§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
10.14 pm§ Mr. Jack Straw (Blackburn)I am glad that I have been joined for this debate by my hon. and learned Friend the Member for Accrington (Mr. Davidson) and by the hon. Member for Rossendale (Mr. Trippier). My hon. Friend the Member for Burnley (Mr. Jones) told me that he would have liked to be present, but he is unavoidably absent because he has had to go to Burnley tonight to keep an appointment tomorrow morning. The hon. Member for Nelson and Colne (Mr. Lee) asked me to make it clear that he, too, would have wished to be present, but he is on an important trip to America.
All of us, together with the people in North-East Lancashire, are deeply grateful to Mr. Speaker for having selected this subject for debate. To us there is no more important issue than the future prosperity of North-East Lancashire and the part that the Government can and should play in reversing the terrifying decline which the area has suffered over the past three years, by, above all, acceding to the request of the North-East Lancashire Development Association for development area status, a request which, I should like to emphasise, is backed by all parties and every responsible group in the area. I am glad that the hon. and learned Member for Darwen (Sir C. Fletcher-Cooke) acknowledges that.
A comprehensive submission of the case for development area status was made by NELDA in January of this year. The Minister has that and it is not necessary for me to repeat it in every detail. No doubt the Minister and his Secretary of State are also fully aware of the careful and wide-ranging series of articles about North-East Lancashire's recent industrial decline which have appeared in the Lancashire Evening Telegraph and in its sister newspaper, the Burnley Evening Star since those two papers launched their "Save East Lancashire" campaign in mid-February. Those articles give more fully and in many ways more eloquently than I can the roll-call of dead and dying firms and the tragic personal and human consequences which have followed the decline. We commend those newspapers for the initiative that they have taken.
The House will wish me to outline the case for North-East Lancashire and to spell out why the area needs special help. To do that, I must give a little history. The prosperity of North-East Lancashire was founded on the twin staples of the Industrial Revolution, cotton and coal. In the 'twenties and 'thirties three-quarters of those employed in my constituency and in most of the other constituencies in North-East Lancashire worked in textiles. Such heavy reliance on a single product, cotton, was not healthy. When the country as a whole first caught a cold and then bronchitis in the slump of 1929, North-East Lancashire nearly died. Throughout the 'thirties, as the study, "Readjustment in Lancashire", by the University of Manchester made clear, the area was one of the unemployment black spots.
The area was saved, partly by the war and the change in economic policy that that caused, but also by the 514 recognition in the late 'thirties, again by all parties, that the area would help itself but that it needed Government and local government help. One of the biggest employers in my area, Mullard, was sited in Blackburn because of incentives provided by the Government and the borough council, supported by both sides of the council. There are many similar examples across North-East Lancashire.
It is remarkable that, despite the area's history and the very high levels of unemployment there throughout the 1930s, in the period from 1945 to 1976 there was truly full employment. From 1976 to 1979 it was not the happiest of stories, but unemployment was no more than about 6 per cent. in 1979. For that long period there was full employment. One reason was that in the late 1960s the Government had recognised that the area had special problems. There was disguised unemployment, reflected in high levels of migration from the area, and there were communication problems. As a result of the recognition of those special problems, the area was given intermediate area status by the Labour Government. That was confirmed by the Conservative Government in the 1970s and maintained throughout the period of the Labour Government from 1974 until 1979.
In July 1979 the Secretary of State for Industry announced that the whole area was to lose its development area status in August 1982. That decision was justified partly on the ground that the aid should be concentrated in those areas where it was needed most, but also in terms of the Government's overall economic strategy, which was expected to lead to greater opportunity and more jobs. It is not my task or intention to make complaints about the Government's economic policies. There are other occasions on which we can do that. I say only that, whatever the intention behind the strategy in July 1979, it is apparent that it has not worked out as intended. That is reflected by what has happened in North-East Lancashire.
The Minister will, of course, be concerned about whether the position in North-East Lancashire is worse than it is lsewhere in the country as a whole. He and his predecessors have made it clear that what they are really concerned about is whether there has been a relative change in the position of one travel-to-work area compared with others.
The submission from NELDA and the figures that I shall give make it absolutely clear that there has been a dramatic change in the relative position of North-East Lancashire. The figures in the NELDA submission are for the two-year period from September 1979 to September 1981. I can give the Minister figures for three years, from March 1979 until March 1982. Because they cover the same months in each year, we avoid the problems of seasonal fluctuations.
In the country as a whole, unemployment has risen in that period by 113 per cent. In the North-West it has risen by 111 per cent., and in Blackpool, which is continuing with its assisted area status, it has risen by only 89 per cent. In Lancaster, which also continues with assisted area status, it has risen by 76 per cent. In North-East Lancashire unemployment has increased over the past three years by no less than 176 per cent.—more than twice as much as the increase in Lancaster and Blackpool and 60 percentage points up on the increase for the North-West and the United Kingdom as a whole.
