiet today, I am sure that the Minister recognises—from our previous debates on this subject—that all hon. Members are genuinely and sincerely worried about this serious problem.

5.59 pm
Mr. Marcus Fox (Shipley)

I shall not follow the hon. Member for Leeds, South-East (Mr. Cohen) down the road of higher public expenditure and his belief that it will somehow solve all our problems.

I listened carefully to the speech of the hon. Member for Sheffield, Attercliffe (Mr. Duffy) and to that of my hon. Friend the Minister of State. The debate so far has clearly illustrated the difference between the two sides of the House.

The hon. Member for Attercliffe said that he wanted increased public investment, but later he said that he would not ask for more brass or hold out the begging bowl. With the greatest respect, that is exactly what he did. Some of my constituents are urging increased public spending in certain areas, but the majority are worried sick about the money that is being pumped into British Steel, British Leyland and British Shipbuilders. They are even more worried as they receive their rate and gas bills, not to mention the increased transport charges that they must bear. They do not see Britain's future prosperity in any way tied to higher public expenditure quite the reverse. The challenge for the House is to get to grips with the burden of public expenditure, so that we can envisage the day when industry can prosper and inflation is down to realistic figures.

I am grateful to my hon. Friend the Minister of State for quoting figures that illustrate the need for Britain to be competitive. My constituents do not fear competition. Other figures can be quoted to show the dangers that Britain faces. For example, between 1975 and 1979 United Kingdom wages increased by 70 per cent., whereas in the United States and Japan they went up by 39 per cent., and in Germany by 27 per cent. During those five years prices in the United Kingdom went up by 66 per cent., whereas they rose by 35 per cent. in the United States, by 27 per cent. in Japan and by 16 per cent. in Germany.

As a result of overmanning—which we all know has gone on for decades—and excessive wage increases, labour costs in Britain during the same period have been 60 per cent. higher than those of our competitors, yet our production has been lower. How can we pretend that our region, which we all serve, can somehow escape the consequences of that sort of folly? I do not pretend that we can. The recession that we now face was inevitable. We must seek to mitigate it and to prepare a firm base for the future.

Of course unemployment is a great curse and Members on all sides of the House want to see the level reduced as quickly as possible, but some of the unemployment that now exists was inevitable, because if we modernise industry—and we have no choice—some unemployment must result. It is no good blaming each other. It is easy to fall back on political arguments and to blame the Government—even Governments of the past.

The proof of what I say can be seen in the fact that the right hon. Member for Leeds, East (Mr. Healey), who for a time served as Chancellor of the Exchequer, was a member of a Committee which in 1976 reported that we could expect 2½ million jobless by 1980. That was one of the right hon. Gentleman's better predictions. He was just about right. Even at that time, the signs were that the current level of unemployment was inevitable.

In agriculture, which includes fisheries and forestry, the modernisation of machinery increased by 28 per cent. over 10 years, whereas manpower decreased by 41 per cent. That has also been true of textiles. Expenditure on machinery in mining and quarrying increased by 28 per cent., whereas manpower decreased by 47 per cent.

We should take this opportunity to debate how we can solve that problem, but in the time allotted there is no way in which we can cover all its facets. However, I should' like to refer to some of the topics that are of direct concern to my constituency. Like many other constituencies in Yorkshire, mine relies a great deal on private enterprise. It contains many small companies, as well as large, that employ thousands of workers, and over the last few years management and workers have striven hard to become competitive.

I should like to highlight a few areas where increased employment can be achieved, even in the present climate. I congratulate my right hon. Friend the Secretary of State for Trade on his contribution to the recent debate on the multi-fibre arrangement. I was delighted to hear from the Minister of State this afternoon that things have been happening in Europe, and from what I have heard, last week could prove to be a good one for the multi-fibre arrangement.

When my hon. Friend the Minister for Trade replied to the debate on the multi-fibre arrangement he listed the measures taken by the Government to help the textile industry, and went on to say: On 1 January origin marking arrangements will come into. force. The Government have strengthened the fraud squad to catch up with textile fraud".—[Official Report, 18 June 1981; Vol. 6, c. 1257.] That will not be enough.

Textiles and engineering are the largest employers in my constituency, but both industries are affected by what I call "unfair practices". I refer to textiles first. Wool-combing and top-making are doing well, admittedly with a slimmed-down work force, but some companies are on a seven-day week. There is considerable demand, particularly in Japan, for high quality cloth such as mohair and pure wool. However, the worsted cloth manufacturers are facing considerable problems.

Many of the problems have arisen because British merchants are importing foreign cloth from all sorts of strange places, including China, and making it up here, as a result of which the garment qualifies for a Union Jack label, which deceives everyone into thinking that it was produced in the United Kingdom.

I know that we have passed legislation that will shortly come into force, but the first step must be to close the loophole by which thousands of metres of cloth come into Britain and are made into garments, which people then buy under the false impression that they are buying British A recent survey conducted by National Opinion Polls Ltd. confirmed my worst fears, because 80 per cent. of those asked said that if they saw such a label on a suit or other garment they would automatically assume that they were buying British, whereas all they would be paying for would be the making-up.

That is one area where the Government must act in the near future. We should be tougher than we were recently when the matter was considered in Committee. It is no good Ministers saying that such a scheme—whereby the origin of the fabric is known as well—cannot be policed, because the industry has already made proposals to the Department about the way in which that could be done. The Retail Consortium, comprising many British departmental stores, could adopt a more patriotic attitude and give its support to the proposals that I have made.

I deal next with engineering. There are problems in Europe about technical barriers to trade. Many of our European partners are not playing the game. The most incredible obstacles are placed in the way of British companies that are seeking to open up markets in Belgium, Holland and Germany. Delay is the name of the game. Our European partners insist on certain quality standards that take years to comply with, but at the end of the day one is driven to the conclusion that they are not really interested in accepting British imports. That is a matter about which I have written to the Minister of State.

Another matter of considerable importance concerns a major company in Bradford, which also operates in Shipley. Many of my constituents are employed making accessories or components for the motor industry. My hon. Friend announced in the House that the Nissan company was looking carefully at sites in the United Kingdom. I believe that there were two in Yorkshire. Many of us are worried about how the Japanese are playing the game of voluntary quotas. When one reads that the number of light vans imported from Japan already is double this year's agreed quota, one is right to ask that before that agreement is signed, sealed and delivered we should be assured about the number of British-made components to go into the car. If that is not done there will be considerable job losses, not because the industry and the company in my constituency are inefficient and do not produce good quality articles, but because the Japanese operation could not be described as free trade.

Mr. Prescott

I have listened carefully to the hon. Gentleman's strong indictment that British industry is overmanned, with high wage costs, but every example that he has given from his constituency is a complaint against unfair competition. Do not high wage costs and overmanning affect the industries in his area?

Mr. Fox

I am sure that that is not the best that the hon. Gentleman can do. At the beginning of my speech I drew attention to figures which show that in general the United Kingdom has suffered from overmanning and paying ourselves too much money. I did not say that the companies were not efficient. One only has to consider ICI and many other companies to appreciate that over the years they have done their best. I realise that Labour Members do not like me to talk about successful British companies, because they are private enterprise companies. I fail to understand why the hon. Member for Kingston upon Hull, East (Mr. Prescott) should be alarmed because I have one or two successful companies in my constituency.

Mr. Prescott

I am not alarmed.

Mr. Fox

If the hon. Gentleman is not alarmed, I do not understand why he drew attention to the matter.

The Triumph Acclaim is now being produced in Britain jointly by agreement with Honda and British Leyland. I understand that the engine is completely Japanese, so at a stroke much of the opportunity for British-made parts has been removed. In the Nissan agreement there are plans for a 1600 cc engine. That could be a major competitor on the British scene. My information is that Nissan has no engine of that size in its present imported cars.

I hope that my fears are groundless, but it has been drawn to my attention that the first Japanese motor industry came into being on a licence granted by Austin. The present home market in Japan of 5 million cars per year was given to Japan, and it then closed the door. History has now turned full circle and we find ourselves working under licence from the Japanese. I do not see why we should not face competition in the spirit that we can win. To do that we must feel that the competition is fair.

All my observations have been about the private sector, where the wealth is created. I make no apology for saying that I want to see extra jobs in the Yorkshire region. Contrary to the notes of pessimism from some quarters, I am delighted that the last two surveys by the Bradford and Leeds chambers of commerce point to an improving position. We are right not to minimise the problems in our area, but we should not exaggerate them.

6.14 pm
Mr. Richard Wainwright (Colne Valley)

I welcome the hon. Member for Shipley (Mr. Fox) putting regional problems into a national perspective. Surely it is accepted on both sides of the House that the diversity of the economy of Yorkshire and Humberside, although the debate has a regional title, reflects the national problems of industry and is therefore of national significance.

I regret that the Minister, in the course of a long speech and without any provocation from the excellent opening speech of the hon. Member for Sheffield, Attercliffe (Mr. Duffy), chose to lecture Yorkshire and Humberside Members on what he regards as the evils of subsidy and the begging bowl. That is not the purpose of today's debate. Even that misjudged contribution could have been forgiven, compared with the Minister's extraordinary impertinence in treating us to a discourse on soaring unit labour costs due to the abdication of this Government from one of their chief responsibilities—to maintain an orderly labour market. To lecture the House about the consequences of the perverse and wilful refusal of the Government to shoulder their duties was brazen indeed.

We have a chance today not to add to the reams of statistics with which the Minister was armed, but to tell the Government of some matters which do not get into the statistics, except, I suspect, into the statistics of emigration. I am told that to many parts of the world emigration from this country is running unusually high. That does not surprise me.

In parts of Yorkshire that I know reasonably well there is a real danger of a serious blow to industrial morale—perhaps for the first time since the last great slump of the late 1920s. A few sleeping giants, which should have been dealt with years ago, have been affected, probably deservedly, by some of the Government's policies. In my experience, the mischief of what the Government are so wantonly doing occurs in the typical medium-sized Yorkshire firm, run with considerable efficiency, which in the last year or two has shown a remarkable unity of purpose from management to the shop floor so that the business and the jobs that go with it may survive. After such businesses have turned out high quality products at keen prices, completed on time, they find themselves unable to sell them, primarily because of the wilful lack of home demand, for which the Government are responsible, and export prices so heavily distorted because of the sterling roller-coaster which the Government refuse to control.

Mr. Tebbit

The hon. Gentleman talks about lack of demand. Has he seen the figures of retail sales recently?

Mr. Wainwright

Inflation at the rate it is running can do wonders to figures for retail sales, but there is a serious lack of home demand. I am surprised that the Minister should be so brazen as to deny that. That would not matter so much if there were fair opportunities to export. But how can small and medium-sized firms, characteristic of the Yorkshire economy, be expected to conduct a successful export trade when the currency on which they depend is on a roller-coaster for which the Government refuse to take responsibility?

Many firms in my constituency are adding necessarily incurred heavy interest charges every few months to their already large overdrafts. They are told that the Government have all kinds of tax incentives for reducing corporation tax. But what consolation is that for a business that is not making a pre-tax profit anyway? I do not ask the Minister to accept my word for all this. I give him a few sentences from the first leading article in, of all papers, today's Yorkshire Post: There are probably millions of workers who are still employed but who are worried sick about their jobs. And there are millions more who are not particularly worried about redundancy, but who are finding it impossible to develop their careers because of the general collapse of recruitment. The jobless, the frightened and the stuck add up to more than enough to turf any Government out of office. It is a long time since I, as a life-long reader of the Yorkshire Post—that shows that I have a very stiff constitution—have found it as firm as that in its criticism of a Tory Government.

Mr. Cryer

It is a Tory paper.

Mr. Wainwright

Throughout his long speech this afternoon the Minister was not able to hold out any hope of recovery to Yorkshire industry. What I particularly resent, on behalf of business men in my part of the Yorkshire Pennines, is the extraordinary Government story that businesses are emerging from this time of trial fitter and healthier. That is almost wholly untrue, for, although they have been forced to make all kinds of economies, many of them are false economies. I do not understand why a business is said to be fitter and healthier when it closes down its apprentice school, when it shuts down its development department because it cannot take the risks of innovating when there are no markets for its innovation or when it closes down most of its investment programme, as is happening in firms which do not happen to be cash-rich at present.

A mood of sour depression is creeping in at all levels, even among the most zealous and courageous people in industry. But now we have a new gospel of misery from the Government, which the Chancellor of the Exchequer has started to orchestrate—that there are to be virtually no pay rises. The significant thing to me and to my hon. Friends on the Liberal Bench is that all this negative stuff is never accompanied by any positive signs.

I was delighted to read what Lord Carr of Hadley said in The Times this morning, rebuking the Government for their failure to come forward with any schemes for increasing employees' share ownership to match the pay restraint for which the Government are so urgently pleading. How can employees be asked to go without increases to match inflation if we do not give them a share in the reserves which their employers—not perhaps of their own free will—are inevitably building up as a result of the workers' sacrifice?

For several years the French have been giving great tax incentives to any citizen who chooses to put a reasonable part of his savings into industrial investment. But our Government have refused to take that hint or to do anything positive on that score.

Mr. Hooley

When the Government produce a scheme to encourage investment on a modest scale, they deliberately rule out the engineer, the scientist or the gifted chap who might have a few thousand pounds to put into his own firm.

Mr. Wainwright

Yes. That is an omission with which I hope we shall be able to deal on the Floor of the House in a week or two.

The Government are also entirely negative in continuing to maintain the extraordinarily perverse tax on jobs and on exports—the national insurance surcharge. One might have expected an eager Conservative Government to rush to repeal a Socialist measure. But, no, the national insurance surcharge remains at its full rate of 3½ per cent. It is a definite penalty on employing people or on exporting goods. As has already been mentioned, there is also the failure of the Government to react sufficiently urgently to the dilapidation of many key public assets All Governments are the stewards of our great publicly owned assets, but this Government are content to see our railways, telecommunications, sewerage system and the rest simply decay and falter through lack of reasonable modernisation. What is offered to those services is given grudgingly and in such modest amounts that they cannot do any really long-term planning.

Mr. Tebbit

Would the hon. Gentleman define modesty in terms of the amount of money made available as external financing limits to British Rail and to British Telecommunications? It would be interesting to know what the hon. Gentleman considers to be a modest amount of money.

Mr. Wainwright

In relation to the need for both replacement and modernisation, the sums that the Government have made available are seriously inadequate. A business requires not only to maintain its assets but to develop them. As I have said on several occasions in the House in the past nine months, more than anything else the economy needs an injection of at least £3 billion to swell demand and to get private industry going, with the economy protected by a sustainable prices and incomes policy.

Much has already been said—and quite rightly—about the need to stimulate small businesses. But the Government, even there, are slow to act. In my constituency people may, for all I know, be conspicuously honest in their dealings with Government offices, but those who, having lost their employment, have set out with a great deal of guts to be self-employed for the first time in their lives complain to me that, as soon as they start to fend for themselves and to distribute a few circulars saying that they are in business, they are thereby endangering their unemployment benefit. Although they have not yet built up any business worth talking about and are in the exploratory stages only, they are written off the unemployment register as having become self-employed. If the Government want to encourage enterprising characters of that sort at a time when people simply cannot get work, however hard they try, they ought to introduce some humanity and flexibility into the regulations.

The Government are sapping the confidence of people in industry, wherever they work and whatever the size of their unit. Until the Government change their policy and restore some degree of industrial confidence, the industrial position of Yorkshire and Humberside is bound to get worse.

6.27 pm
Mr. Michael Shaw (Scarborough)

I was greatly interested in the speech of the hon. Member for Colne Valley (Mr. Wainwright), who dealt with the problems that exist in his constituency and in the West Riding. I know many of those problems from my own personal and professional experience. I hope that he will excuse me if I do not follow him into the details of taxation. Due to the machinations of the House, I cannot at the moment discuss the details of taxation.

With regard to the hon. Gentleman's general observations, I feel that he has not taken into account the way that history has at last caught up with us. If we had not grasped the nettle—changing my metaphors rapidly—we would have been in a very serious mess. The difficulty is that, because we left it so long, the acceptance of reality was bound to be and has been painful.

Like others, I talk to business men in my constituency and to people on the shop floor. People over a wide area tell me that things are hard and that they are suffering, but they recognise that it had to come sooner or later, and they accept it. I do not think that there is any lack of hope for the future, but there are still some very difficult problems to be solved. I fully understand the tremendous problems which have been raised in the debate, and I would not want to treat lightly the experiences mentioned by various hon. Members.

