HC Deb 16 February 1982 vol 18 cc259-66

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

12 midnight

Dr. Shirley Summerskill (Halifax)

I was provoked to raise the industrial situation in Halifax in an Adjournment debate by two particularly disastrous developments in my constituency that took place in the same week recently. First, the unemployment figure broke through the 6, 000 barrier, with a total of 6, 046 jobless in the town at the last count. The second development was that Carpets International Ltd. a Halifax firm with an international reputation, which has twice been awarded the Queen's Award for Exports, announced that over 500 redundancies were to take place. These tragic events in the same week symbolised the industrial decline in my constituency, a decline which in one way or another affects every factory and every family in Halifax.

With regard to unemployment, ever since the Industrial Revolution Halifax has been traditionally to some extent protected from severe unemployment by the wide range of its manufacturing industries, although the main ones have been textiles, carpets and engineering. Since May 1979 not only has the actual figure of those unemployed soared to over 6, 000 but the rate of unemployment has risen steeply over a relatively short time. Since this Government took office, it has gone up by over 180 per cent., making it harder for the town's industry to adapt to the change. I hope that the Minister will consider the important factor of the rate of change as well as the total number of unemployed.

I have not been able to include in the total the hidden unemployment among women who do not register. This could run into thousands because a large proportion of the women in my constituency work outside the home. Halifax is rapidly becoming divided into two nations—the employed and those without a job. As one goes round, one meets groups of people who are divided into those two categories. This is not only socially divisive, but it is an economic disaster for the town and its people.

Although this debate is about Halifax there is a similar problem in Calderdale as a whole. The Halifax jobless cannot go to the surrounding area for work. In the past three years more than 7, 500 workers have lost their jobs in Calderdale, according to figures just produced by West Yorkshire county council. The figures also showed that only one third of the jobs lost in Calderdale were replaced by new vacancies in the district.

The factory closures and redundancies are symbolished by the recent announcement by Carpets International Ltd. of over 500 redundancies. That is the latest in a series of blows that Halifax has had to bear. It represents a psychological and economic disaster for the town. The Prime Minister visited the firm before the previous general election, when its proud boast was "We carpet the world". It was founded in the 1800s by Mr. John Crossley and became one of the largest carpet manufacturers in the world. Not only the carpet industry but the textile industry in Halifax has been hit by the massive redundancies that have taken place, especially in West Yorkshire. I am glad to see my hon. Friends from West Yorkshire behind me—the hon. Member for Huddersfield, East (Mr. Sheerman) and the hon. Member for Batley and Morley (Mr. Woolmer).

Not only have the mills been closing one after another, but no other industry in Britain has suffered as many job losses. Nearly every manufacturing firm in Halifax has been affected in some way or another by Government policies. If they have not closed, they have declared redundancies or people are on short time or, in some way, they are finding business difficult. Mackintosh's Toffees, another internationally famous firm and also a winner of the Queen's Award for Exports is the largest private manufacturing firm in Halifax, but it is complaining about being hit by value added tax, by inflation that is still over 2 per cent. higher than when the Labour Government left office, and by interest rates.

The engineering and machine tool firms are another part of the backbone of Halifax's industry. In May 1980, John Stirk and Sons closed. Last year, Staveley Machine Tools closed its Asquith division and Modern Foundries has announced its closure. All those closures, together with thousands of redundancies in other firms that I have not named are especially intolerable because there is no alternative work in the town or elsewhere for the jobless. Also, if Britain comes out of the recession, where are the factories to provide the jobs? As training is totally inadequate, where will the skilled work force come from? Britain will depend upon towns such as Halifax for its future prosperity. Some of its industry must be preserved before it is too late.

Apart from reversing their failed monetarist policies, what can the Government do? My immediate request to the Minister is to respond positively and urgently to any requests that he receives for financial help under the Industry Act 1975 from firms large and small in Halifax and Calderdale. The same applies to requests for help from EEC funds. The preservation of existing jobs and the creation of new ones is of paramount importance if Halifax's industry is to survive.

Secondly, I urge the Minister and his right hon. Friend the Secretary of State for Industry to retain Calderdale's assisted area status, which it is due to lose following a Government decision taken as long ago as 1979. The Minister has agreed to meet a delegation from the Calderdale Economic Regeneration Advisory Committee on 25 February and we shall press the case strongly upon him. That committee represents a cross-section of the working life of Halifax—the trade unions, the chamber of commerce, the chamber of trade and councillors. I shall accompany the delegation.

Under the Government's policy of providing help only in the relatively few places where it is most needed, the intermediate assisted areas of today will become the totally depressed areas of tomorrow. Help from central Government and the EEC is essential if individual firms are to survive or improve and if the environment in Halifax and the surrounding area is to be improved and made to attract new industry. What is the sense in depriving Halifax of funds when the result is to be the further decline of its industry, so that assistance is provided by the Government only when it is too late?

Thirdly, I ask the Minister to press the merits of Calderdale as a site for the computer and electronics training centre for young people. His colleague the Minister for Industry and Information Technology has put Calderdale on his list for consideration. Any new industries of any kind would be welcome in Halifax. They would help to resuscitate the town and the new firms would profit from the enterprise and traditional skills to be found in the town.

Mr. Barry Sheerman (Huddersfield, East)

Does my hon. Friend accept that while we would welcome new industry, in the short term the necessity is for the preservation and resuscitation of old industry, much of it good and highly sophisticated, such as the three firms under threat in Huddersfield, Halifax and Batley and Morley? I refer to some of the firms that the Minister should have visited only two weeks ago. He pulled out of that visit at short notice. Does my hon. Friend accept that a new visit by the Department of Trade to look at those companies at the moment under threat, with over 2, 000 jobs at risk, would be beneficial?