There is no question but that there has been a dramatic, appalling change in the relative position of North-East 515 Lancashire. That relative change justifies NELDA's case for development area status. I hope that the Minister will answer it tonight.
Other figures, which I shall send to the Minister, show that although textiles account for a third-6,000 out of 19,000—of the declared redundancies, the pattern of redundancies has been spread right across the diversified industrial base of the area. There have been another 6,000 in mechanical and electrical engineering, almost 1,000 in clothing and footwear, and others spread across the industrial structure.
I hope that the Minister will say that North-East Lancashire will receive development area status. If he does not, he should confirm that the area will be the subject of a proper, formal review. I hope that he will give at least that commitment, which he and his predecessors have not given in the past.
North-East Lancashire has been renowned for high productivity, good industrial relations and low wages. It has a long history of helping itself. It has done so in the past and will do so in the future. It also needs the help of the Government, and I hope that the Minister will tell us that we shall get that help, which will provide hope for an area which has lost a great deal of hope over the past three years.
§ Mr. Arthur Davidson (Accrington)I congratulate my hon. Friend the Member for Blackburn (Mr. Straw) on the way he has set out the indisputable case for the early granting of development area status to North-East Lancashire. I would also like to associate myself with his praise for the way the Lancashire Evening Telegraph has sustained the momentum of its "Save East Lancashire" campaign.
I want to add one or two alarming figures to those already given by my hon. Friend the Member for Blackburn. The Hyndburn area is rapidly becoming a disaster area. The unemployment rate in the Accrington travel-to-work area is 15.3 per cent.; in the Hyndburn area it is 14.9 per cent. With the horrifying glut of recently-announced redundancies, the projected figures for May and June will be about 19 per cent. in the Accrington area and 16½ per cent. in the Hyndburn area. The average unemployment rate in the present intermediate area is about 13 per cent., and the average unemployment rates in the present development areas are about 16 per cent.
On either basis, the case for granting development area status to Hyndburn—although I am associating myself with the general campaign for granting it to North-East Lancashire—is overwhelming. Unless the Minister accedes to the request, I fear that there will be despair, despondency and gloom in an area which has always been cheerful and has managed to overcome its adversity.
§ Mr. D. A. Trippier (Rossendale)I am grateful for the opportunity to make a brief contribution in this debate. I compliment the hon. Member for Blackburn (Mr. Straw) on raising this matter. It is much appreciated that he has sought to be non-partisan in his speech, which is welcome to those of us who sit on the Government benches, including my hon. and learned Friends the Members for Darwen (Sir C. Fletcher-Cooke), and for Clitheroe (Mr.
516 Waddington) and the hon. Member for Nelson and Colne (Mr. Lee) who is unavoidably absent due to his important visit to the United States.
I value this opportunity to speak and to thank the Minister for recently receiving a delegation from my constituency, Rossendale, which in the main comprised representatives of the local authority. I considered that he was extremely sympathetic to the plight which we face. I wish to thank him for visiting Rossendale last year. I hope that he found that a fruitful and useful visit. He was well received.
It is well to remember two things, having listened carefully to the contribution of the hon. Member for Blackburn. When one is putting a case for North-East Lancashire, as NELDA has done effectively, it is difficult to compare the plight of Rossendale, Blackburn and Accrington with the plight of Clitheroe, where the unemployment figures are vastly different. There is a danger of crying wolf in applying to the Government for assisted area status, preferably development area status, for certain areas in the sub-region.
Our over-dependence in Rossendale on textiles and footwear is one of the greatest dangers we face in that 45 per cent. of the work force are employed in those two industries which are both labour-intensive and are regarded by most people as declining. The truth is that Rossendale has not diversified like other areas within the sub-region of North-East Lancashire, which makes us much more vulnerable. Because of our over-dependence on textiles and footwear, we have suffered greatly with the recent international decline in trading within those two industries.
Most of my constituents accept that there must be a transitional period in which we can diversify into other industries, but as the hon. Member for Blackburn eloquently said, we need time to diversify. We are short of that time. We also need fair competition. Although I realise that my hon. Friend is not responsible for it, development area status for Rossendale is now vital. I am grateful to my hon. Friend the Minister for the support and help that he has given in my constituency for starting up and encouraging the Rossendale Trust. Anything that he can do in future to encourage the growth of small businesses will be very much appreciated.
I hope that the Minister will view seriously the representations made to him by NELDA, that he will consider sympathetically our recommendations in Rossendale, and that he will take into account all that has been said in this debate.