I shall deal with the subject of small businesses, which the hon. Member for Colne Valley raised, later in my speech, when it will fit more naturally into it.

I wish to speak about three matters only. They relate fairly closely to my constituency, Scarborough, and particularly to the Yorkshire coastal area. The first is fishing. We all know the problems that have faced the fishing industry for many years, going back to the problems that we had with Iceland. It is a tragedy that agreements have not been reached that can provide legitimate hope for our fishermen.

The fishing industry is undoubtedly going through a difficult period—even worse perhaps than merely financial. Not only is confidence in the present position almost non-existent, but there is a rapidly growing lack of confidence in any future for the industry. That is not only sad but wrong. It is understandable, but it is wrong. What we need—here I speak for the inshore fishing fleet rather than for the deep-sea trawlers, which are in a more difficult position—is a fair agreement within the Common Market, which, now that the French elections are out of the way, we stand a good chance of getting. It will be difficult, but in my right hon. Friends the Minister of Agriculture, Fisheries and Food and the Minister of State we have two of the best negotiators that we could possibly have, and I wish them every success in their current negotiations. The future of the fishing industry depends on their success. I am sure that they will succeed and justify our confidence in them.

More than that, if we can get a fair and reasonable profit in sight for the fishing industry as a result of the terms that are agreed, and if we have proper exclusive and conservation zones over which we have control, ports such as Scarborough will have a good future for their fishing industries. I should hate to see the confidence die away. We are going through difficult times, but confidence in the future should be maintained and preserved so that we can take advantage of the opportunities that I am sure will exist for the industry in future.

Tourism is the second industry about which I wish to speak. There have been big changes in the requirements of visitors to our seaside towns. By and large, certainly in the North, there is traditionally a very short season. So we have both the shortness of the season and the changing requirements of the visitors with which to cope. It is not sufficient to provide good beaches and bathing facilities for the kids. Today, much more has to be provided.

We must look carefully at the demands of the visitor on our resorts. First, he wants comfortable hotels. More than ever before, hotels should be treated like any manufacturing industry with regard to taxation and allowances. Here, again, I am constrained from going into detail, for reasons that the House well knows. However, I have made important speeches on that subject so many times that hon. Members will recall my views. I still hold to the opinion that I have expressed so often.

Besides that, visitors come to the resorts in their own transport and, as a result, want to get around. We must build up facilities so that they can go visiting and sight-seeing for the day. We must provide good amusement arcades. theatres and cinemas, but also make sure that facilities in our national parks and other such places are tip-top and ready to receive visitors. In Scarborough we provide many of those facilities in increasing measure.

There is one facility that we do not make the most of. I refer to golf courses. In America, golfing holidays—package tour golfing—are a popular pastime and vacation. We have golf courses on the East Coast that are a great attraction to golfers and I should like to see more use made of them as a holiday attraction. My hon. Friend the Member for Howden (Sir P. Bryan) has a world-famous golf course in his constituency near to Scarborough. We have two fine golf courses of our own in Scarborough. Package holidays with fixed terms for play on all the golf courses round about would be a great incentive for people to come to the area.

The conference trade is the third industry about which I wish to speak, because more and more we must look to that trade. In Scarborough, we are doing our best to provide up-to-date, modern facilities for conferences of all except the very largest sizes. No one regrets more than I do that we do not have a sufficiently large centre in which to hold the political conferences.

Mr. Tebbit

Scarborough can meet the needs of the Liberal Party and the SDP.

Mr. Shaw

I was talking about the major political conferences. We have plenty of halls to cope with all the demands of small conferences.

The jewel that we have in Scarborough is a fully restored and refurbished spa. I give my personal thanks to my hon. Friend the Minister of State for his help in preserving something of real value to the history of Scarborough and Yorkshire and for transforming it into a modern conference centre.

Mr. Cryer

With public money and subsidies.

Mr. Tebbit

I am grateful to my hon. Friend the Member for Scarborough (Mr. Shaw) for his comments. They enable me to make the point that that was an example of well-judged public expenditure that showed a good rate of return. That is the criterion on which we work. Not all public expenditure is bad—no one has ever claimed that—but it has to show a good rate of return.

Mr. Shaw

The point is that, first, we needed an up-to-date conference centre and, secondly, we had a historic building that everyone agreed should be preserved, but to try to combine the two in everyone's interests cost extra money. I am glad to say that everyone worked together and produced a wonderful result. We now have a conference centre that is second to none. It will be of real value both to Yorkshire and to the country as a whole.

There is room in Scarborough, as in many places, for the development of small industry. It is right that the hon. Member for Come Valley should have referred to this matter. Like the Government, I believe that by helping people who want to set up their own business to get off to a good start, we shall contribute towards a nucleus of firms that will one day take the place of some of the ailing giants. Like the hon. Member for Come Valley I have worked in many firms in Leeds and elsewhere. The golden touch was not on all of them. The time had come for change in many respects. I am not, of course, referring to all firms. There is, however, no doubt that change had to come. The young companies have to be encouraged.

A number of small businesses in my constituency started as family firms. Dale Electric, for example, is growing into an international firm of tremendous strength. Its profits are down, like so many firms, but it is competing and fighting back. The firm does not regard this period in our economic history as anything other than healthy, if difficult. It has opened another factory in the Leeds area, if my memory serves me right. That shows how progress can be made against difficulties.

Other factories are admittedly having to slim down. They are nevertheless ready for the expansion that is bound to come in the long term. An example of how small industries can develop is the company in my constituency that has bid for a contract never previously let to private industry. It is a family firm in Scarborough that has developed a new type-setting system—probably as advanced as any in the world. It has secured the type-setting of a third of the United Kingdom's telephone directories. As a result, it can now seek more work throughout the rest of the world. This is the type of small development to which we can look in the future for the revitalising of the whole of industry.

I have referred to some of the more optimistic signs of the industrial scene. There are, of course, difficulties. One difficulty, I am bound to say, arises from the burden of rates. Scarborough council has done its best over the years to restrain the increase in rates. For many years, rates were not increased at all. I am criticising the Government because I want them to change their approach. Ministers have been good enough to arrange to meet a deputation to discuss the issue. I do not know whether anything can be done, but at least we are discussing the issue. It does not seem that, in working out the new grant system, proper recognition has been given to the problems of coastal resorts. Scarborough faces the cost not only of advertising itself as a resort, but of dealing with coast al erosion—factors that have been undervalued.

I can understand that a local authority should be penalised for undercharging rents to the extent that its rent account is heavily overdrawn. However, it is difficult to understand why an authority that has been successful in keeping rents low and has established a substantial surplus on rent income account should equally be penalised. If, as a result, rates are forced up substantially, an artificial burden will be placed on firms that seek to become established in the area.

No one denies that the country is going through a difficult period. However, with signs that things will shortly start to improve, the country will find itself in a far better position to take advantage of the opportunities that will arise.

6.45 pm
Mr. James Johnson (Kingston upon Hull, West)

I congratulate my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) on his first-class speech. I listened with equal care to the speech of the Minister. The Minister and I have only one thing in common: neither of us was born in Yorkshire. At times he was flippant. At other times he spoke like a sixth-form master lecturing the class. The leopard never changes its spots. I could imagine, closing my eyes, that the hon. Gentleman was once again sitting below the Gangway, up to his old behaviour in his old bad days in Opposition.

The job of an Opposition Back Bencher is to tell the Government how bad they are. In some ways, the Minister is efficient. His leader is also efficient. However, the Government are diabolically led. If he goes anywhere in Yorkshire, he will be told the same. His speech contained nothing of any cheer for Yorkshire hon. Members—in fact, the reverse. My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) gave statistics about the facts of life in the North, the North-West, the North-East, Scotland and Yorkshire and Humberside. Those figures show that we are the worst off. Yet the Minister sat dumb and did not even acknowledge that the figures were correct.

Like our sister areas—Leeds, Sheffield and elsewhere—Hull and Humberside is experiencing a bad time. In fact, the people of Hull are at a low ebb. I have always been an optimist in public life. There is, however, an old definition that a pessimist is simply a well-informed optimist. I know too much about the behaviour of the Government to be an optimist. I am deeply pessimistic about the future of our national economy. Figures speak volumes. I have the bulletin Employment Monitor issued by David Gill, director of planning for Humberside county council. It contains sheaves of statistics. I should like to boil them down to about four.

In May 1979 the unemployment rate for Humberside was 6.9 per cent. By May 1981 it had gone up to 16.1 per cent.—an increase of 133 per cent. In addition, redundancies are legion and have taken place in nationally known firms, such as Metal Box, Birds Eye, Smith and Nephew, Reckitt and Colman and Fenner's, as well as in the port and the docks board.

There has been much publicity about the dismal, doleful dumps into which our deep sea fishing industry has fallen. We are suffering death by a thousand cuts because of the pantomime over the EEC common fisheries policy. We cannot get anything definite, and nor can Scarborough, Bridlington, Grimbsby, Fleetwood or any other port. We are all in the same boat.

Let me encapsulate the position on Humberside. The number of jobs dependent on the deep sea fishing industry has fallen from 14,000 as recently as 10 years ago to fewer than 5,000 as a result of the loss of fishing grounds off Iceland and Norway and competition with EEC countries. Many of our so-called sister States—not only the French, but those in Scandinavia—are believed to be fishing beyond the strict catch quotas.

The city council, the industry and the unions are fighting to the death in Hull. A consortium of owners, including Tom Boyd, unions, including the TGWU, the AUEW and the GMWU, and the city council own the Hull Fish Landing Co. But one of our biggest enemies is the chairman of the British Transport Docks Board, Sir Humphrey Browne. He is fixing charges that have resulted in a Norwegian vessel being able last week to dock and land fish more cheaplythan it could in the Albert Fish Dock. The mayor has led deputations to complain about the artificially high charges in the dock. We fear that if that sort of thing continues the fish dock may be closed in August when the House is in recess. I want the Minister, who is listening carefully, as always, to give Hull Members an assurance that there will be a Minister available to see us if there is any question of closure of the dock.

Some of our difficulties are due to the EEC, but others have been caused by the cod wars and the difficulties with Iceland and the United Nations conference on the law of the sea, with its insistence on national limits, which would deny us access to Icelandic, Norwegian, Soviet and Canadian waters. All that means that the Government must fight harder inside the EEC to get a better settlement, with third party agreements so that we can get bigger quotas.

I am not optimistic. I believe that we shall have the utmost difficulty getting anything like a decent common fisheries policy. Indeed, we may not get one at all. There is not long before the 11 years, period expires, and we shall face the fearful prospect of Dutch, Danish, Belgian, German and French vessels fishing up to the high water mark of the East Coast of Yorkshire and all round the coast of Britain.

The Government must do something. The Minister is looking much more serious than he was during his speech. It is a serious matter for us on Humberside. There is deep inspissated gloom on Humberside, but it is absurd for us to be totally gloomy. The Queen is coming to open the new Humber bridge on 17 July and, according to some reports, at the weekend there were queues of traffic stretching from Boothferry to Goole.

I believe that the opening of the bridge is the most important event in Hull's history. It is already taking £1,000 an hour, crazy though that may sound. Vehicles are passing over the bridge in their thousands and there is general acceptance that the magnificent bridge will give a much-needed boost to the economy of both sides of the Humber and will complement the magnificent motorway network.

However, there are some, even in the House, who live on the south bank and speak for the people there, who cannot yet accept that the bridge exists for their benefit as well as for the benefit of those on the north bank. I appeal to my colleagues in the House, whether from Grimsby, Scunthorpe, Immingham or Louth, to realise that it is time to stop talking nonsense about white elephants and claiming that the bridge goes from nowt to nowt. Yorkshire Television was guilty of the same error in a progamme broadcast a few days ago.

It is time that people got away from nineteenth century attitudes and started to realise that the bridge benefits those on both sides of the river. I have been told that a Grimsby merchant spent £2 to cross the bridge and sold a ton of fish on the north bank. If more people were to do that, we could compete not as north bank against south bank but as British citizens working together to lift ourselves off the bottom. I appeal to what I call the fifth column to stop perpetuating nineteenth century chauvinist attitudes of "Yellow Bellies" on the south bank and "Yorkies" on the north. That has no place in a modem society, particularly when we have to pull ourselves out of the dumps. This is not a party issue. Both sides have been guilty and I hope that Yorkshire Television will stop inviting those who speak in that vein to appear on its programmes. It does no good to anyone.

The bridge is the largest and finest single-span bridge in the world. It is elegant against the skyline, a thing of beauty and a joy for ever. Let it be an inspiration to all Humbersiders and Yorkshiremen. It should do much to dispel the malaise that has afflicted us for so long.

If we had a general election and the defeat of this abominable Government, we could expect better days for Hull and Yorkshire. We mean to have them, but we shall not get them while the Government Benches are occupied by the Conservative Party.I close with the memorable words that I heard Nye Bevan say many years ago to my party—"We have nothing to fear but fear itself'.

7 pm

Mr. Robert Banks (Harrogate)

I am grateful to have this opportunity to intervene in this debate, and I shall endeavour to be as short as possible, in view of the large number of hon Members who I know wish to participate in the debate.

I very much regret that the debate today is entitled on the Order Paper "The problems of the Yorkshire and Humberside region", because I do not think that we want to sell Yorkshire and Humberside on its problems. Therefore, I do not intend to talk about the problems which we all know about. It will not make any difference at all whether they are spoken about or not, and I personally think that the best thing that we can do to serve Yorkshire and Humberside is to talk about the success and the progress that many companies and enterprises are having.

I have detected that there are some signs of trade improvements. It is not sufficient to say that there are to be general improvements or that we are coming out of the recession, but there are certainly signs amongst companies that I know very well that point towards an upturn, however small, in trade conditions.

I am very grateful to my hon. Friend the Minister of State for referring to the success that small firms are having and that we are having generally in getting small firms set out on what we hope will be a long career towards becoming larger and more fruitful enterprises. It is interesting, though, to add to some of the statistics that he gave that in November 1978 the office in Leeds was receiving 788 inquiries from small firms, and in March of this year the total number of inquiries had risen to 1,775. I think that this reflects some credit on the Government for the enormous impetus that they have given to people who wish to set out and start up their own company. I do not think that there has ever been a stage in our history to which anybody can easily point that shows a greater desire from all sides—every conceivable authority—to give as much help as they can to people who wish to get a firm on the road.

Another factor on which we can congratulate the Government is that interest rates have been held down. I am not saying that they are as low as anybody would like them to be, but, with high interest rates in America and in other countries, we are particularly fortunate that at this particular moment our interest rates have been held to the level they are. We have seen the value of exchange rates change downwards, and that is something that many firms have been asking us to do for a very long time. Now that it has happened, I think it is quite justified for us at least to point to that as some success, because industry has not been quick to come off the mark and congratulate the Government on what has happened and on preventing the situation from getting either too bad or too good.

I turn to my own home front in Harrogate and refer immediately to the conference centre, which is now nearing completion. My hon. Friend the Member for Scarborough (Mr. Shaw) spoke in glowing terms about the conference centre which exists now in Scarborough. He said that it was second to none. That is an accolade that he has given his conference centre, but I have to warn him that it will be a very short period in which he will be able to call it second to none because Harrogate intends to take the first position, not only in Yorkshire but in the whole of the North of England.

Too many people too readily criticise and complain and condemn the scheme of putting up a very large and impressive conference centre, because that centre will not only attract people from the whole of the United Kingdom for conferences, exhibitions, seminars, trade fairs, and so on, but will serve to attract people from Europe and on a wide international scale. We have a number of companies in Harrogate that have international connections, and they, I believe, will derive great benefit from the conference centre, because it will be of the very first-class quality in the surroundings which it offers and in the services which it provides. It is an asset to the whole of Yorkshire.

Whenever one has had an opportunity of travelling abroad and has perhaps attended a conference outside the capital city of that particular country—I am thinking of France, Germany, and so on—one has been immensely impressed by the facilities and the quality of life in provincial towns that one is thinking about. Here we are now putting Harrogate on the map to achieve just that and to compete with those centres in Europe, and compete successfully, I have no doubt.

When the conference centre is opened in the autumn, I imagine that we may well be subjected to the road chaos which the hon. Member for Sheffield, Attercliffe (Mr. Duffy) referred to concerning the Hull bridge. I hope that it is not as bad as that, but obviously we shall welcome people coming to look at the conference centre. On the subject of roads—the Al passes straight through my constituency—I am particularly pleased that we are now to have improvements undertaken to the Al, though a great deal of work still has to be done before those improvements can actually start. But it is long overdue, and it is a form on relief on the traffic between Wetherby and, further north, Dishforth, which is particularly dangerous at times. I welcome very much the decision of the Minister to go ahead and get on with this particular work.

