Peterlee Development Corporation (Hansard, 18 November 1981)

§ Mr. Jack Dormand (Easington)

When the dissolution of Peterlee development corporation was announced in June 1980, I immediately saw the two Ministers concerned to express my s lock at such an astonishing decision. The Ministers were the hon. Member for Tonbridge and Mailing (Mr. Stanley), the Minister for Housing and Construction, and the hon. Member for Hampstead (Mr. Finsberg), at present the Under-Secretary of State for Health and Social Security. They said then, and the Government still say, that 31 December 1985 is a target date only and that dissolution of the corporation might not occur on that date. I suspect the Government's sincerity.

The most important question that I have asked is "Why 1985?" The evidence is overwhelming that the need for this job-finding agency will continue long after that date.

When the matter was considered by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) when he was Secretary of State for the Environment, he quickly and firmly came to the conclusion that there would be no dissolution while the job need existed.

There can be no doubt about the Minister's assessment of the work done by the Peterlee development corporation. The Minister for Housing and Construction, when he was visiting the new towns of Aycliffe and Peterlee, said on Aycliffe community radio in July 1980: We have three, extremely important new towns here in the North-East which are very important nationally, and probably even more important in regional terms. All three have done an absolutely first-rate job in expanding industrial opportunities and providing economic growth to the North-East. There does not seem to be any doubt in the Minister's mind about the value of what the new towns, including Peterlee, are doing.

Everything that was said then applies with even greater force today when unemployment is higher and continuing to rise. Unemployment in the Easington district is currently 17.6 per cent. It is at least as high in surrounding areas. I stress that the jobs created by the Peterlee development corporation serve not only my constituency and the new town but areas to the north, south and west. Two excellent roads, the A19 and the A1, make commuting to Peterlee easy.

The corporation's record speaks for itself. Between 1971 and 1980 total employment on the industrial estates in Peterlee increased from 3,531 to 5,345, and male employment more than doubled from 1,239 to 2,877.

Aycliffe and Peterlee are responsible—and this is astonishing—for no less than 75 per cent. of all the new jobs coming into the county of Durham. Aycliffe has the same development corporation as Peterlee and is in the constituency represented by my hon. Friend the Member for Bishop Auckland (Mr. Foster). He is unable to be present this evening, but I can assure the Under-Secretary that his concern about the proposed dissolution in 1985 matches mine.

My hon. Friends from the Northern region and I frequently tell the Government that, with the decline of the older, heavy industry in the region, we need new high technology and high quality industry. Peterlee is providing that with companies such as NSK, DJB Engineering, 398 Fisher Price and many others. The location of firms such as those in Peterlee is a measure of the effectiveness of the corporation.

I turn now to an aspect of the situation that is completely misunderstood by the Government. Ministers have repeated that the position of the corporation will be reviewed in 1983 or 1984 before a decision on dissolution is made. When I saw the Minister last year I said that it the decision was left until then if would be a serious disadvantage to the corporation in terms of morale, staff and physical development. It gives me no pleasure to say that that is exactly what is happening. There is considerable uncertainty among a staff that is young, dedicated, expert, enthusiastic and intensely loyal. There are already eight staff vacancies. It is understandable that, with this sword of Damocles hanging over their heads, they are looking to the future.

They are brilliantly led by Mr. Garry Philipson, the corporation's managing director, and more recently by the chairman, Mr. Michael Straker, an appointment made in the lifetime of the Government. To make matters worse, the Government have refused permission for other inducements to staff to stay with the corporation. I had lengthy correspondence with the Minister some time ago about offering the Crombie code to employees. The Government have failed to grasp the importance of the effect of their policy on the corporation and to our hard-hit area.

Why have the Scottish new towns been given until 1990 before dissolution? I have studied the Government's reasons carefully, and I saw nothing in them that cannot be applied to Peterlee. Moreover, the Scottish Development Agency provides a massive back-up. As is well known, the Government have consistently rejected the establishment of a northern development agency. I shall not pursue that argument this evening. I am one of many hon. Members from the North of England who have tried to persuade the Government, without success, to establish such an agency.