§ The Under-Secretary of State for Industry (Mr. John MacGregor)The hon. Member for Blackburn (Mr. Straw) was in full flow earlier this evening and I congratulate him on the fluent presentation of his case in this debate. I hope that the hon. and learned Member for Accrington (Mr. Davidson) will forgive me if I do not refer to his points, but, as he knows, just before the House rose for the Easter Recess we had an Adjournment debate in which I discussed briefly assisted area status.
I am well aware of the position in the area to which this debate refers. We have not been short of representations about it, although we have also received many representations from other parts of Britain, all of which have individual reasons for believing that they should receive special treatment. We have made it plain on many 517 occasions that, as a Government, we are always prepared to consider representations from any area. I have met the hon. Member for Blackburn and I recently received a deputation from Rossendale.
On that basis, my right hon. Friend the Secretary of State recently agreed to receive a deputation from the North-East Lancashire Development Association, which presented the case that the hon. Member for Blackburn presented this evening. My right hon. Friend is giving the matter careful consideration and has passed on the representations about inner urban area status under the Inner Urban Areas Act 1978 to my right hon. Friend the Secretary of State for the Environment, which he pledged to do when he met that deputation, and he will give his decision in due course.
I fully understand the difficulties of the area and I sympathise with all those affected, but the hon. Gentleman will forgive me if I do not give a substantive reply to the points made by the recent deputation, because that is a matter for my right hon. Friend and I do not wish to anticipate the outcome of his considerations. However, I can assure him that I shall bring to his attention the points made by hon. Members during this debate.
Nevertheless, it would be helpful if I were to remind the House of the basis of our regional industrial policy and the general principles that apply.
§ Mr. StrawI should be grateful if the Minister would tell us when the Secretary of State will make his decision.
§ Mr. MacGregorThe hon. Gentleman must forgive me if I do not answer that tonight. We have received many representations, and we must consider them all.
I do not intend to go into the wider economic background, but successive Governments have followed a regional policy designed to correct imbalances in the distribution of employment and in regional disparities that have developed over some years as traditional industries have declined. I stress that that policy has been, and continues to be, aimed at encouraging new industrial investment in the various areas with a view to correcting the imbalances in their industrial structure.
When we came to office we looked for a way of making regional policy more effective. We are doing so essentially by making it more selective. When the changes take full effect this August, the coverage of assisted areas will be reduced from 44 per cent. to about 26 per cent. of the working population, thus concentrating on the areas of greatest need.
By consequently reducing regional aid, we are also reducing the burden on public expenditure, although there are many other ways in which aid is given to industry generally. This will help indirectly to reduce the burden on industry by dealing with the public sector borrowing requirement. I do not need to go into that in detail, because we have often debated it in the House.
I remind the House that rather than remove assisted area status from certain areas immediately we allowed three years' grace. The House will want to know that £9.3 million of regional development grant and selective financial assistance has been paid or offered to industry in North-East Lancashire by the Government and a substantial portion relates to projects completed in the transitional period.
518 We are required by the Act to have regard to certain criteria in designated areas. These are considered in relation to the general approach of making regional development assistance more selective and hence more effective. Past evidence of regional assistance tends to suggest that the more selective assistance is the more effective.
In that overall context we must first consider the rate of unemployment. It is important that the absolute level of long-term unemployment for any one travel-to-work area is considered relative to all other travel-to-work areas. The hon. Gentleman has made play of the relative increases in North-East Lancashire. They are deeply regrettable, but it must be born in mind that proportionate increases that relate to a previous date and not to other areas are not the relevant criteria as much depends on the starting date. The relevant criterion is the level of unemployment in the country at any one time.
The hon. Gentleman knows that successive Governments have designated assisted areas by reference to travel-to-work areas because they represent reasonably self-contained labour markets and are the smallest areas for which the Department of Employment is able to calculate meaningful unemployment rates. A travel-to-work area is based on factual information that is collected in the census of population and updated by the Department of Employment in consultation with local interests.
I shall explain how the system works, because I find that there is a great deal of misunderstanding about travel-to-work areas. Officials in the Department of Employment take one of the employment office areas and examine where people live and where they work. If about 70 per cent. of those who live in the area also work in it and 70 per cent. of those who work in the area also live there, the employment office area is regarded as a self-contained travel-to-work area. However, if there is evidence of significant commuting across employment office area boundaries, the areas are linked together as appropriate to satisfy the same criteria.
Successive Governments have come to the conclusion that that is the most effective way of assessing levels of unemployment. That is why my right hon. Friend emphasised when he met the deputation from the North-East Lancashire Development Association that the Government would consider the case in the light of individual travel-to-work areas rather than the area as a whole. My hon. Friend the Member for Rossendale (Mr. Trippier) has given one indication of why that is necessary. That must be said when representations are being made to declare all the travel-to-work areas in the area assisted areas.