Industry faces a very great challenge in Yorkshire, and nobody would deny that. But so, too, do our farmers. They, I think, have great confidence, as I indeed do, in my right hon. Friend the Minister of Agriculture, who has shown terrific guts and determination in getting a fair deal for our farmers in the EEC Commission. Their incomes have dropped, but this is something which the whole of industry has had to contend with, so they are taking their share of the difficulties that the country is in. But I think we are all impressed by the determination and the sense of wishing to work that much harder to pull ourselves out of recession.

In Yorkshire we have a very good no-strike record, but it would be foolish of us to delude ourselves into believing that we do not suffer from the problems of industrial relations where there are restrictive practices. I know of a company in Yorkshire which had a piece of equipment lying idle in a factory for seven years because the unions Would not allow that machine to be brought into use because one man's job was to be displaced, although he was assured of employment in the firm.

Those attitudes are deep rooted throughout the whole of this country, and where they crop up there has to be a new approach, and I believe that what we have to work for now is an approach between management and unions to sit down and decide where they are going, because there is only one way to go and that is to achieve greater productivity, greater competitiveness and greater success for that particular company.

On the subject of wage restraint, I have always held the belief that if the company is making profits—the good old-fashioned term "making good money"—then it can afford and should pay its employees good wages. I think that we should not allow ourselves to be swept along by a tide which restricts wages in the private industrial sector to a point which diffuses enthusiasm to progress the company as a whole and to ensure that the highest possible productivity is achieved and in return people are paid way over the average or whatever the company can afford to achieve that. I agree with my hon. Friend on the Front Bench when he talks about restraining Government cash hand-outs to industry. I know that it is very easy for any firm or any individual to call on the Government to produce money to get that firm out of its problems.

I was impressed, as was my hon. Friend the Member for Shipley (Mr. Fox), with the rather strange speech by the hon. Member for Attercliffe, who, on the one hand, I thought was giving a list of depressed areas, which was in effect a demand for the Government to produce development aid for those areas, and then ended up by saying that he was not referring to the begging-bowl mentality. So my opinion was slightly twisted by that sudden change of tune.

Mr. Duffy

I was referring to public investment.

Mr. Banks

Well, I misread the hon. Gentleman. I understood that the investment that he required to see was Government grant aid. I am entirely in favour of the Government being selective in the aid that they give to those areas which have been hard hit and which need aid to pull themselves together.

If we are to dole out aid to companies which are not in those particular zones but which request aid, we have to accept the consequences of higher taxation and all the other consequences that go with giving aid on that basis. Not least one of the consequences is that the firm which obtains cash aid from Government often believes that after a year or so it can go back to Government and will in fact get further aid from the Government because so much has gone in already that the multiplier effect comes into play and that to preserve the original sum of money put into the coffers of that particular firm the Government will give way and give further sums so as not to lose what was already put in or even, indeed, not to lose credibility on the judgment that was originally made.

Mr. Hooley

Has the hon. Gentleman ever speculated on how many hundreds of billions of dollars the American taxpayer has put into its private industry through the defence and space programmes?

Mr. Banks

Well, of course defence and space programmes are immensely important to industry. What has always amazed me is the chorus from the Opposition Benches that demands that cuts in Government expenditure on defence industries should be made without any relevance at all to the consequences for employment if those cuts are made. We have in fact seen in the last seven or eight years certain cuts being made and jobs being lost and the prospect of getting overseas orders being lost at the same time.

I think that one further point is that when the Government put aid into a firm it is often the cue for employees and their union representatives to load into that company as many personnel as they possibly can because they see it as a means of a Government subsidy and they feel "Well, if that is the case, we want to ensure that we get as many people into employment in that company as possible". There have been examples of this, not as it so happens in Yorkshire, but elsewhere. I think that that is another reason for being very hesitant indeed to put aid directly into companies.

I turn finally to one point that is important in regenerating our industry and that is to produce and create the environment which will make it attractive to those people who are going to bring their companies to Yorkshire and to make the best of what we have got. We certainly have the best scenery and the best country that one can imagine in the whole of the United Kingdom and the whole of Europe—certainly in North Yorkshire and elsewhere, and in South Yorkshire, too. It is not just an area of smoke-scarred towns in deep depression. It is an area which is modernising itself, it is an area which is tackling the problems and it is an area which offers immense attractions for people who wish to go there, settle there, and live there and conduct and expand their businesses.

We wish to see a future which holds for companies the opportunity to take advantage of the situation when we come out of recession, because that will be the spring effect. We shall turn to our companies to ensure that full advantage is taken of the new climate which will inevitably come. When it will come, I do not know, but it will come and we must be prepared and get on with the job of ensuring that we take full advantage of it when it comes.

7.15 pm
Mr. Stan Crowther (Rotherham)

We have just been assured by the hon. Member for Harrogate (Mr. Banks) that whatever is said in the debate will make no difference to the problems. That is a little disconcerting. On reflection, and remembering the Minister's negative response to the excellent speech of my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy), I am bound to conclude that the hon. Member for Harrogate is right. Nothing will shift the Government from their attitude. We can talk and talk about the problems, but the talk goes in one ear and out the other. Nothing will move the Government. That is the tragedy.

The recession, or slump, has two noticeable aspects. One aspect, which has been noted widely by commentators, is that the United Kingdom has been hit harder and more deeply than any other developed country, for a number of reasons. The main reason is that the other countries have Governments who are concerned to safeguard their industries.

The second aspect is that, within the United Kingdom, some areas have been hit harder than others. Although the growth in the unemployment rate is higher in areas that have not suffered much in the past, the areas that are suffering the most hardship and deprivation today already had a high level of unemployment before the recession began. Many are in the Yorkshire and Humberside region.

In the 1960s unemployment in Rotherham reached 4 per cent., and we were alarmed. We wrote to the Government saying that the unemployment level in Rotherham was equivalent nationally to 1 million people being out of work. When 1 million people were out of work, the level in Rotherham was 7 per cent. As the national total has risen, the gap has widened. Areas such as Rotherham are always affected half as much again as are other areas. If the Rotherham unemployment figures were applied throughout the country, almost 4 million people would be on the dole. That is the proper way to regard the local problem.

Nothing will be done about the problem so long as the Government are wedded to the concept of the free market economy. Thai is what caused the problem. We shall not find a solution with that philosophy. Unfortunately, regional policy, as it has been operated in the last 20 years, has never been much different, whichever party has been in power. It has been based on the same concept—the idea of financial inducements and negative control of industrial development certificates. Policies have varied only in the size and nature of the inducements and the toughness of the IDC policy.

The policies have been more effective at some times than at others. The most effective period, certainly in my constituency, was from 1968 to 1970. As a general rule, regional policies—even at the best of times, and even when the economy is thriving—have never been more than 50 per cent. effective if measured by the number of jobs created to replace those that have been lost. That is how those policies should be measured.

Let us assume—it may be a rather wild assumption in the present circumstances—that one day, sooner or later, our economy gets back on its feet. I appreciate that that will require either a miracle or the return of a Labour Government. Even if and when it happens and our economy once more expands, there will still be the old problem of regional imbalances. Some parts of Britain will still have intolerably high levels of unemployment, while others will return to a booming condition.

It is obvious to anyone with half an eye that the great traditional industries of Yorkshire and Humberside will never again provide the employment opportunities that they provided in the past, however buoyant the economy may become. If the demand for British steel reaches the peak levels of the past, the 13,000 jobs in that industry that have been lost in the Rotherham area will not be recreated. No doubt we shall gain some new jobs, but most of the jobs lost have been lost during the process of modernising the industry and making it more productive. Those jobs will not come back. They have been sacrificed for ever in the cause of technological advance.

What can a future Government do—I cannot say this Government, because they have told us that they will not do anything—to create new jobs to replace those lost as traditional industries become more modern and productive? There is a national responsibility, because the nation is gaining from the improvements in the productivity of our traditional industries, such as steel. There is no question about that. The nation must accept some responsibility—through the Government, through the National Enterprise Board and through agencies that have not yet even been invented—to create new growth industries and new employment. Those industries must be taken to the places where people need them. That may appear to Conservative Members to be a radical approach. No doubt it is. In a word, it is Socialism. But that policy must be adopted by a future Government if they are to solve the regional problem as it affects Yorkshire and Humberside and the other regions of Britain.

I do not believe that we can leave the fate of Yorkshire and Humberside to the mercies of the free market economy. Essentially, that is the difference between the Labour and Conservative Parties. The Labour Party is committed to establishing development agencies in the English regions. I do not know precisely how they will operate—I do not think anybody does—but there is much work to be done. At least the Labour Party is starting that work, whereas the Government are leaving it 10 the operation of the market forces.

I presume that the new agencies will be similar to the Scottish and Welsh Development Agencies. It is important that they be accountable to those who live in the regions where they operate. That applies equally in Scotland and Wales. I understand and appreciate the demand by some of my Scottish colleagues for the establishment of a Scottish Assembly, which would create some accountability in that area, as in other areas. I am in favour of decentralisation or devolution, whatever it is called. Far too much power is in the hands of extremely unaccountable people. However, I must warn my right hon. and hon. Friends in the Shadow Cabinet, and anyone else who may be a member of a future Labour Government, that any attempt to provide for Scotland advantages related to the development of industry and the creation of employment that are being denied to the three northern regions of England will meet with the fiercest resistance.

If there are to be effective regional policies, the Government must take powers to control the activities of the multinational companies. We must not tolerate a situation in which thousands of jobs in Yorkshire—or anywhere else—can be destroyed overnight by a decision made by someone thousands of miles away. That is intolerable. The Government must take powers to deal with that. Nor can we tolerate a situation that allows a foreign company to buy a factory in Britain and then arbitrarily to close it for its own purposes. That than happened in my constituency during the past few months, and it has caused a great deal of distress.

The problems of Yorkshire and Humberside will not be solved by the untrammelled operation of free market forces. They will be solved only by massive public intervention through a range of more sophisticated agencies than have operated in the past. We heard from one Conservative Member about the recent development of advance factories in Yorkshire. Welcome though they are, we must go further by public intervention to create companies that will ensure that the factories, having been built, are brought into operation and that people are given jobs doing something useful, such as producing goods that can be sold.

I said that long before I came to the House. I said it again in my maiden speech five years ago. I am sorry that I have to say it again today. I am afraid that until some Government grasp the nettle, become deeply involved in the economy, and adopt a proper policy of intervention on behalf of the public, the problems of regions such as ours will never be solved.

7.27 pm
Mr. John Townend (Bridlington)

My constituency knows the meaning of unemployment. In April this year the Bridlington travel-to-work area had an unemployment level of 16.5 per cent., and male unemployment was no less than 20.7 per cent. Although that came down a little during May, because of the start of the holiday season, it is still a serious problem.

I am not one of those, and never have been, who blame the rise in unemployment on the Government's economic policy. I know that a number of hon. Members wish to speak, so I shall not become involved in a long defence of the Government's policy, save to say that one of the most significant causes of unemployment has been the decline in the competitiveness of British industry.

All is not pessimism in our area. There are some good signs that competitiveness is improving, that restrictive practices and overmanning are being reduced, and that there is a readier acceptance of technological change. The real problem is that the more successful we are at overcoming the problems in the short term, the higher the level of unemployment. We must not forget that the unemployment figures are swollen by a number of factors, some of which have already been mentioned.

It is generally accepted that during the past decade there has been a massive increase in the size of the black economy. Without doubt, a number of people operating in the black economy are also registered as unemployed. A higher proportion of the population are in work or looking for work in Britain than is the case in most other European countries. There has been an increase in the number of school leavers, A number of people. especially in the retirement towns, are retired and not looking for work, but for a year or so register as unemployed.

In some areas there are many foreign workers, especially in the catering industry. We are faced with the problem of finding far more jobs than would have been necessary if the large-scale Commonwealth immigration and the admittance of the families of those immigrants had not taken place. I hope that that remark is not misunderstood. When Labour Members compare Social Democratic Germany and its unemployment record with the British record, they must remember that we have taken a liberal attitude and allowed immigrants to stay here with their families, whereas the Germans in many instances have had foreign workers on contract, especially from Turkey. When there has been a downturn in the German economy, the contracts have not been renewed and those concerned have returned home.

We are spending about £500 million a year through general industrial support, principally in the assisted areas, to help industry. I know that there are arguments about the cost-effectiveness of that aid. I am much drawn to the policy of doing away with it and using the money to reduce the employers' national insurance surcharge. However, as long as we have the present system it should be based on a fair allocation of resources.

I have investigated the unemployment figures for the Bridlington travel-to-work area and elsewhere. There are 20 special development areas where the male unemployment figure is less than that in Bridlington. There are nine such areas where the total unemployment figure is less than in Bridlington. In the same month there were no fewer than 54 development areas with lower male unemployment than Bridlington, and 46 with total unemployment lower than in Bridlington. However, Bridlington is not a development area or a special development area. It is merely an intermediate area. That is clearly unjust, especially when we consider that I have been taking the figures at the beginning of the holiday season. As Bridlington is a tourist resort, the comparative situation will be much worse in the winter months of November, December and January.

I strongly urge my hon. Friends on the Front Bench to consider that obvious anomaly most carefully with a view to making Bridlington a development area.

Mr. Austin Mitchell (Grimsby)

Is the hon. Gentleman asking for Government aid, handouts and public spending? That is shocking.

Mr. Townend

I said that I subscribe to the argument about doing away with development areas, but while we have them they must be established fairly and properly. I ask my hon. Friends seriously to consider the anomaly to which I have drawn attention. It is clear that there is injustice.

There are two areas in which the Government could take immediate action without costing the Treasury any money. That action would result in more jobs being available, especially to young people. I am sure that hon. Members on both sides of the House are extremely worried about the disastrous unemployment situation that is hitting young people and the long-term social effects that it could have. The Government's youth opportunities programme is vital and must be supported. However, it is only a short-term remedy. We should direct our efforts to creating real jobs and stopping the reduction in real jobs.

It is estimated that 100,000 to 150,000 jobs have been lost by the activities of the wages councils, especially in the retail trade and service industries. I have experience of this from my own business. These industries have been forced to shed labour faster than they would have done in the present difficult economic circumstances. That is because wages councils have forced up wage rates beyond the rate of inflation and in excess of the market value.

Despite the pressure on the Government from the small business lobby, they have indicated that they intend to take no action. I think that they have said that they are taking that attitude because of strong opposition from the trade unions. I received that reply when I intervened in the speech of my right hon. Friend the Secretary of State for Employment during the debate last week on unemployment.

The Government should think again. If they do not wish to abolish wages councils altogether, they should take action to help young people under 21 years of age. My right hon. and learned Friend the Chancellor of the Exchequer has said repeatedly that people should be allowed to price themselves back into work. In a speech this weekend he said that wage increases should be kept to a minimum. However, orders come from on high and 2 million employers find that they have no alternative but to pay higher rates. Surely it is better for a 19-year-old in the retail trade to have a real job at £40 a week than a make-believe YOP opportunity at £23.50 a week. However, the wages councils insist that there is no job unless the employee receives £59 a week.

The second area in which we must take immediate action is that of apprenticeships. I understand that there are at least 10,000 fewer apprenticeships this year than last year. It is difficult to obtain the figures for industry as a whole. One of the reasons for the reduced number of apprenticeships is that wages have been forced above the economic level. For example, at the end of the war an apprentice painter started his first year at 15 per cent. of a skilled man's wage. Today he starts at 50 per cent. and his wages increase until they amount to 90 per cent. That is a higher percentage than most of our industrial competitors pay. In Germany a third-year apprentice would be earning not 80 or 90 per cent. of a skilled man's wage, but 40 per cent.

In my constituency there are many small tradesmen who no longer take on apprentices. When I ask them why they do not do so they reply "We would like to take them on but we cannot afford the starting wages. In the first six months to one year they produce no income when account is taken of the supervision and training that they receive. During that time they are a liability." The Government appear to recognise the problem. However, they are showing a woeful lack of urgency in producing any solutions. They should take an immediate initiative to try to bring together the CBI and the TUC with a view to reducing apprenticeship rates, especially in the early years, to rates comparable with those paid by our overseas competitors.

We need immediate action to help this year's summer school leavers. There are thousands of keen youngsters who want apprenticeships, but they are not available. I am sure that small and medium-sized businesses, especially in the maintenance section of the building industry, would be able to provide many youngsters with apprenticeships if the rates were more competitive. It would be better to have young people in real jobs and learning skills than engaged in YOP schemes.