In making this plea, I have the full support of Easington district council. The present proposals are yet another demonstration of the Government's callous disregard for the North. The Northern region has an unenviable position at the top of England's unemployment league. That will be consolidated if Peterlee development corporation is dissolved in four years' time. The date 1985 has been plucked out of the air by an unthinking Government. There is not a shred of evidence to justify it. I beg the Government to think again about the matter.

The Minister must come to the area and talk to everyone concerned. He must see what is happening. If he does that, I am sure that he will quickly return to the policy of no dissolution while the job need exists. I give him the firmest assurance possible that our need for jobs will continue long after 1985.

§ The Under-Secretary of State for the Environment (Sir George Young)

The hon. Member for Easington (Mr. Dormand) has raised an important matter with conviction and logic. As he so rightly says, it is of concern not only to his constituents in Peterlee but to the North-East as a whole. His perception of the position has much in common with that of the Government.

Without, at this hour, embarking on a history of the new towns movement or a semantic discussion about the 399 difference between a proposal to wind up a development corporation and a target date for doing so, I must briefly make one point. It has always been understood, from the days of the first New Towns Act in 1946 that new town development corporations were not to be permanent bodies.

It is against that background that what has been said about the future of new towns in general, and those in the North-East in particular, must be considered. In his book "The New Town Story", published in 1970, Frank Schaffer wrote that: there has been controversy for 20 years about what happens to a town when it has been built and the battle of ideas still rages". Perhaps this debate is best viewed as a further stage in that battle of ideas.

It may be helpful if I explain what we mean by target dates. We do not mean a fixed and immutable intention to wind up a development corporation on that date, come what may. Apart from anything else, there is a statutory process that must be gone through before a development corporation can be dissolved and that requires us to consult the local authorities concerned. Target dates can be altered. I shall say more about that later.

How does all that apply to Peterlee and Aycliffe? I have already had the pleasure of visiting Aycliffe and I was very impressed with what I saw there. I hope to visit Peterlee in the new year and I am sure that I shall be equally struck with what has taken place there.

At present, well over half the new jobs coming into County Durham are coming to Aycliffe and Peterlee. At Peterlee, the development corporation has provided some 2.8 million sq ft of factory space on its attractive industrial estates, and a further 200,000 sq ft is currently under construction. Some 5,300 people work on those estates-1,800 jobs have been created since 1971, when the work force numbered some 3,500. That figure of jobs created is a net figure. This year, for instance, up to the end of October, 599 jobs were lost in the town with 714 being created—a net gain of 115. The corporation has to run hard to stand still—and it has done better than that.

It is particularly encouraging that, during the past 10 years, the number of jobs for men has increased from about 1,200 to nearly 2,900. One of the purposes for which Peterlee was designated was to provide employment for the men no longer needed as coal miners. As the pits and the other traditional heavy industries of that part of the North-East have declined, Peterlee's contribution in providing employment in new and growing industries has been vital. Nor is it just the quantity of new employment that is remarkable. The quality of the firms that have been attracted to Peterlee is impressive, including, as it does, several of high technology.

Fisher Price, of United States origin, is a household name. And, thanks to the energetic efforts of the corporation's previous chairman, Mr. Dennis Stevenson, Peterlee has been successful in attracting industry from Japan. A useful start has also been made in the provision of offices—a much needed diversification—with nearly 100,000 sq ft of office space constructed by the corporation, mainly in the town centre.

I know that, in spite of all the efforts, unemployment in Peterlee is high—16.9 per cent. last month for the Easington area, compared with 10.2 per cent. two years ago and 13.0 per cent. one year ago. Sadly, other new 400 towns have suffered more and have even higher rates. It is a tribute to the corporation that in the circumstances of the North-East it has kept the figures for Peterlee down to the levels I mentioned.