We must consider also evidence of long-term structural decline. It is recognised that traditionally north-east Lancashire has depended largely on the textile and footwear industries. We all know that these industries are having to adjust to changes in the world economy. It does not necessarily follow that because an area is facing a degree of structural decline—I emphasise "degree"—in certain industries it should necessarily be an assisted area. That facet must be considered along with the other criteria.
In north-east Lancashire there are a number of travel-to-work areas in which over the past 10 years there has been a considerable diversification of industry. However, I recognise that in Rossendale there is a heavy preponderance of footwear and textile undertakings.
519 The third consideration is the geographical position, especially in relation to markets and communications. I visited Rossendale and Nelson and Colne last year, and I am aware of those difficulties. However, there are plans to improve communications in the Calder Valley. We must consider also the prospects of achieving other jobs in the travel-to-work areas and the changes that can take place. The designation of assisted areas is one of the most difficult that faces my Department. Events that have taken place while I have been in the Department have shown that it would have been wrong to take certain decisions. In some cases natural economic forces mean that new jobs can be created. That aspect must be also considered.
I draw attention to some of the good news in the hon. Gentleman's constituency. Philips (Mullard) will almost double its £7 million investment in its video disc pressing plant to meet greater than expected demand for its programmes and discs. The current work force is likely to double to about 200. MEC Pressings (Blackburn) has been bought by the Risden Corporation, the leading American manufacturer of cosmetic containers, which plans to double the investment already envisaged for the next five years. American executives are looking for further sites in Blackburn to set up a finishing plant which will provide up to 100 additional jobs. AFM Leisure has developed a new micro-electronic gaming machine. That company has won about £2 million worth of new orders and in the short term will provide an additional 50 or 60 jobs. Netlon plans to open a new factory which will create 100 jobs in the next few years. I could go on. There is movement within the area.
I make one other relevant point. In North-East Lancashire total unemployment last month was 27,748. It is interesting to note that in the past year the employment service placed 19,500 people in employment in North-East Lancashire. Many more will have found jobs by other means. I state that simply to indicate that there is a great deal more movement in the economy than levels of unemployment would sometimes suggest.
I state these facts to give the hon. Gentleman some indication of the considerations in our minds. It is important to mention the domino effect. One cannot change the status of one travel-to-work area in isolation. There will be immediate legitimate representations and epectations from many other parts of the country. To put this into perspective in relation to North-East Lancashire—I say this without any commitment but to give an indication of some other statistics that must be considered as well as those given by the hon. Gentleman—only the Rossendale travel-to-work area, at 15.5 per cent., had a 1981 average unemployment rate that 520 was above the average of all remaining intermediate areas for the same period. I refer to the average for the intermediate areas after August 1982. The relative position has not changed since then. Rossendale now has an unemployment level of 16.1 per cent., whereas the intermediate area average is 14.6 per cent. No other travel-to-work areas in North-East Lancashire have unemployment levels above 14.6 per cent., and a number are considerably well below. Those factors have to be taken into account.
As I said, earlier this month I saw a deputation from Rossendale, and I am fully conscious of the serious problems facing the area. I have just referred to its level of unemployment.
I shall put the domino effect another way—the hon. Gentleman is fair on these matters and that is why I seek to do him justice by giving a full reply. If one considers the areas by level of unemployment rate—I refer to assisted areas boundaries as they will be after August 1982—59 areas will become non-assisted or are already non-assisted. Of those, 23 will become non-assisted. They have a higher level of unemployment than the hon. Gentleman's travel-to-work area. After August 1982 there will be 127 travel-to-work areas which will continue to have assisted area status of one sort or another.
That will show the hon. Gentleman the number of travel-to-work areas all over the country that will immediately make representations on the domino effect. I make that point to show the hon. Gentleman some of the factors that must be taken into account.
It is important to consider stability in regional policy. I discussed this with the hon. Gentleman when he came to see me, so I can be brief. Stability is essential if industry is to plan ahead effectively. For investment incentives to have a real effect on industry's decisions on where to locate, they must be stable and predictable. That is why we do not work on a hand-to-mouth basis, constantly chopping and changing.
Those are the major criteria that my right hon. Friend the Secretary of State will be applying in consideration of the case. I do not want to predict the outcome at this stage.
There are many other measures, including enterprise allowances, that we have recently specifically introduced, concentrating on one of the selected areas in North-East Lancashire. Many other measures of national effect, and many other measures of— —
§ The Question having been proposed after Ten o'clock and the debate having continued for hay' an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at sixteen minutes to Eleven o'clock.