Mr. Prescott

The hon. Gentleman advances a valid argument about apprenticeships. The Hull corporation has had to take on four times the number of apprentices to take up the apprenticeships that have not been made available by the private sector. Does the hon. Gentleman agree with local authorities stepping in to meet the commitment?

Mr. Townend

The problem is that the bill has to be picked up by the ratepayer. That is not the answer. We must adjust the rate to a level that will enable private employers to take on apprentices.

The other problem that faces my constituency is to be found in the fishing industry, which was mentioned by my hon. Friend the Member for Scarborough (Mr. Shaw). As there is a high level of unemployment in Bridlington, a prosperous fishing industry is more important now than at any other time in the town's history. It is also important in the other smaller fishing port up the coast, which is also in my constituency— Filey.

There are three major problems facing the inshore fishing industry. The first is the question of limits. For the long-term prosperity of the inshore industry it is vital that we have a 12-mile exclusive zone. There has been talk, I regret, of that zone ending at Flamborough. Six miles southwards from Flamborough, or even less, is unacceptable. We must have an exclusive zone right down the East Coast. The least that would be acceptable to our fishermen is a 12-mile zone to south of the mouth of the Humber. Any historic rights in that zone should be clearly defined. They should have been exercised throughout the last 20 years. There should be a limit to the time for which they can be operated in the future. We should not grant historic limits within 12 miles in perpetuity.

The second problem is conservation. I regret to say that, as in so many areas, this country is the only one that obeys the rules. In too many cases the Europeans flagrantly breach the rules, as was shown by the recent television programme about fish landing at Boulogne, when illegally caught herring were being openly landed and marketed. We must have a much tougher regime, which should be applied by all members of the EEC.

The third problem is that of fish prices. The industry has had a disastrous year because of the fall in the prices of fish, principally for two reasons. The first is imports of fish from the EEC, much of which has been caught illegally. That causes great irritation to our inshore fishermen. The second is cheap imports of Canadian fish. The seriousness of that situation has brought me round to the view that, although in theory I strongly support the free market economy and free trade, in practice—

Mr. Cryer

Except for Bridlington.

Mr. Townend

No. In practice we often seem be the only country that plays according to the rules. I suggest to the Government that we cannot let basic industries, such as the fishing industry, be destroyed. Those are not industries that have suffered from low productivity, union problems and overmanning. We cannot let them be destroyed by unfair competition.

Mr. James Johnson

I shall be unprovocative and simply ask the hon. Member whether I have his permission to tell my next party meeting in Hull that Daniel has come to judgment.

Mr. Townend

I apologise for giving way and wasting the time of the House.

The answer is not for the Government to spend ever-increasing amounts of public money, however welcome that is to the industry when it is hard pressed, as it has been this year. My fishermen do not want Government subsidies. They are fiercely independent, hard-working and courageous. They do not know the meaning of the word "strike". The word "strike" is unheard of in the inshore fishing industry. My fishermen want a fair crack of the whip. If that means restrictions on imports for a limited period to take off the pressure, so be it. I believe in free trade, as the French do, but when other countries in Europe are not playing according to the rules I see no reason why we should not have a little protectionism à la francaise. We might be able to have it for only six months, as the French did in the lamb war, but that would lift the pressure off the industry and help it to survive.

There are other areas in which we should look at unfair competition. In Filey, a small leather manufacturing firm. There have been no restrictive practices and no strikes. There has not been a strike in the firm's history, but it is being put out of business by unfair competition from the Far East and Japan. We cannot ignore those factors.

My message to the Government—here I agree with the hon. Member for Sheffield, Attercliffe (Mr. Duffy)—is that we in Yorkshire have plenty of grit, initiative and enterprise. We are prepared to compete on equal terms with anyone in the world. In Bridlington, if the Government abolish assisted areas, we are prepared to compete with the rest of the country. However, it is unfair that an area such as Hull, represented by some Opposition Members, with lower rates of unemployment, should have higher grants than my constituency. We must be treated in a fair and proper manner, and I look to the Government to see that we are.

7.46 pm
Mr. David Ginsburg (Dewsbury)

The justification for the debate is the continuing serious situation and lack of an effective policy by the Government in reacting to it. The speech of the hon. Member for Bridlington (Mr. Townend) bears out the seriousness of the situation. I was interested to hear the hon. Member talk of the unemployment statistics in his area and refer to the inconsistency of the Government in the application of those statistics. Perhaps he will agree with me and my hon. Friend the Member for Batley and Morley (Mr. Woolmer) in some of the things that we shall say about what seems to be a lack of even-handedness reflected in the unemployment figures.

The hon. Member for Bridlington should not place too much emphasis on some of his caveats about the unemployment figures, implying that they are not as bad as they look. He was prepared to draw some credit for them in his argument. I am trying to be objective. There are other arguments about unemployment figures which one can also put into the balance. For example, undoubtedly the unemployment statistics grossly understate the level of unemployment among women. I do not believe that in any argument we have with the Treasury Bench it would be prudent to say that unemployment figures overstate the seriousness of the problem. If anything, the consensus is that they underestimate it.

The problem in the Yorkshire and Humberside area to which my hon. Friends the Members for Sheffield, Attercliffe (Mr. Duffy) and Rotherham (Mr. Crowther) referred is simple enough. The area has been diagnosed as having a high concentration of some of Britain's oldest industries. It was, therefore, heavily exposed to the recession when it came. Additionally, because unemployment was below that of Northern England and Scotland, Yorkshire has always been the poor relation as regards distribution of industry policy. We were too far distant to benefit from the magnet of the metropolis and not distant enough to attract other compensations. In a sense, the region has been doubly, if not trebly, disadvantaged.

I turn now to the Government's policy for the problem in its latest manifestation. For much of West Yorkshire, on which I shall concentrate my remarks, there is to be no aid. What aid we have enjoyed is being taken away. The Secretary of State for Industry is clear about that. I wish that he had attended the debate. I have had substantial correspondence with him. It is clear from his letters that he does not recognise a special problem in West Yorkshire or in the district which I represent, which is the metropolitan district of Kirklees. He states that the area's problems are part of the nation's total problems and that West Yorkshire's recovery will come with the nation's recovery and success of Government policies. That is his argument. I find it unconvincing, and I believe that most of my hon. Friends would agree with me.

However, let us suppose that the recession bottoms out, unemployment stops rising, there is a modest recovery in the economy, and, in particular, restocking takes place. All that will be welcome, but it is difficult to accept that even then all the unemployed will be reabsorbed into the labour market. As my hon. Friend the Member for Rotherham said, the steel mills that have closed will not reopen, and nor will the wool textile mills. The question for the nation and even more for West Yorkshire is where are the new industries and how will they come into being? We ill serve our electorate if we suggest that recovery will come about by waving a magic wand or that the free market or Government planning have the answer. We must develop new manufacturing and service industries in the areas where we have the ability to outclass competing nations, and that will require a much more skilled labour force than we have today. Yet the Government have not even laid the foundations for that, although theirs is the responsibility.

I, therefore, inevitably turn to the local employment situation, which is as bad as it ever was. There is no clear sky on the horizon in my constituency. In the Dewsbury travel-to-work area, the rate of adult unemployment is about 12½ per cent. and the figure for male unemployment is, of course, much higher. Unemployment has been at that level for nearly a year, yet the Secretary of State refuses to intervene. He argues that the rate is not high enough. How high does it have to go? I pray in aid the remarks of the hon. Member for Bridlington. I can give the Government a list of travel-to-work areas that have lower rates of unemployment yet have retained their intermediate or even development or special development area status.

I cannot accept the next argument that the Secretary of State displayed in my meetings with him. Why do I make a fuss about grants as they are not so decisive? They are extremely decisive, and, in addition, their removal will cut off European aid. Three weeks ago a major industrial project was planned to come to my constituency, but, because of the unsatisfactory grant situation, it is now going to the other side of the Pennines. I am in no doubt that grants matter.

It is clear from correspondence with the Secretary of State that he has only limited resources, and he argues that there are greater priorities, but that is not the entire picture. A number of facts should be considered. First, in the postwar period new industrial development in West Yorkshire was extremely slow. There was full employment, but within an ageing industrial fabric. The position did not improve until the 1960s or early 1970s, after the Hunt report. I give the Conservative Government of that time credit. The position began to improve with the extension of intermediate area status. The value of and need for intermediate area grants is absolutely clear cut.

Secondly, West Yorkshire relies heavily on family businesses rather than large State or publicly quoted corporations, as has been said in speeches from the Government Benches. The financial fabric of those businesses is weaker, so the importance of the incentive of grants is greater.

Finally, given their philosophy, the Government should consider the cost-effectiveness of grants. It is often much more effective to deploy money in backing small and medium-sized businesses than in vast give-aways, where it may be irretrievably lost or may not be cost-effective. It is ironic that the Secretary of State for Industry, who was the apostle of the small entrepreneur, is really the friend of the big public and private corporations. Only about a week ago, in a speech in the North of England, he said that they had never had it so good and that there was money coming out of their ears. When the balance sheet is struck, he will be seen to be far more guilty than his Labour predecessor of shielding the established parts of the public and private sectors, so that next to nothing has been left to promote growth in the medium and small business sector—and that is the guts of the problem. That is why I hope that the debate will play a part in persuading the Government to change their policy.

I hope that Ministers will come to see for themselves. I welcome the fact that the Secretary of State is sending his estates adviser to my constituency and that of my hon. Friend the Member for Batley and Morley to assess the problems and to give advice, but that is not enough. He is only an adviser and cannot answer for Government policy. I hope that the Secretary of State or one of his Ministers will come.

The Government must give hope. The social consequences of long-term stagnation, without further decline, will be serious not least for the ethnic community, young people and local authority resources. The Government cannot wash their hands of their responsibilities. I hope that the debate will persuade them to adopt a more constructive policy.

7.57 pm
Mr. John Watson (Skipton)

I am grateful for the opportunity to participate in the debate.

Yorkshire and Humberside is a typical, and not exceptional, region of the United Kingdom. Different areas have specific problems, and some have particularly high unemployment. Mexborough, Rotherham and Bridlington have been mentioned. I appreciate the fact that the region has perhaps more than its share of traditional industries and that industries such as textiles, coal, fishing—if one can call the last named an industry—and steel have specific problems, but, generally, it is difficult to avoid the conclusion that Yorkshire and Humberside is reasonably typical. Our patterns of unemployment and industrial activity are about average. Without general national recovery, I cannot see the area coming out of the recession, but neither will it remain in its own isolated recession if there is nationwide recovery.

I believe that the chance of economic recovery is better than has been acknowledged by some hon. Members on the Opposition Benches. One or two factors are distinctly better than has been acknowledged. First, a year ago inflation was running at 22 per cent. and is now down to just over 11 per cent. Interest rates are now 5 per cent. lower than at this time last year. The United Kingdom balance of payments is the second biggest in the world outside Saudi Arabia. Our strike record over the past 18 months is the best since the war years. The level of the pound against the dollar has fallen and is now below the level at which it was when the Government took office. That is important, as 40 per cent. of our exports go to North America.

If the recession has done nothing else, it has at least enabled many of the better employers to remove from their factories restrictive practices and inefficient operating arrangements which have impeded their chances of exporting to the rest of the world. Indeed, one might almost ask why, with so many things now going right for United Kingdom industry, it is not already prospering and producing more tangible signs of recovery.

At this point I refer to the exchange earlier in the debate on the subject of demand. I hope that we shall not dismiss too freely the significance of demand in the whole economic equation. I suspect that we do not have a great deal right in the United Kingdom economy, but that demand is not yet right. It is as though in servicing the car we have somehow neglected to notice that at the same time we have drained it of petrol. When my hon. Friend winds up the debate, he may say that consumer demand is not a problem and has held up remarkably well over the past two years and, moreover, that, if we get confidence back into the economy, the savings ratio will fall and people will spend more money.

I acknowledge all that. I merely ask my hon. Friend to acknowledge the clobbering that has been taken by the average household budget over the past three or four months. Rates have increased enormously. Council house rents, which apply to about 30 per cent. of households in Yorkshire and Humberside, have increased on average by more than £3 per week. Gas, electricity and postal charges have all increased. National insurance contributions have also been increased. All that is quite apart from the measures announced in the recent Budget, which further deflated demand. I do not wish to exaggerate the case. I acknowledge that consumer demand has proved remarkably resilient, but what has happened to it over the past three months must, at the very least, have meant a postponement of the economic recovery that otherwise might have taken place.

In those circumstances, if there is a need for increased demand, how should it be achieved? I do not advocate an increase in public revenue expenditure, nor do I advocate any reduction in taxation, because, apart from the effect that such measures might have upon interest rates, I have no doubt that any sudden increase in demand would make our competitors' factories overseas just as busy as it would our own. Nor would I advocate any immediate reduction in the national insurance surcharge. I know that leading spokesmen of the CBI say that we need to restore profitability because companies will then buy more machines and that the best way to restore profitability is to abolish the surcharge. I believe, however, that for industrialists to buy more machines not only must their profitability increase but they must have a greater degree of confidence that they will be able to sell the stuff that those machines produce.

I am therefore led to the conclusion that the best way to increase demand is by a restoration of much of the Government's capital programme, particularly in regional infrastructure schemes. I have in mind schemes of the kind mentioned earlier in the debate, such as replacing the Selby toll bridge, building the Market Weighton bypass, operating on the Bradford sewers again and building the Settle and Giggleswick bypass. Measures of that kind certainly involve public expenditure, but they involve public capital expenditure which is regionally oriented, for which plans already exist and which is currently labour-intensive. I should be the most enthusiastic advocate of that.

If any Conservative Member wishes to criticise any increase in public expenditure at this time, I would reply that I am merely advocating its restoration to its historic levels. If Government expenditure on fixed capital formation in Yorkshire and Humberside—that is, the infrastructure schemes to which I have referred—is taken as 100 for 1970, by 1974 it had risen to 108, by 1978 it had fallen to 70, this year it is 43, and next year it is planned to fall to 41.

Opposition Members will say that in times of recession there is a case for increasing Government capital expenditure. I do not say that, but I believe that infrastructure expenditure should remain reasonably consistent whatever the state of the economy, because contractors may then lay their plans accordingly. I believe, however, that it is extremely difficult to justify the fact that at a time of recession we have reduced by 59 per cent. the total amount of capital infrastructure spending targeted for Yorkshire and Humberside.

Finally, I believe that it is somewhat naive to believe that the massive scale of unemployment facing the nation and the region can self-evidently be solved by a recovery of economic activity alone. I believe that unemployment has become so structural in our society that whatever is done to boost the economy over the next three, four, or five years will have relatively little effect in reducing unemployment. I do not believe that there is any significant chance of getting unemployment back to the heady days of the 1960s referred to earlier by that means alone.

My principal reason for saying that is that the number of people in Yorkshire and Humberside who will reach retirement age this year is 54,000, while the number reaching school leaving age will be 84,000. Therefore, if we neither create nor destroy any more jobs in the region, unemployment will increase by at least 30,000, as night follows day. That leads inevitably to the argument about increased training. I enthusiastically agree with my hon. Friend the Member for Bridlington (Mr. Townend) when he says that effectively apprentices should be taken out of the whole pay bargaining structure.

I believe that it must also lead to a more cohesive and planned structure of early retirement than has been the case in the Government's programmes so far. I envisage a system starting with increased use of the job release scheme operating over a period of years and culminating, one hopes, within a decade at a stage at which the normal retirement age for both men and women would be about 60 years.

I believe that only through such structural means shall we solve the unemployment that has become endemic in our society. I therefore hope that in winding up the debate my hon. Friend will not just talk about economic recovery, because while that is what we all need and want, it will not be sufficient to solve the basic structural problems of unemployment that now exist.

8.8 pm

Mr. Alec Woodhall (Hemsworth)

It is a pleasure to follow the hon. Member for Skipton (Mr. Watson) as much of what he said, coupled with what has already been said by Opposition Members, particularly my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy), made sense. The Government should therefore take notice, particularly of the hon. Gentleman's comment about the people of this country being clobbered by rising prices. I would agree with the hon. Gentleman even more if he would go along with me and disagree with his hon. Friend the Member for Bridlington (Mr. Townend), who tried to pin the faults in our economy on wage increases.