As the hon. Gentleman knows, it was not this Government but the last who decided to review the programme and role of the new towns—as part of their review of policies relating to decentralisation and the inner cities. One result of that was their announcement in July 1977 that Washington development corporation would be wound up in 1982. They did not give any dates for Aycliffe and Peterlee. That was because a proposal for an extension of Peterlee's designated area was under consideration at the time, not because they had any rooted objection to setting target dates for these towns. Indeed, in the same announcement, they made it quite clear that they expected both of the corporations to be wound up in the early 1980s. I think that that puts a slightly different gloss on the policy as interpreted by the hon. Gentleman when he implied that no commitment had been given by the previous Administration to wind up the corporations. The press notice put out on 29 July by the then Secretary of State for the Environment states: When a decision is reached on the request to designate more land at Peterlee, discussions will take place with the development corporations and local authorities concerned about the arrangements for winding up both development corporations in the early 1980s. As the hon. Member also knows, we believe that the right course, when a new town has reached a certain stage of development, is for it to become like any other town, with the shops, offices and factories owned by the private sector, not by a Government-appointed quango. We have therefore asked the development corporations to sell their assets as part of this policy. Also as part of this policy, when we took office we reviewed the target dates set by the last Administration. Our approach has not been doctrinaire, We recognise the valuable role that the three new towns in the North-East are playing in attracting much needed new employment to Tyne and Wear and to County Durham. It was for that reason that we decided that our predecessors had been wrong in the target date that they had suggested for Washington and we pushed it back for three years from 31 December 1982 to 31 December 1985.

I do not see how the hon. Member can claim against the background of that decision that we have been guilty of what he described as callous disregard for the North-East. I hope, therefore, that he will not question our sincerity, as he did at the beginning of his remarks, in approaching this with an open mind and a genuine determination to do what is best for his constituency.

The target date that we have set for Aycliffe and Peterlee—31 December 1985—seems to me to give the corporations a much longer lifespan than our predecessors envisaged in July 1977 when they were talking about winding up Aycliffe and Peterlee development corporations in the early 1980s.

The hon. Member asks why we need to have target dates at all and has argued about the effect that they are having and are likely to have on the staff. The development corporations for Aycliffe and Peterlee, which are two separate legal bodies with identical membership, have recently carried out a most thorough review of the staff employed in both towns and have been able to achieve some substantial savings. We are grateful to the board and to the present chairman for this. It is right that 401 public bodies should ensure that they employ only as many people as are needed for the work that has to be done. That should in turn give greater security to those staff who remain with the development corporations. I really cannot accept that a dissolution date more than four years hence is more unsettling than no date at all, or that the setting of a date has a disastrous effect on staff morale when, as I said earlier, it was always envisaged that the life of the new town corporations would be limited.

People who work in new towns have always known that their employment is finite. I think that they have welcomed the challenge and opportunities that such work has brought. I endorse the hon. Gentleman's tribute to the staff at Aycliffe and Peterlee for their work in the past both those who have now left and those who are staying on. I am sure that the new slimmed-down team will respond to the challenge that remains.

The hon. Gentleman asked what comparison could be drawn between the position in Scotland and that in the North-East. As I understand it, the position in Scotland, as set out in a recent consultation paper, was that it was proposed to retain the development corporations while they continued to generate industrial growth until each was near to reaching its designated population. It seems to me that that policy is consistent with what is happening in England. Because of their rate of development, the new towns in Scotland will not exactly reach their designated population until slightly later—East Kilbride at the end of the 1980s and Cumbernauld, Irvine and Livingston in the late 1990s—so I do not think that there is any inconsistency of approach there.

I think that the key answer to the problems in the North-East is inextricably linked with the fortunes of the 402 economy as a whole and that the revival of the economy generally will bring a solution to the problems of the North-East.

The hon. Gentleman asked about a Northern development agency. As I think he knows, my right hon. Friend the previous Secretary of State for Industry decided that that would not be the right solution, not least because of the effect that it would have on other regions which would immediately claim similar treatment for themselves.

The hon. Gentleman is asking for an assurance that towards the end of 1983 and in 1984 when we review the future of Peterlee and Aycliffe we shall do so with an open mind. I am happy to give him a guarantee that the review will be a genuine one and that we have not, and would not, rule out the possibility of a further extension.

I end on a final note of reassurance. We shall do all that we can, within the financial and other constraints, and bearing in mind the claims of places such as Skelmersdale, Telford and Corby to support the corporation in its industrial promotion role and to ensure that it gets the money it needs to provide the infrastructure for new development. In the North-East, as elsewhere, we shall also look to the private sector to play its full part in funding factory building, though we realise that that is not easy and that there is a big educational job to do.

We have had a useful debate. I hope to visit Peterlee in the new year and I hope that the hon. Gentleman will find it possible to accompany me on part of that visit. When I am there I shall certainly bear in mind the points that he has made.