I should like to begin with a fairly long quotation from the chairman's introduction to the eighth annual report of the Yorkshire and Humberside Development Association. Although the quotation is long, it will help hon. Members to understand my point. The chairman said: Whilst the Region has continued to experience more than its fair share of economic difficulties, particularly in the traditional sectors such as textiles, steel and fishing…there have been improvements in all forms of transport, roads, railways, ports and waterways, the outstanding achievement must be the completion of the Humber Bridge…and will greatly facilitate the movement and exchange of goods, services and of course people…Promotional activities have been maintained at a high level throughout the year, despite staffing problems and have included inward tours, sales visits overseas, particularly to Scandinavia and seminars both in London and abroad. Despite this high level of promotional activity, the level of inquiries has inevitably fallen, as the recession has bitten deeper than ever before in the post-war years…There is no doubt that the prospects for economic expansion in Britain depend on how far industry can improve its competitive position and on a further reduction in the rate of inflation. So much has been achieved during the last two years—not without hardship and sacrifice on all parts—that it would be foolish to throw away the opportunity now of a more prosperous future and a real growth in the economy…Those in work have moderated their demands in the interests of further reducing inflation and in the hope that the consequent improvement in competitiveness will lead to a growth in output and employment. Now the principle of a fair day's pay for a fair day's work is once again a major part of our philosophy in this country, we in Yorkshire and Humberside have nothing to fear, since he have always enjoyed a reputation for hard work, diligence and viability. That says it all not only about Yorkshire but about Britain.

We have always argued that Yorkshire is the industrial hub of Britain. Yorkshire produces 26 per cent. of the country's coal. Consequently, Yorkshire has all the large coal-fired power stations, such as those at Drax, Eggborough and Ferrybridge. The Drax power station is shortly to double its output and will become the largest coal-fired station in Europe, if not in the world. As it is on Selby's doorstep, that is only right. Yorkshire also produces 22 per cent. of Britain's textiles. Heaven knows that the textile industry has been clobbered. Yorkshire also produces 20 per cent. of Britain's metal manufactures. Therefore, when we claim that Yorkshire is the industrial hub of the country, we can produce the figures to back that claim.

Yorkshire produces wealth in terms of goods and services. But in a recession, unemploymennt hits Yorkshire harder than any other area. since May 1979, unemployment in Yorkshire has increased by 118 per cent.

The hon. Member for Bridlington may complain that male unemployment in his area amounts to 20 per cent., but in my area it amounts to nearly 30 per cent. We are not asking the Government for help. My hon. Friend the Member for Attercliffe is right. I am not shoving out the begging bowl or asking that Yorkshire should be given more help than other areas. Yorkshire is quite capable of looking after itself. We are not whining or begging, but asking the Government to take stock and to reconsider their foolish monetary policy. That is the root of the evil in Yorkshire and in the whole country.

I beg the Government to change their policy. More than 2.5 million people are out of work. The Prime Minister and the Secretary of State for Employment have admitted that that is a national disgrace. In Heaven's name, why do they not do something about it? I ask the Government not to give Yorkshire more help than any other area but to change their policy. The working people of Britain deserve better than this. If the Government will not change their policy, they should get out and make way for a Government who will change the policy, regenerate British industry and get the country going again. I promised to be brief, but I hope that the message has gone home.

8.14 pm
Mr. Gary Waller (Brighouse and Spenborough)

Today nobody doubts that the Yorkshire and Humberside region has serious problems. Some of them merely reflect the problems of his nation and of all industrialised nations during the recession. Other problems are peculiar to the area. Indicators such as the unemployment figures show that West Yorkshire—the county that I come from—which used to have relatively low unemployment has been climbing rapidly up the league table for some time. That relative rise has been particularly notable during the past two or three years, when the more traditional industries that characterise our county have been particularly at a disadvantage.

I shall take my constituency as an example. Traditionally, Brighouse and the Spen Valley have a low rate of unemployment. For a long time unemployment in that area was about half the national average. However, as unemployment rose nationally the local level of unemployment did not rise commensurately but, on the contrary, caught up with and overtook the national figure. Indeed, it is now several points above the figure for the United Kingdom as a whole.

In general, I share the view expressed by the Minister that subsidies cannot be the salvation of our industries. I support the Government's policy of giving the greatest assistance to those areas that have the greatest need. In some areas of Yorkshire unemployment has risen to more than 20 per cent. That is a truly shattering figure. However, such figures tend to be confined to relatively small pockets. But the overall trend, in relation to the United Kingdom as a whole, is upward.

My right hon. Friend the Secretary of State for Industry wrote to the county council in May and gave his reasons for rejecting West Yorkshire's plea for reconsideration of intermediate area status. He said: it is necessary to consider primarily absolute rates of employment experienced over a long period. However, I maintain that at some stage it is that very long-term trend in unemployment that will merit reconsideration of the region's position.

It is also important to bear in mind that the area faces particular problems because of its stock of outdated buildings. In Calderdale there is a shortage of flat sites because of the nature of the topography. Rapid change is needed because traditional industries have been running down and areas such as Calderdale find themselves in a difficult position when the old, multi-storey mills have to be replaced to suit the nature of modern industry.

It is also necessary to consider whether the travel-to-work area is the best criterion of unemployment, or whether that criterion can disguise pockets of unemployment at the local employment office level.

If one were to listen to some hon. Members, one might think that the picture was all black. However, as the Minister said, there are encouraging signs. The director of the Yorkshire and Humberside region of the CBI said: Sectors of our industry which were badly hit by the recession such as textiles, clothing, confectionery, glass and small service industries are now showing slightly improved output. The improvement may have been only slight but at least there was an improvement. That is a good sign. Both the Leeds and the Bradford chambers of commerce have produced comparable forecasts.

Labour Members like to reel off the unemployment figures in local industry as an indication of the depth of the depression, but a reduced number of jobs, however regrettable that may be for the individuals concerned—and because of our constituency experiences we all know about the impact of unemployment for individuals—is a wholly inadequate criterion for the strength of different industries.

Had the textile industry not shed jobs in the way that it has done during the past few years in order to become more efficient, it would not exist today, and the jobs that are still left would not now be there. One company in my constituency which spins yarn, essentially for the hosiery trade, had seven mills five years ago which produced 150 tonnes per week and employed more than 2,000 people. Today it has only two mills and employs half the number of workers, yet it manufactures approximately the same amount per week.

I should like to quote what the managing director of that firm says, because it provides us with a number of lessons: We are selling yarn at the same price today as we were five years ago. What other industry can claim this, when all the other costs have escalated, particularly the cost of water, electricity, gas, rates"— I shall refer to rates in a moment— effluent, not forgetting interest charges for the period in question. Given fair trade we are now in a position to take on the world. We believe that there is a future for textiles within the EEC, but industry must be highly automated with the latest sophisticated machinery and given the backing of the Government … to reinvest in the latest machinery … The plant is running at full capacity and we have turned the flow of heavy losses for Acrylic Yarn production into a profitable operation. This has not been achieved without a lot of sweat and tears and sheer hard work, coupled with innovation. We believe emphatically, given the right lead, this is what the Union and British workmen are crying out for. it was worth reading that, because it shows that even those areas of textiles that are competing head on with the low-cost countries can succeed, given the right attitude and provided a company pulls out all the stops to make itself efficient. It also shows that it is possible to become efficient only by reducing unit labour costs. That company has done so in a substantial way. Thirdly, it shows that to compete fairly British industry needs the same kind of help as other industrialised nations give their industry. I agree that blanket subsidies are counter-productive, but capital investment, both public and private, is needed where the expected return amply merits it.

My hon. Friend the Member for Skipton (Mr. Watson) spoke of his regret that capital spending had fallen so much as a proportion of all Government spending. I go a long way with him when he expresses that sentiment. However, I would put greater emphasis on the need for return. When we consider capital expenditure by Government and when setting it against the PSBR we do not sufficiently consider the return that will be obtained from such investment. I put particular emphasis on those schemes that amply merit such investment because of the return that they will provide in the future.

In many cases we must mark reductions in manpower on the credit side rather than on the debit side—that certainly applies to the future—not only in textiles but in many other industries in our regions. Many of the larger companies have become uncompetitive over the years by allowing overmanning. It has taken the current recession and the Government's uttely realistic policies to make management realise that industry can be preserved in the harsh economic climate that faces us throughout the world only by a policy of utter efficiency. Unfortunately, hard as that may appear, in many instances it means reducing labour.

When we talk about increases in unemployment in our region, we must remember that it is not always a disaster for all concerned. It may mean that industry is in a better position to face the future. I would rather have a leaner industry that is likely to survive than one that has gone out of existence altogether because it has been unwilling to implement the changes that were needed.

As the jobs are lost, others must be found. The towns and cities of Yorkshire and Humberside need new jobs to replace those which are inevitably disappearing. I ask my right hon. Friend the Secretary of State for Industry in due course to consider whether the Government's policies for assisting the most severely depressed regions need some amendment in the light of circumstances.

In West Yorkshire, Bradford is to retain assisted area status and Wakefield now has an enterprise zone. However, redundancies in the carpet industry and cutbacks throughout parts of Kirklees and Calderdale mean that they have been hit very much harder than parts of Bradford, which has retained its assisted area status. The existence of these aids in nearby areas will inevitably draw jobs away from other areas. It worries me that the North, as my right hon. Friend the Secretary for Employment said only recently, has been hit far harder than the South in employment terms. It also worries me that when the revival comes, as it will, the North, tied to old industries such as textiles, may recover much more slowly.

In a sense, Yorkshire and Humberside is caught between two stools. It is at a disadvantage compared with more favoured areas such as the South and South-East in competing for high technology industry, yet it does not receive the Government assistance that is enjoyed by other areas such as Merseyside and parts of Scotland.

Our first concern must be economic revival for both industries and people. However, I should like to say a word or two about electoral consequences not only to my party but to Labour Members. Just as the Conservatives won fewer seats in the North in 1979 than in 1970, when they lost the election, so they may win fewer still next time. A Social Democratic and Liberal alliance may appeal to disillusioned Labour voters in the South, but in towns in the North it may appeal more to disillusioned Conservative supporters. That will have no benefit to the Labour Party, because a country divided north and south will be a poor democracy and a poor nation.

As many of our industries rely on exports and as the recession has hit our part of the world particularly hard, we hear more about the impact of exchange rates than many of our colleagues. I cannot accept that Britain has been, and is, at a uniquely disadvantageous position in this respect. Some of the most successful economies in Europe since the war, such as Switzerland and West Germany, have successfully contended with high exchange rates. Restrictions of the exchange rate will not help us at all in the longer term, any more than unilateral import controls.

I have already referred to local authority rates. I believe that industry would be helped if local authorities kept their rate demands low. Kirklees council went Labour last May and immediately imposed a supplementary rate. One of the burning issues at Kirklees council has been considering since then is not how to help industry but whether the district should be a nuclear-free zone. The council leader in Kirklees went on to endorse the proposal that The Sun newspaper should be banned from Heckmondwike library because it was not sufficiently progressive.

In the Calderdale council the majority Labour group proposed a 24 per cent. increase in the rates, though I am glad that the Liberals and Conservatives combined were able to defeat that proposal. When councils propose to increase their rates, they should realise that every extra penny means fewer jobs for those living in the area.

I want to mention the structure of local government. I was not a great fan of how local government reform in 1974 was implemented. The feelings about it in Yorkshire were strong at that time and I believe that they remain strong. Before embarking on further changes, we would have to consider carefully not only the cost but the disruption caused after so short a time. Both West and South Yorkshire are metropolitan counties. I am glad that the hon. Member for Batley annd Morley (Mr. Woolmer) is paying attention. He was once the leader of the West Yorkshire county council. Relatively few responsibilities remain with metropolitan county councils. Unlike the shire counties, they do not have the responsibility for education. Perhaps we should consider, perhaps in the not-too-distant future, abolishing the metropolitan county councils and dispersing their responsibilities between the districts and the Government. I am not wholly convinced at this stage, I retain an open mind, but the suggestion is worth considering both to reduce costs and to prevent duplication of functions. It would ensure that people knew which local government functions were held by which authorities, which they do not know at present.

There are ways in which the Government can and should help, but financial assistance must be paid for by someone. That in any case represents a palliative rather than a cure for our ills. For many years we have failed to achieve growth, but government, national and local, has continued to increase spending. We must now learn the hard way that we can achieve employment in the long term not by providing jobs in Whitehall or in the town halls but only by facing the problems that exist. In Yorkshire and Humberside those who have the responsibility for achieving growth certainly understand that lesson and want to put it into effect.

8.33 pm
Mr. Peter Hardy (Rother Valley)

I hope that the hon. Member for Brighouse and Spenborough (Mr. Waller) will forgive me if I do not follow him in great detail, although something he said illustrates our need. He said that one textile manufacturer in his constituency now employed half as many people to produce the same amount of goods. It might have been better if that manufacturer employed twice as many people to produce twice as much if he had been motivated by the need to develop his markets rather than to maintain his current profit.

The hon. Gentleman struck chords that were welcome to the Opposition when he referred to the exacerbating divisions between North and South. The Government have markedly contributed to that division which, in the long term, is very much against the national interest. I shall not press that point further, but it would be a mistake to assume that it is the North rather than other areas which has been affected badly.

To some extent my constituency is a microcosm of England. Hon. Members will recall that it is associated with steel and mining, but it has something of almost everything, except deep sea fishing—and there is little of that anywhere at present. It has chemical and engineering firms of all kinds and some farming. Farm incomes in Yorkshire have fallen by nearly 20 per cent. in the past two years, although the Minister will understand why we are not making too much fuss about that. At least the farmers are in employment. In my constituency, even though the pits have been secured—perhaps the one exception is Orgreave which is currently a cause for anxiety—the labour force at the collieries has decreased dramatically while production has been maintained or increased.

In steel the position has been appalling. Not long ago I referred in the House to the fact that the steel workers in the Rotherham area, largely in the Rother Valley, were accustomed to breaking world records. I was shocked and disgusted that the Minister of State—I accept that at that time he had held his job for only a few weeks—seemed to believe that the steel workers in the Rotherham area would be capable of breaking records only after they had taken the tough and hard medicine that the Government have imposed upon them.

Indeed, only this morning I read about steel having to be imported because the British Steel Corporation's capacity had been excessively contracted. It is a pity that the hon. Member for Brigg and Scunthorpe (Mr. Brown) is not here, because no doubt he would have been able to tell us about the feelings of people on Humberside who have had a higher degree of unemployment than was necessary inflicted on them.

In Rother Valley and the rest of Yorkshire and Humberside we are paying for the excessive gamble that the Government are taking. They are repeating with much larger stakes the gamble which Lord Barber, as he now is, took in 1971, when we had a gambling Budget, with the Government seeking to curb the spending power of ordinary people and enormously increasing the tax relief afforded to the well off in the hope that it would stimulate investment. That gamble failed, and this gamble has also failed. Hon. Members, such as the hon. Members for Skipton (Mr. Watson) and Brighouse and Spenborough, are recognising that it has failed because they are now speaking of signs of improvement. The only real improvement will be when the Government change course. It is generally accepted now that the Government will change course, but we have not yet seen any firm indication of the timing of it.

Last weekend I saw a man from Swallownest. He is in his mid-20s and a highly skilled worker. He will have to emigrate because of the Government's failure to change course. I also saw a man in Rawmarsh in his mid-40s. He told me that, despite the fact that he is a skilled worker with a very good record of attendance at his employment, he does not expect to work again. But the saddest comment I had over the weekend was from a constituent in Dalton. He said "My lad has got a job", as if it were one of the most astonishing miracles of our age. It is not much of a job but he is lucky, because three-quarters of the school-leavers in my area will be without work by the end of the year.

The Rotherham borough council—it was perhaps not approved of by the Minister—advertised 15 apprenticeship vacancies. The Secretary of State for the Environment and other Ministers might deplore the fact that Rotherham borough council has advertised 15 vacancies. They may have preferred it to advertise 10, five or no vacancies, but there were 15. Four hundred young people applied for those jobs. Now small employers in constituencies such as mine dare not advertise vacancies, because they have not the administrative capacity to cope with the enormous flood of applications that they would experience. A small business with three or four people and requiring one or two workers cannot cope with the scores, hundreds or thousands of applications that would follow an advertisement. That is the sad state that we have now reached.

Local authorities are told not to spend. The local authorities in South Yorkshire—I speak particularly of Rotherham; an extremely efficient authority in which I have enormous confidence—make a great contribution to providing opportunities for our young people. I speak as president of the Youth Association of South Yorkshire. Local authorities and voluntary associations in South Yorkshire have made enormous efforts to provide opportunities for our young people, but every step forward that they take is followed by five steps backward as a result of the hammering that Government policy is imposing upon us.

The subject is not restricted to comment only from Labour politicians. In April the professional youth organisers from South Yorkshire organised a rally in Hyde Park. My hon. Friend the Member for Rotherham (Mr. Crowther) and I helped in the organisation of it. I was delighted that we brought down coach load after coach load of young people from Rotherham from youth clubs and from comprehensive schools. They behaved superbly. The police had never seen such orderly and well-behaved young people. That was in April. If the Ministers look at some of the newspaper reports now they will find increasing evidence that the youth of South Yorkshire are becoming angry and frustrated. There were scenes in Herringthorpe playing field—probably grossly exaggerated by the media—that suggest to me that the anger and frustration which are inevitable are being and will increasingly be expressed.

I ask the Minister to note the advice from teachers in the institutes of higher and further education. The staff in colleges in the Rotherham area have a number of sensible suggestions to make. They would involve some public expenditure, but they would at least take young people off the streets and provide them with job opportunities. They would end the scandal of cynical and fatalistic young people leaving school early, saying "We may as well get supplementary benefit now as wait for another year, when probably we still shall not he able to get a job."

The Minister should be aware that we spend nearly £70 million a year to meet the cost of unemployment in my constituency alone. The cost in South Yorkshire is over £350 million, and the cost in Yorkshire and Humberside this year will be £1¼ billion. I would rather that money were diverted to useful purposes. I would rather use some of the money that is spent on unemployment in my constituency to ensure that British Steel and the private sector in South Yorkshire pay the same energy prices as their French and German competitors.

It is all very well the Minister saying that we have got a better deal with Europe. I prefer to wait and see. We have not had a particularly good deal on steel in the past three years. Unless we deal with problems such as energy prices, that deal will not improve.

I end not by rattling the begging bowl, but by begging the Government to change course before the social and economic damage inflicted on our communities becomes enormous. The fact that this is the International Year of Disabled People does not mean that we deserve a Government who suffer from serious mental impairment.

8.43 pm
Mr. Geoffrey Dickens (Huddersfield, West)

As a southerner, now representing a Yorkshire constituency, from time to time I have felt that perhaps people in Yorkshire have not fought hard enough for their dues. I shall explain why.

One of the biggest problems in Yorkshire is the cost of energy. We must remember that in the cold North the winters come in earlier and spring is much later. That means that animals and livestock have to be brought in during the winter and hand fed. Industry has to use more energy in lifting temperatures for various treatments and to keep the staff warm. The work force today require higher standards of heating than that of their fathers years ago.

Why should the people of Yorkshire have to pay the prices that they are now paying for their energy? Are not the gas, oil and coalfields and the power stations themselves near Yorkshire? In many countries those who are nearest to these facilities benefit most because they do not have to meet the great distribution costs. They pay the right prices for their energy.

If the North is penalised, in the sense that it always has the highest unemployment, why cannot we do something about it on a sound economic basis? As the hon. Member for Rother Valley (Mr. Hardy) said, we are not holding out a begging bowl; we are asking for help on sound, economic grounds because these forms of energy are on easy tap to Yorkshire. Surely the people of Humberside and Yorkshire should have a cheaper form of energy which would make the unit cost of their products more competitive with those in the rest of Europe.

Mr. Woodall

If the hon. Gentleman suggests that we, in Yorkshire, are a bunch of hothouse flowers, all I can say is that he has not lived in Yorkshire for very long. He does not know us very well.

Mr. Dickens

I was suggesting just that. I wish only to say that when I went to Yorkshire I was told "We like you. You call a spade a bloody shovel". I felt that that was a great compliment. I have a reputation for speaking my mind and speaking plainly. If I say "You are not fighting hard enough," I mean it. I do not think that I have yet fought hard enough at times for Yorkshire. Today we have the opportunity to record in Hansard how deeply we feel about the region of Yorkshire and Humberside.

Reference has already been made, rightly, to the fact that Yorkshire has a tremendous capacity for getting on and doing the job. There are examples in Yorkshire of small businesses formed by two or three people, perhaps a year or so ago, that have mushroomed to an extent where they employ 50 or 60 people. Companies are becoming much more slender units. This means that there is no need for heat to be pumped over a wide site and that bales of cotton do not have to be shifted long distances. The outcome is increased efficiency.

Why should a situation exist in which I was recently competing for an international steel contract only to find that I was outbid by South Korea, which had been bombed to the ground, Taiwan, and even India, once so far behind this country? Now they beat us for international contracts to construct buildings and power stations. The reason is that we have not been efficient.

It is easy for the Opposition to blame the Government for high unemployment. I do not blame this Government. I blame Governments over many years for the situation in which we find ourselves. It must be remembered that there is a world recession. Many more women, rightly, wish to work. The tremendous birth rate in the 1960s means that many more children than was the case a few years ago are leaving school and wanting jobs. These additional problems have complicated our fight back for employment.

It serves no purpose for the Opposition to tear into the Government week after week about the unemployment figures. Conservative Members are just as embarrassed, if not more so, than are the Opposition, because our party is in Government. It is our responsibility. Labour Members should not forget that unemployment increased during 11 to 15 years of Labour rule. The only answer is a lowering of manning levels. So long as overmanning continues, we shall never compete for contracts.

Hon. Members have to fight for the Yorkshire region. I should like the Government seriously to consider my suggestion for giving Yorkshire and Humberside assistance in terms of energy costs. The nations with which we compete receive such relief. The energy sources are located near to those living in Yorkshire and Humberside. Our cold atmosphere in the North entitles us to some form of relief to make us more competitive and to get more people back to work.

8.49 pm
Mr. Martin Flannery (Sheffield, Hillsborough)

I am always surprised by how magnificently divorced Conservative Members are from the lives of ordinary working people. That is shown continually. I have considerable respect for the hon. Member for Scarborough (Mr. Shaw), who has chaired many Committees on which I have served and has a ready wit, but he sounded like Marie Antoinette—"If you cannot give them employment, give them golf courses". The imagination boggles at all the unemployed using a second golf course at Scarborough.

It is staggering that such attitudes dominate the speeches of Conservative Members. The sheer ignorance of some of them about working people is unbelievable. I can only believe that it is because they all have country constituencies that they know so little about the industrial working class. They should come to South Yorkshire and see the great scrap heap that produced the wealth of the South. That is how it looks.

I was near Mexborough recently when my train was delayed for nearly three-quarters of an hour. A young Service man looked out the window and commented to one of his pals "It looks as though a nuclear bomb has dropped here". We have treated the mining community and the working class in that area abysmally, and they will not stand it for much longer.

Local freedoms are threatened by the Government's obsession with their policies. The outstanding characteristic of Conservative Member's speeches is that they have all grovelled to the Prime Minister and the Cabinet and said that they agreed with Tory policies, but everyone has asked for subsidies. That shows that they do not agree with the Government's policies, and it is an indication of the colossal divisions within the Cabinet.

South Yorkshire's struggle to produce a decent transport system is threatened by the massive intervention of the Government. That is virtually the only growth area in Britain, apart from unemployment.

Dr. Hampson

Will the hon. Gentleman give way?

Mr. Flannery

No. I do not have enough time to give way, and when the hon. Gentleman starts, he never shuts up.

Old people's homes are being closed and spending on hospitals, education, day centres, housing and recreational facilities is being cut. The Conservatives boast that they want to keep the rates down, but they have never said that that means closing old people's homes, hospitals, schools and so on. They say that South Yorkshire has had a 41 per cent. rate increase while Humberside has increased its rates by only 2 or 3 per cent., but they never add that that is because South Yorkshire will not cut services to ordinary working people.

The Tories also boast about the sale of council houses, but they are not building any new council properties. They are flogging council houses, thus removing them from the stock of local authorities, which are receiving only half the price that it cost to build those houses, and the housing stock is not being topped up by new building.

There is a huge question mark over the main industries of great cities such as Sheffield. The people's march for jobs passed factory after factory with "To Let" signs outside. It is no surprise that 20,000 people occupied the centre of Sheffied to watch the marchers and we had a huge demonstration of nearly 200,000 people in Trafalgar Square. Unemployment is the only growth area in the country.

The great Sheffield steel industry is being curtailed to such an extent that we wonder whether it will ever be rebuilt. Once we supplied cutlery to the whole world. Every time a Sheffield person visited any place in the world he could lift up a knife or fork and see that it was made in Sheffield. Nowadays, almost all the cutlery comes from South Korea, where trade unionism is non-existent, child labour is used, there are no safety guards on machines to prevent workers from having their hands cut off, and no pensions for workers. The Tory owners of the 6 per cent. of the world's cutlery industry that is left in our great city are importing that cutlery. Those who talk about the industry dying are importing cutlery and stamping on it "Sheffield plated" to convey the impression that it was made in Sheffield.

I sought leave to bring in two Bills, both of which were rejected. All that they proposed was that the country of origin should be marked, as it should be on textiles, so that people know when they are buying goods from abroad. It is like selling the cow to pay the milk bill. Leading Tories in Sheffield own the cutlery industry, yet they are bringing in cheap cutlery from South Korea and Taiwan, while our craftsmen and women are laid off and our industry is murdered.

The flight of capital goes on, so much so that the Financial Times said the other day that what had been an upsurge in capital going abroad had become a flood and then a river. In October 1979 the Tory Government allowed capital to go abroad. Where does it go? It goes to places like Korea, where trade unionism is weak. It goes to places where they can get the maximum profit: and in that way they kill their own industry, because those foreign areas undercut our production and our workers are laid off. Thus, by allowing the flight of money from Britain, which we sought to curtail, the Government are undermining the whole of British industry.

More deadly, while talking about patriotism morning, noon and night, the Government are not putting money into our own industry. They send it abroad for the maximum profit, while our own private industry goes downhill so rapidly that Firth Browns, Hadfields and Clarkson Tools in Sheffield have closed down. They are creating a desert, and the desert can be seen.

At the Yorkshire gala the other day the president of the South Yorkshire miners was talking about one pit that is left in the Sheffield area, near to South Yorkshire. He said that if that pit was closed the South Wales miners and the Scottish miners would immediately come out. They know that every pit is in danger once the Government start to close pits to make super pits, and when, more likely than not, as in the case of the oilfield that they have just sold, they sell them to private owners.

We are telling the Government that they should go no further in closing mines and cutting railway services. We have had enough, and we intend to stand up against them. The Government will have a general strike on their hands if they are not very careful. However, they will not change. The only hope for our country is for the Government to fall and for the Labour Party to form a true Socialist Government and put into practice the only ways that we know of regenerating British industry, which at present the Government are destroying.

8.58 pm
Dr. Keith Hampson (Ripon)

I am grateful to have this opportunity to speak, having spent much of the evening in Committee upstairs.

It used to be commonplace for me to follow in debate the hon. Member for Sheffield, Hillsborough (Mr. Flannery). However, that pleasure has been denied me for some time. The hon. Gentleman made a great issue of lifting the exchange controls. What he said about the difficulties faced by British manufacturers is correct, particularly those involved in steel, cutlery, and so on. I accept that that is true of Sheffield industry. It has been devastated largely because of the strength of the pound. But, by heavens, if we had not lifted the exchange controls, where would the level of the pound have been? It has been one of the most important and critical escape hatches for easing pressure on the strength of sterling, buoyed up by our oil revenues. So, as so often, the hon. Gentleman is wrong.

The hon. Gentleman spoke, of course, from the standpoint of the city of Sheffield. If there is an example to prove or disprove the arguments of Labour Members about public expenditure, it is Sheffield, because year after year Labour authorities there have spent and spent and spent, as if there were no tomorrow. There is no better example of an authority spending, regardless of the circumstances, yet the story there is one of perpetual and steady decline.

Labour Members must accept that in 11 of the 15 years from 1964 to 1979 we had Labour Governments. So what are these panaceas that we are now hearing about? We have heard it all before, yet throughout that period, and still now, the basic malaise of the British economy has continued and their response has been, not an answer, but one that has compounded the problems of the economy. We shall not get more jobs unless we sell more; we shall not be able to sell more unless we increase our market share at home and abroad; and we cannot do that unless we become more competitive.

When they were in Government, Labour Members used to say—and they were right—that higher prices and higher inflation meant fewer jobs. That is as true today as it was then.

The regional problems relate in part to the recession. But there is also the region's nineteenth century inheritance. Coal, steel and textiles are particularly affected. Massive aid from Europe is already going to the coal and steel industries in the region. There is a major case for the EEC devising a policy for the textile industry. The rundown in that industry is as acute and as urgent as it is in the coal and steel industries. Yorkshire produces about a quarter of the country's textiles. It is important to maintain that presence, as it is to produce the steel that we need.

We must look to the future and recognise our competitive position in terms not only of the market and products but of training. Training plays a fundamental part in the success of industry in France, Germany and Japan. In France, in Germany to some extent and certainly in Italy, regional problems have also arisen. However, productivity gains there have been higher than here. One of the chief reasons for that has been training.

We have a major problem in that young people are coming out of our schools with no jobs to go to. One of the Government's most important acts is their new training initiative. It is vital that we act quickly and boldly on their training proposals.

The region contains a wealth of ability and facilities for higher education. We have not yet tapped fully and properly higher and further education for training and skills to meet industry's requirements. We could do more to develop the skills of young people who leave school with weaknesses in their basic education. We should find better means of dovetailing the further and higher education system to meet the needs of local industry.

Higher and further education could do a great deal in business education. I am referring not to degrees at business schools but to short courses geared to develop the initiatives and inventiveness of people who might wish to set themselves up in business. There is a gap in our system. We teach skills, but we do not concentrate enough on providing the skills and knowledge which will enable people to set themselves up in business. We have done a great deal in terms of advance factory work and in the encouragement of small businesses, but we could do more to draw on higher education as part of the strategy.

We have talked many times about the importance of high technology. As a region we have suffered from the legacy of the first industrial revolution. We are now going through the second industrial revolution—that of high technology, the microprocessor era. We could tap our higher education system in that area more than we do.

Yorkshire has a concentration of higher education facilities which is unmatched except, perhaps, by the Greater Manchester area. There are Sheffield, Leeds, Hull and Bradford universities. Bradford college is big enough to be—and should be— a polytechnic. Leeds and Sheffield already have their polytechnics. There is a tremendous amount of ability and talent in these institutions. The county did not make a good job of highlighting this ability and resource when it put in its bid for Inmos. There were other reasons why it did not get Inmos, but it did not make as much as it could have of its higher education facilities.

We are about to launch into a third industrial revolution—that of microbiology. As the region has not done as much as it might have done in the high technology area of microprocessing, it is vital that the Government and local authorities, together with the institutions, find a way to draw on the inventiveness and ability now in the universities in this new area. It is an opportunity that Britain should seize so that it can lead the world rather than follow behind as it has done so often in the past.

9.5 pm

Mr. Frank Hooley (Sheffield, Heeley)

It was superbly ironical that the hon. Member for Ripon (Dr. Hampson) should take as his two themes training and higher education. The House has recently passed a Bill destroying the whole basis of industrial training and the apparatus that Conservative Governments themselves created. I receive letter after letter from universities expressing alarm and dismay about the attack on higher education being launched by the Government, partly through the overseas students' fees and partly through the intended cut of 8 per cent. in university incomes during the next few years.

Conservative Members should make up their minds about which policies they support. Member after Member has said that he wants a free market economy rather than public intervention. They then listed a whole range of things in their constituencies for which they want public support.

In April 1979, 13,000 people were unemployed in Sheffield, 4½ per cent. of the work force. The latest figures for June show that 32,000 men, women, boys and girls—10.9 per cent. of the Sheffield work force—are out of work. That is a direct result of the Government's policy. Within that figure 5,000 boys and girls are out of work, and by the autumn it is reckoned that 8,000 will be out of work, with not the foggiest prospect of finding jobs in Sheffield in the near future.

The engineering industry training board—which has fine equipment and an excellent teaching force—was taking 280 first-year apprentices each year until a short time ago. It is now expecting to take 40 apprentices in September. That is an example of the catastrophic fall in the training effort as a result of the decline of industry in Sheffield.

Sheffield is linked to the economy of the whole country. For the car industry it produces crankshafts, clutches and overdrives, and our factories depend on its well-being. Mention has already been made of the highly specialised aircraft parts for aero-engine turbines. Sheffield produces specialised equipment, such as valves, for the North Sea. It is geared to the national economy. Much has been said about the steel industry, as though money had been poured into it for no purpose and with nothing to show for it. But we have a fine stainless steel plant in Shepcote Lane, an important continuous casting plant at Templeborough, and in River Don the heavy forging capacity is almost unique in Europe, and certainly unique in Britain. Even firms in the private sector such as Firth Brown and Hadfields have good equipment available.

Dr. Hampson


Mr. Hooley

The hon. Gentleman has made his speech, and there are only about two minutes left of the debate.

The overall macro-economic policy of the Government has destroyed the capacity of firms to operate profitably. High interest rates, high energy costs, the high value of sterling until recently, the cuts in public expenditure and overall deflation have wrecked the economy for the firms in Sheffield which, inherently in their equipment, knowledge, skill and manpower, are fine firms that simply cannot operate in the economic climate that has been created in Britain.

I have no time to develop the economic argument. The way to get the economy moving again is by massive public investment, not simply subsidies, in major industries such as telecommunications—where a technical revolution is in progress—public transport—through the electrification of railways—by further modernisation and development of the steel industry and in energy supply to ensure that we have coal, in experiments such as the liquefaction of coal, in the expansion of the activities of the British National Oil Corporation and those of the British Gas Corporation in exploration in the North Sea, in cars and trucks by sustained investment in the programme for British Leyland and in computers and microprocessors by using the National Enterprise Board. We must use the NEB and the Scottish and Welsh Development Agencies to channel resources.

The Minister asked earlier "Where is the money to come from?" The pension funds have £10 billion a year to invest and North Sea oil revenues are likely to increase by several billion pounds over the next three or four years. The effort that I have described would not in the slightest degree damage the private sector. The public sector is the customer of the private sector. In 1979 British Rail bought £710 million worth of equipment and services from the private sector. The British Gas Corporation spent £1,436 million, the Post Office spent £1,625 million, the electricity supply industry spent £900 million and local government spent £6,000 million. However, the Government are trying to cut local government spending.

Housing could be one of the greatest factors in cutting unemployment and giving an impetus to our economy. In Sheffield there are 28,000 on the housing waiting list. The only contribution that the Government can make to Sheffield's housing programme is to wage a savage vendetta on the issue of selling council houses. These sales are irrelevant to the needs of Sheffield people. They do not provide one extra house and neither do they lead to modernisation. It is the sale of public property at a scandalous and swingeing cost to the taxpayer's purse.

We need massive investment in industry, in our social infrastructure and in some of the areas catalogued by the hon. Member for Skipton (Mr. Watson). Sheffield above all could benefit from such a programme.

9.13 pm
Mr. Edward Lyons (Bradford, West)

I understand that the speeches of reply from the Front Benches are to begin shortly. Therefore, I shall truncate my remarks.

When the Government introduced their economic policy of cutting taxes and implementing a strict monetarist policy, they must have thought that the results would show after three or four months. Had they imagined that after two years there would be no sign of success, it is impossible to believe that they would have introduced the policy. It would have been dishonest of them not to tell the electorate what they envisaged.

In West Yorkshire there are 100,000 out of work for the first time since the war, and 50,000 jobs have been lost in the past 18 months. The area lost 7,000 jobs in engineering in the past 18 months and for every one job that has been created five have been lost in the same period. In Bradford there is unemployment of 12.7 per cent., and 23,190 are out of work. The figures are incredible. It is predicted that 60 per cent. of this year's school leavers will have no job. They will be unemployed or on Government special measures that are merely putting off unemployment. That means demoralisation.

I visited a youth club where none of the members is employed. It is in a multiracial area in Bradford, where the degree of unemployment amongst ethnic minority youth is higher than amongst the indigenous youth—and it is bad enough for the latter. That makes the situation even worse.

As there is a shortage of time I shall try to say in a couple of minutes what I think should be done to help. I agree with the Government that the problems cannot be cured overnight. I accept that we do not want overmanning and that we should aim at high productivity. I appreciate that the Government have to pay a great deal towards the operation of nationalised industries. None the less, the Government must use the resources from North Sea oil to undertake a massive capital investment programme. They must create employment by an energy-saving programme. They must initiate a massive training programme for young people so that they have a skill when the time comes, one hopes for them, to be able to get a job.

It is no use the Government's saying "We wash our hands of it". I appreciate their problem, but they should at least undertake that there will be no tax cuts as a result of North Sea oil revenues, and the money should be used for capital investment programmes to create employment. They should abandon the immoral commitment to cut taxation in this situation.

I ask the Government to think again about their policy. I know that they cannot cure everything overnight, but they must alter their ways to try to give people a chance in life. Otherwise, our youth will be in the most terrible state and demoralised. That would be a disgrace.

9.16 pm
Mr. Austin Mitchell (Grimsby)

It is extraordinary that in an area in which there is so little good to say for what has been happening over the past two months the speeches have been so long. Good news for Yorkshire and Humberside is as scarce as rocking-horse droppings, as they say in Yorkshire. Yet the speeches have not demonstrated that by their length. It is also extraordinary that for South Humberside we have a quick gabble of two or three minutes at the end of a debate devoted to that major area.

South Humberside—Grimsby in particular—is an area which has shown its determination to hold itself up by its own boot straps by its programme of diversification into various industries, which have eased the burden placed on fishing in the past. Now the basic fishing industry and the industries into which the area has diversified are being hit by the Government's current policies.

The fishing industry is most strikingly being hit by the Government's insistence on hand-to-mouth aid measures rather than planning what they will do for the industry—for example, giving us a proper marketing system and a system of aid and restructuring help. The Government are trying desperately to hand over the problem to the Common Market to obtain a death grant for the burial of the industry rather than fulfilling their responsibilities by investing money and rebuilding that industry so that it can compete effectively, as it can.

The general industries into which South Humberside has diversified are being hit by two factors. The first is the overvalued pound, which, despite points made by Conservative Members, has come down only slightly in the past few weeks relative to the dollar. It is still grossly overvalued compared with other currencies. There has been a loss of competitiveness of about 40 per cent. since the Government came to office. The Government's proposals for holding wages, trimming costs and increasing productivity are as nothing compared with the disastrous effect of the overvalued pound on British industry, and on South Humberside in particular. I refer particularly to Courtaulds. Its costs are being cut to the bone. It is competitive. Yet, because of the appreciation of the currency, it is finding it more and more difficult to compete.

The second factor is the depressed state of the economy and consumer demand. There are many partial solutions—better communications, more aid, clearance areas and the development of industrial sites, such as the Pyewipe estates, to be built, I hope, in Grimsby. The only solution which will work and solve the problems of Grimsby, South Humberside and Yorkshire in general—we are representative of the national economy and closely tied to it—is an expansion of the national economy.

That expansion can come only by following the policies which will now be followed in France. It is a humiliation for us to have to sit and watch the French Government follow policies which our Government should follow. Those are the policies of borrowing more and applying that borrowing to investment and expanding the economy. It is ludicrous that, with 300,000 construction workers out of work, we are now heading for a housing shortage. The Government must spend, invest and stimulate the economy. That is the only way that Yorkshire and Humberside will be rescued from the slough of despond into which it has been consigned by the Government.

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

Twenty-four speakers have taken part in this important debate about an important region containing 5 million people. Looming over the debate has been the vast, dark shadow of unemployment and the devastation wrought by the Government's policies.

More than 250,000 of the region's workers are registered unemployed, but the true figure is nearer 300,000. Unemployment has risen by 122 per cent.—140,000 jobless people—since the Conservatives took office just over two years ago. Key manufacturing industries have suffered devastation. They are textiles, clothing, engineering, steel, glass construction and now even transport. So far the coal industry has weathered the storms well, but, had the NUM not taken strong and clear action a few months ago, there would have been more pit closures and a smaller market for coal.

A debate such as this inevitably concentrates on the problems of the region, but it is important to recognise the strength and potential of Yorkshire and Humberside. The region has a wealth of human and natural resources, as many have said. Its skilled labour force, backed up by colleges, polytechnics and universities, has a tradition of excellent industrial relations. Its natural resources include not only magnificent scenery in the dales, moors and Pennine valleys, but rich agricultural land and coal, with its associated power stations. It is often not realised that Yorkshire contributes more than a quarter of the nation's coal and provides 16 per cent. of the United Kingdom's generating capacity.

Hull and Grimsby are nationally significant ports. We also have excellent road and rail communications, although improvements are still needed in the south Humberside road system and Sheffield's rail links still need improving. If electrification proceeds, as we hope that it will, Yorkshire expects to be at the front of the queue.

With all that industrial and natural strength, the Yorkshire and Humberside region does not come to a debate on its problems in a mood of weakness or despair. Its mood is rather one of frustration and anger. Government policies are destroying much that is solid and worth while and creating enormous hardship, worry and distress.

First, I address myself the some of the important issues facing the region. Many hon. Members commented on assisted area status and regional policy. In a thoughtful speech, my hon. Friend the Member for Rotherham (Mr. Crowther) linked regional and industrial policy. He argued that planning and intervention were necessary and that we could not rely only on market forces. My hon. Friend the Member for Dewsbury (Mr. Ginsberg) commented on the problems of West Yorkshire, and particularly the heavy woollen industry. I shall return to that matter.

In July 1979, the Government rushed out the results of their regional review. The region feels that the resulting package makes little sense in parts and needs adjustment in others. For example, the situation in Scunthorpe and Mexborough may justify upgrading to special development area status. West Yorkshire has an exceptionally strong case, at a minimum, for the restoration of assisted areas status to the textile towns and coal areas.

My hon. Friends the Members for Rother Valley (Mr. Hardy) and for Sheffield, Heeley (Mr. Hooley) mentioned the young unemployed. Unemployment is traumatic for anyone. It is always worrying and brings many stresses and strains, and for young people it is becoming increasingly serious. Local authorities are greatly concerned. The demand for full-time further education courses for school leavers often exceeds the places available, yet education authorities are being asked to make more cuts and not to increase their spending programmes.

At a time when we should be improving the skills and training of our young people, apprenticeships are declining. Employers are cutting back on the number of places that they can offer to young students on sandwich courses, and universities are also cutting the number of places. There is an urgent need for a far more amibitious programme of training linked to work experience. There should be shorter courses, linked to industry's needs, as people may have to change the nature of their work several times during their lives.

Special attention must be paid to the needs of minority groups, especially girls and those with lower levels of qualification. A revision of the Manpower Services Commission's programme is needed to meet these and many other points and to provide specific skills training rather than the present system of work experience and youth opportunities schemes which provide no specific training opportunities. The Yorkshire and Humberside county council has pressed the Government, as have many who have spoken today, to give the region youth unemployment priority status. I hope that the Minister will give us his view on that matter.

I turn to the problem of dereliction and coal waste to which many hon. Members have referred, including my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery). Yorkshire and Humberside includes some truly beautiful scenery—not least, as I have mentioned, the dales, the moors and the valleys—but it also has concentrated in the South and West of Yorkshire some of the worst scars of our industrial history. One-eighth of the nation's derelict land which justifies treatment is situated in these two highly urbanised counties. More than half of the total current colliery tipping in the whole of England is concentrated in South and West Yorkshire. Moreover, the rate of tipping is accelerating. The present scale of dealing with the problem and the financial framework within which decisions are made are clearly inadequate. If nothing is done to improve the position, we shall be left with it in not one but two generations' time. More must be done about this problem.

Finally, I turn to industrial policies. Many hon. Members have touched upon their individual industries. My hon. Friend the Member for Leeds, South-East (Mr. Cohen) spoke of his experience in the clothing industry. My hon. Friend the Member for Kingston upon Hull, West (Mr. Johnson) spoke at length of the problems of the fishing industry, of which he is so knowledgable. My hon. Friends the Members for Rother Valley and Grimsby (Mr. Mitchell) spoke of the steel industry and the fishing industry respectively. Each industry faces its own problems. In some cases, what is required is a greater sense of purpose by the Government to support the industry. Where reduction or unemployment is to occur, there is an urgent need for a total rethink by the Government of their approach to industrial and regional policy.

Governments of other countries help to restructure and revitalise their older industries. Not only France and Germany, but even the most Right wing Governments in the world appear capable of planning and linking their resources—not least oil resources—to the need to restructure their economies. Yet many observers, including many Opposition Members, might conclude that the British Government were inherently incapable of facing planned intervention on the scale necessary to tackle this country's problems.

Mr. Tebbit

How much does the hon. Gentleman think that we are putting into restructuring the motor industry and the steel industry.

Mr. Woolmer

I shall be dealing briefly with the Minister of State's earlier remarks which, had he uttered them in Yorkshire, would have been regarded as at best insulting. If he would look at the efforts being made and the problems being faced by the textile, clothing and engineering industries in Britain, I should be prepared to consider whether the Government have a policy. The Government have slipped by default into having to face the reality that, after an election, they have to do something about industry's problems. The Minister of State need not tell us about the steel industry and the car industry, which got into problems under private ownership. We have heard Conservative Members wingeing and whining about the problems of private industry, but, when it comes down to it, the Government and their supporters realise that Government intervention is needed.

All those individual problems considered, the fact remains that the main requirement for regional recovery in Yorkshire lies in a drastic and fundamental change of direction in the Government's economic policies. This is not the occasion on which to go through the list of woe of individual communities in Yorkshire and Humberside. Nevertheless, one cannot overlook the fact that unemployment is more than 20 per cent. in Mexborough—the highest in England, with the exception of Consett and Corby. One cannot overlook the unemployment rates in Doncaster, Rotherham, Barnsley, Hull, Bradford and the West Riding textile towns. Under the Tories, unemployment has risen by 230 per cent. in Halifax and Huddersfield, 211 per cent. in Dewsbury and Batley and 183 per cent. in Keighley.

I notice that the hon. Member for Brigg and Scunthorpe (Mr. Brown) has not spoken today. Scunthorpe is a steel town and unemployment there has increased by 220 per cent. during two disastrous years of this Government's economic madness. Those are tragic figures, if only in terms of the human misery and the individuals involved.

What do the Government intend to do to reverse this picture of unmitigated economic disaster? The hon. Member for Colne Valley (Mr. Wainwright) referred to the Yorkshire Post. However, he did not point out that this morning's editorial contained the headline "Hopeless optimism." That was that newspaper's description of the Government's economic policies. The article referred to The Government's growing panic at the apparently inexorable increase in unemployment". That is the summing up given by Yorkshire's Tory press.

There are many ways in which the Government could and should change their policies in order to encourage and help Yorkshire and Humberside. However, it should be remembered that, above all, individual policy changes will be mere palliatives unless there is a drastic and radical change in the Government's overall economic policies. Conservative Members glibly talk about giving assistance to small businesses. They encourage people to go into them. Good luck to the individuals concerned. However, do Conservative Members point out the record level of bankruptcies, closures and liquidations? That is what faces small business men.

Britain is going through the same process as was witnessed in the 1930s. There has been an increasing number of mergers and industry is gaining an increasingly monopolistic structure. When historians look back at this period of government, they will see that and not the growth of small business. In the country at large, production is still falling. Unemployment is still rising. Prices keep rising. The long-term forecast for economic improvement is continually postponed. It is always just round the corner, but we never seem to get round to it.

Industrial investment is falling sharply, yet it is the seed corn of future growth. Manufacturing exports are in decline. They are sustained only at grossly inadequate margins as firms struggle simply to survive. There is a danger that the autumn will bring a new wave of redundancies and closures as short-time working compensation schemes run out, as market prospects fail to improve and as business men find that they have been grossly misled by this "hopelessly optimistic" Government. As my hon. Friend the Member for Hemsworth (Mr. Woodall) said so forcefully, industrial Yorkshire demands a change in the Government's policies.

Profits from North Sea oil and gas and profits from banks and other City finance institutions bring nothing but misery and decline to the manufacturing areas of the North. Our people in Yorkshire speak openly of the two nations of North and South. They feel that the Prime Minister and her Cabinet understand little about the situation north of Watford and care even less. As Conservative Members must know, that is the view held in Yorkshire. We need a change of direction and economic expansion. We need increased demand, lower interest rates and a more competitive pound. We need direct investment and industrial planning by the Government, with policies that are aimed at structural change.

What sense is there in creating still more unemployment and in denying that there is the finance and manpower to build more houses when the dole queues are approaching the 3 million mark? How can we say that there are no resources available to clear up the dereliction that is a major problem in coal mining areas? How can we say that there are no resources available to improve road and rail communications? The housing situation in the region is deteriorating rapidly. With house building at a virtual standstill, council house waiting lists grow daily. The construction industry is in despair. In the Humberside county council area there has not been a programme for the internal painting of schools for six years. Some schools have not been painted for 12 years or more. While banks and building societies can refurbish their offices in grand style and can open new plush palaces, our schools, our old people's homes, hospitals and so on have to grow shabbier by the month.

My hon. Friend the Member for Hillsborough commented on that, and the Minister argued that Conservative councils in the region had looked after their money whereas Labour councils had not. The Minister also argued that there had been low rate increases in Conservative authority areas whereas Labour councils had imposed high increases.

Mr. Tebbit

I did not mention the political affiliations of any of the councils to which I referred. The hon. Gentleman may know them, but that is a different matter.

Mr. Woolmer

The Minister knows that we are not as naive as that. For example, he mentioned North Yorkshire. The interesting thing is that North Yorkshire, under Conservative control, faces an 8p in the pound rate surcharge, twice as much as the South Yorkshire county council. Humberside, which has just come out of Conservative control, faces a rate penalty of 7½p in the pound which has been imposed by the Government, more than double that facing West Yorkshire county council.

That shows the hypocrisy of Conservative Members who argue that what is needed is more cuts in Government and local authority expenditure. The truth is that there are increasing public squalor and a threat to decent public services. Meanwhile, unemployment approaches the magic figure of 3 million. My message to the Government is to give Yorkshire folk the opportunity to work. Offer people in Yorkshire a job, and the response will be absolutely overwhelming. A vacancy in my area for a general labour handyman with NEGAS recently attracted 200 applicants. A vacancy for a checkout operator in a Yorkshire store paying only £1.40 an hour had 40 applicants. A garage not far from my area advertised for a full-time forecourt attendant, including all day Saturday, paying only £25 a week. As someone said, the Government's philosophy is just like that of Marie Antoinette—"Let them eat cake".

With nearly 300,000 jobless in Yorkshire and Humberside, unemployment is now at a level not seen for almost 50 years. It is still rising. Our great industries of engineering, steel, textiles and clothing have been decimated by the Government's disastrous economic policies. Investment in new machinery and buildings—the seed corn for future growth—is falling rapidly. Prices keep rising, often deliberately pushed up by Government action—for example, council house rents, gas and electricity prices and postal charges. The only thing more difficult to find in Yorkshire than a job is someone who will admit to voting the Conservative Government into office two years ago.

It has been a truly disastrous two years of monetarist madness. The trouble is that it is not hurting the Government. The real hurt is being inflicted on hundreds of thousands of Yorkshire families, plagued by the threat or reality of unemployment and falling living standards. The Government have long ago forfeited the confidence of the North. If the Prime Minister and her doubting Cabinet Ministers do not have the guts to change course, let them give the electorate the opportunity to show their feelings through the ballot box.

Even if the City of London can manage it, the industrial North of England cannot afford—and certainly does not want—this Government in office. Yorkshire's message to the Government is clear: change policies or go, and stand not upon the going.

9.39 pm
The Under-Secretary of State for the Environment (Mr. Giles Shaw)

On the whole we have had a pretty good natured debate, bearing in mind the severe problems which practically every hon. Member has had to recall about his constituency. There is no doubt that the first point of agreement must be that the scale of the problem in Yorkshire, as elsewhere, requires the greatest possible concern to be expressed and the most effective action to be taken. The more that we listen to the requirements of the Opposition, the more we seem to be hearing the theme that we heard in 1978 and 1979, which the electorate rejected. They require more borrowing, more taxing, more spending, but less in return for it. One of the lessons that I hope has come through the debate, especially as it affects Yorkshire and Humberside, is that the native sense of the people in Yorkshire and Humberside looks for different solutions this time round.

A number of points have been made by individual hon. Members and I have a short time in which to comment and answer some of the questions. The hon. Member for Pontefract and Castleford (Mr. Lofthouse) referred to some of the problems of the coal industry. That has been the theme of several hon. Members, including the hon. Members for Rotherham (Mr. Crowther) and for Rother Valley (Mr. Hardy). I remind the hon. Member for Pontefract and Castleford—indeed, the hon. Member for Batley and Morley (Mr. Woolmer) also referred to it—that when he speaks about industrial dereliction, that is a severe problem in the coal mining areas of West and South Yorkshire and in the steel area of West Yorkshire. A coal industry producing vast amounts of coal that is stocked in large heaps all over the country adds to and compounds the difficulties Dosed for our landscape by industrial dereliction.

In pursuing a policy for coal which needs a greater concentration of resources to make good the ravages of time, we must ensure that we are not making that more difficult by stock piling coal that we cannot sell because the price at which we have extracted it is too high for people to buy it. However, I must give the hon. Gentleman the encouragement, which the hon. Members for Rotherham, For Rother Valley and for Hemsworth (Mr. Woodall) will also recognise, that in the new Town and Country Planning (Minerals) [Lords] Bill we have for the first time a reclamation and restoration policy that will ensure that minerals operations will no longer be permitted to desecrate so much of our industrial and rural landscape, but will be confined within the terms of a planning agreement.

Mr. Allen McKay

The Minister spoke about stocking coal. Would it not be more sensible to stop importation and to use coal from stock?

Mr. Shaw

The sensible policy is to sell coal at a price appropriate to the market. The right hon. Member for Wakefield (Mr. Harrison), despite his enforced silence, has been a strong operator on behalf of his constituents. We are glad to see him in his place. The pre-vesting decision was discussed in Committee. In the record of the Committee there is plenty of agreement between the National Coal Board and the Department that what is in the Bill will not seriously endanger their interests.

My hon. Friend the Member for Howden (Sir P. Bryan) discussed many matters in his speech, including the French turkey development at Roscoff in Brittany. My right hon. Friend the Minister of Agriculture, Fisheries and Food has that firmly in mind and has met delegations from the National Farmers Union and others. I assure my hon. Friend that much effort is being put in to resolve that problem.

My hon. Friend also spoke about the Humber bridge and road problems for his constituents. I am sorry to hear that the Market Weighton bypass problem is still unresolved. I recall journeying many times to Kingston upon Hull, West in the days when I was a candidate in that constituency. It is high time that my right hon. Friend considered the problem, and I shall urge him to see what can be done to resolve that matter; likewise the Selby toll bridge.

Mr. Woolmer

Passing the buck.

Mr. Shaw

One cannot pass the buck on the Selby toll bridge. One has had to pass 4p—or the equivalent of 4p—since 1782. If that is not conservatism, I do not know what is.

The hon. Member for Leeds, South-East (Mr. Cohen) and my hon. Friend the Member for Shipley (Mr. Fox) mentioned textiles, We must concede that the state of the market for wool textile products and clothing activity is at a low point. We must equally concede that it is not entirely because the industry is starved of funds or is inefficient. The House will recall that under the section 8 scheme for the wool textile industry about £23 million has been invested in re-equipment, and many of the old machines have been replaced. But, equally, we must recall that the biggest single problem of the textile industries is the market in which they sell their goods.

Hon. Members on both sides would have been encouraged by the robust way in which my right hon. Friend the Secretary of State for Trade set out the case on the renegotiation of the multi-fibre arrangement. I recall taking part for many years in all-party delegations to urge upon the Government of the day a robust attitude to matters such as an economic clause so that from time to time the amount of import penetration that is permitted can be altered. That is now a part of the negotiating posture.

I take the point raised by my hon. Friend the Member for Shipley on origin marking. I agree that the statement is not as strong in that respect as he would have wished, but in the matter of origin marking and in regard to Taiwan in particular—the hon. Member for Leeds, South-East was in that country—a substantial stand has been taken by my hon. Friend the Minister for Trade on engineering and automotive parts from Taiwan. As hon. Members may know from a debate that was held just before Christmas, he made it clear that he intended to attack the Taiwanese Government very seriously on that issue. I take encouragement from his view on trying to prevent the counterfeiting of patents. That should also be applied, in my judgment, to the problems of origin marking. I hope that the robust attitude will flow through from the debate and that my hon. Friend the Minister for Trade will take due note of the fact that origin marking is a matter on which the textile Members would wish to see further steps taken.

The hon. Member for Colne Valley (Mr. Wainwright) gave us the most astonishing and penetrating Liberal advice when he said that the pound was far too high and that we should therefore spend £3 billion and have a prices and incomes policy.

I now pass to the comments of my hon. Friend the Member for Scarborough (Mr. Shaw), who made some potent remarks about the fishing industry. I consider that the subject of the fishing industry—the inshore fleets, which my hon. Friend the Member for Bridlington (Mr. Townend) discussed and also the deep sea fleets—is one which requires to be dealt with in the negotiation of the common fisheries policy.

I know that the hon. Member for Kingston upon Hull, West (Mr. Johnson) always refers to the pantomime of the common fisheries policy, but he knows that it is no laughing matter. There must be adequate insistence on our quotas and on our access and on a proper long-term future for the industry against which investment can be planned.

The fishing industry had £54 million originally, and then £25 million in more recent times, albeit from hand to mouth, as the hon. Gentleman suggested, but these are significant sums of money during a period when we are seeking to have a long-term policy against which proper investment can be planned. I suggest that that is the best possible posture for the country to adopt at this time.

Mr. James Johnson

The hon. Gentleman is talking about EEC waters and about inshore and middle water boats. Does he honestly think that there is any future for the long-distance deep-water fleet?

Mr. Shaw

The hon. Gentleman knows that I cannot answer that question. That is a matter for my right hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food, who handles fisheries matters. But I suggest to the hon. Gentleman that there must be a firm and agreed negotiation of the common fisheries policy, based upon proper conservation policies, upon access, and upon an exclusive zone. Those are the objectives that my right hon. Friend is seeking to negotiate.

My hon. Friend the Member for Bridlington gave his view of wages councils and their influence on average wage rates. He mentioned the disincentive to employment. I take note of what he says. I should like to draw it to the attention of my right hon. Friend. There must be an influence here, but I do not believe that it is an influence that should necessarily mean that one removes the real contribution that wages councils have made to preventing very low wages from being established in ill-organised industries. I take his point in particular on the matter of apprenticeship rates. This theme has emerged from several contributions. The whole question of arriving at an agreement on the correct rate at which an apprentice should be paid in relation to average industrial earnings or average craft earnings clearly requires some further consideration.

My hon. Friend the Member for Harrogate (Mr. Banks) spoke in support of what the Government were doing. I apologise for having been absent during his welcome intervention in what has been, as far as I can see, a debate in which most hon. Members have been highly critical.

The hon. Member for Rotherham expressed his views about the ineffectiveness of regional policies. He will know that in that part of South Yorkshire there have been considerable investments not only of United Kingdom funds but of European funds. I know that the hon. Member for Rother Valley shares the good will that attends the development of the South Yorkshire navigation, which has been a considerable investment in that part of the region.

The hon. Member for Dewsbury (Mr. Ginsberg) was concerned about the cost-effectiveness of our regional

policy, and in particular of grant aid. I agree with him. That is exactly why my right hon. Friend the Secretary of State, in his review of regional aids, was determined to ensure that they were spent in the most cost-effective manner possible. It is no good trying to have a system in which one preaches effectiveness and efficiency while spreading the aid so thinly that about 44 per cent. of the country will be covered by it.

My hon. Friend the Member for Skipton (Mr. Watson) made some interesting observations and advanced a strong argument for local investment in new infrastructure. I take my hon. Friend's point, but he must equally take the point that any further increase in public expenditure at this time must put at risk the amounts of money available in the private sector and the Government's overall financial policy, which is to restrain interest rates and to regenerate the economic base.

However, I take the point that the consequence of local infrastructure development would be to provide much-sought-after employment and probably a continuing stimulus to local suppliers and to new infrastructure—one of the ways in which the Yorkshire water authority's investments in Yorkshire have provided a great deal of spin-off in these difficult times. It has a high-spending programme, much of it in areas such as my hon. Friend's, which are further away from town centres.

Mr. Richard Wainwright

The Minister has implied that private investment would be crowded out if more attention were given to the private infrastructure. Can he give any example of useful private investment being crowded out during recent months by any threat of public expenditure?

Mr. Shaw

This is all part of the Government's intention to reduce public expenditure to allow them to bring down the inflation rate and the interest rate. The hon. Gentleman knows that one of the biggest constraints on private investment is a high interest rate. As soon as there is a chance of bringing it down further, private investment will grow. Should there be increased public expenditure, the interest rate will not come down.

I turn to the question put by my hon. Friend the Member for Brighouse and Spenborough (Mr. Waller), who referred to some of the activities of local councils, and in particular the Kirklees district council, which has now declared a nuclear-free zone. When we are all aware of the problem of providing jobs, it is astonishing that a local authority that seeks to encourage industrial development should suddenly take a policy decision that may well reduce the number of jobs in engineering or ancillary industries that depend upon orders in, say, the nuclear power industry. It is an absurd attitude and the very negation of what most local authorities should be seeking to do.

The hon. Member for Rother Valley was very anxious about the coal industry. He shared the views expressed by his hon. Friend the Member for Rotherham.

I turn to advertising for apprentices. I understand full well the anxiety that apprentices are now finding it difficult to get a proper grounding in their craft, because many private sector employers are unwilling to take them on at present rates. I accept that we must examine the matter. I am sure that my right hon. Friend the Secretary of State for Employment is concerned about it.

My hon. Friend the Member for Huddersfield, West (Mr. Dickens) wanted a special rate for gas and electricity based on the fact that the region is located closer to energy sources. I cannot help feeling that national resources should be planned in a national manner for the benefit of the nation as a whole.

The hon. Member for Sheffield, Hillsborough (Mr. Flannery) referred to South Korea and counterfeiting cutlery. I am aware of the problem. I suggest that the hon. Gentleman takes some heart from the robust answer of my hon. Friend the Minister of State, Department of Trade, who is clearly handling the matter of counterfeiting from Taiwan in an effective manner.

The hon. Member for Sheffield, Heeley (Mr. Hooley) referred to high interest rates and investment. I must remind him that British Rail has an external financing limit for the current year, 1981–82, of £920 million, that British Telecommunications has an EML of £380 million, and that more than £1 billion has been put into the steel and motor car industries in this year alone. These are massive sums of taxpayers' money being made available for the public sector.

It is no good Opposition Members taking the grandiloquent view that this Government, for some reason, pay no regard to the major public service enterprises. The fact is that we have been forced, much against our will, I suspect, so far as my hon. Friend the Minister of State is concerned, to spend large sums of money on these loss-making industries in what we hope is a final attempt to turn them round, to make them profitable and to develop them again.

I turn to the main themes that we should now be considering. We have had an exchange of views ranging across a wide spectrum of constituencies in Yorkshire and Humberside. There emerges a sense of great diversity within this twin region. That diversity is, in times of economic difficulty, a source of great strength. Some places are known to be single industry locations. We have discussed, in the case of Humberside, the problem of Scunthorpe. There are other areas of the country which are virtually single industry regions. Once that industry hits hard times—and such times must assuredly come round—the whole region suffers. We suffer in Yorkshire and Humberside. I remind hon. Members that, as a West Yorkshire Member, I share this suffering in relation to my constituency of Pudsey. I have to confess that diversity must be our first source of strength.

Secondly, we have substantial resources, particularly in energy. The coal revolution may come again. It has taken a long time in relation to price and efficiency of pits. It is clear, however, that the region's resources in coal, including the development of the Selby coalfield, make certain that Yorkshire coal production will be a major national asset long into the future. Our access to North Sea oil and gas is also vital for industrial development.

Thirdly, we have amazingly effective communications in our favour. Many hon. Members have referred to the opening of the Humber bridge last week. Many will recall the disbelief among some hon. Members that this day would ever come. It may be four years late. It may have cost £91 million as opposed to £4 million. The clay has, nevertheless, come. I recall the by-election in Kingston upon Hull, North. I am sure that the hon. Member for Kingston upon Hull, West was canvassing for his man as I was canvassing for ours. Suddenly, the former right hon. Member for Blackburn, then Mrs. Barbara Castle, produced in the middle of the by-election campaign the Humber bridge. I suppose it is because of the Humber bridge that we are blessed with the presence in the House of the hon. Member for Kingston upon Hull, Central (Mr. McNamara).

The region has a motorway network, described by my hon. Friend the Member for Howden as a motorway box, that is vital to industry.

Fourthly, there is in the region a great willingness to work. I pay full tribute to all who work in Yorkshire and Humberside industries. We have the right attitude to work. Long may the region retain it.

For the future, we must say that there will be no more borrowed jobs, borrowed time or borrowed money that we cannot produce. In Yorkshire we have assets that, given reasonable local authority encouragement, good development, which we have—the necessary investment in the infrastructure has largely been made; investment in most of our industries has not tailed off except in the recent past—[Interruption.] The investment in the textile industries has been very high for many years. We have industry which is highly competitive, well-invested and has strong management—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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