Dr. Summerskill

Yes, we need help for both the existing firms and for new firms. We want both to preserve jobs and create them—we must combine the two.

Within the limits of the massive cuts in the rate support grant imposed by the Government, the local authority in Halifax is making every effort to improve the environment, the amenities and the services and to attract new industry to the town.

Fourthly, special help is needed to enable the textile and carpet industries in Halifax to resist unfair competition from developed industrial countries. I emphasise developed countries because I do not share the view that we should try to resist trade from the poorer developing countries. I hope that the Minister at the Department of Trade will strengthen the milti-fibre arrangement. Will the Department of Industry consider giving some direct financial help to the textile industry?

A scheme has been drawn up and implemented by the Belgian Government to give specific support to the textile industry in that country. Will this Government follow suit before it is too late to save what remains of the textile industry? What consideration have the Government given to similar help to the machine tool industry, at least to sustain it until the recession is over?

I hope that the hon. Gentleman will bear in mind the special difficulties that face Halifax, in particular, and West Yorkshire in general. That area was the cradle of the Industrial Revolution, which has sustained the prosperity of this country, and it is wrong that these traditional industries should be allowed to die. I hope that the hon. Gentleman can answer the specific points tat I made at the end of my speech.

12.14 am
The Under-Secretary of State for Industry (Mr. John MacGregor)

As is the custom, I congratulate the hon. Member for Halifax (Dr. Summerskill) on securing the Adjournment debate and raising two topical matters at the outset of her speech, when she spoke about Carpets International Ltd. and the increase in unemployment in Halifax and Calderdale generally.

The hon. Lady mentioned a wide range of issues, and I hope that I shall succeed in covering a number of them tonight. However, as she said, she is leading a deputation from Calderdale to see me shortly. That places me in some difficulty, because clearly I want to hear representations from the deputation. Therefore, if I do not cover all the matters that she has raised this evening, I shall certainly do so on that occasion.

Less than a year ago, the hon. Lady obtained an Adjournment debate to seek the continuance of assisted area status for Calderdale—a matter that she raised again tonight. She will recall that on that occasion she and I had to stay up all night, and eventually we reached the debate in the middle of the afternoon. On this occasion the House has been more generous to us. On that occasion we went over the general principles relating to assisted area status, so I am sure that she does not want me to go over them again, as they are on the record.

I have agreed to receive a deputation from the metropolitan borough of Calderdale. As she knows, the meeting was first arranged for 21 December, but unfortunately the weather at that time made it impossible, so I agreed to a new date in January. By then, travelling was again uncertain—this time due to the regrettable withdrawal of labour by ASLEF. So we fixed a date later this month on Thursday 25 February.

I know, too, that my hon. Friend the Member for Brighouse and Spenborough (Mr. Waller), and expecially my hon. Friend the Member for Sowerby (Mr. Thompson), who is here this evening, although there are difficulties for him as a Government Whip, wish to be associated with the deputation.

First, I shall make some general points. As the hon. Lady said, the Government are continuing with their regional industrial policy of concentrating on the areas of greatest need. I do not wish to minimise the unemployment problems in her constituency, but there are areas where regrettably, unemployment is persistently high and where, many more thousands of people are without jobs than in the areas that she mentioned. In concentrating on the areas of greatest need and in discussing unemployment we are acutely aware of the difficulties which the world recession has brouht to the whole country. However, when it comes to regional industrial policy, I am sure that we are right to concentrate on the areas of greatest need.

The hon. Lady said that we were concentrating on relatively few assisted areas. I must tell her that, even under the changes announced in July 1979, which will come into operation finally in August of this year, as the transitional period comes to an end 26 per cent. of the country will still be covered by assisted area status. Therefore, it can hardly be said that we are concentrating on relatively few areas. She urged the Government to consider retaining the existing area status for Calderdale and Halifax. We shall discuss this matter in considerable detail with the deputation, and I do not want to pre-empt our discussion on that occasion.

However, I shall mention one or two of the factors which will be relevant in our consideration of the matter. The first is the point that I have already mentioned about concentrating on the areas of greatest need. There has been a regrettable rise in unemployment, which the hon. Lady mentioned in her opening remarks. Let us look at the levels as a whole. In Halifax, in January this year, unemployment was 11.9 per cent. That compares with the rate for West Yorkshire as a whole of 12.7 per cent., and in Great Britain a rate of 12.5 per cent. I have the unemployment figures for 13 of the travel-to-work areas in Yorkshire, Lancashire and Humberside, all of which are due to lose their assisted area status in August next. Of those 13, 11 have higher unemployment than Halifax. Clearly we have to take that fact into account in considering the hon. Lady's request.

I have concentrated so far on the level of unemployment, but the hon. Lady will know from our previous debates that other factors apart from unemployment must be taken into account in considering individual claims for assisted area status. Those factors are listed in the Industry Act 1972. We have to bear in mind whether the decline in unemployment is persistent and likely to last for a long time, as well as other factors such as geographical location and the opportunity for other jobs. All those factors have to be taken into consideration. However, I have no doubt that we shall discuss this matter at length when she brings the deputation to see me.

Mr. K. J. Woolmer (Batley ad Morley)

Is the Minister aware that in West Yorkshire, where textile towns have been badly hit, his words will seem extremely complacent? In Batley unemployment among males and youths is as high as 28 per cent. Belgium and France are introducing schemes to help the textile industry. Why does not the Department of Industry consider the problems of the textile areas as seriously and vigorously as our Continental partners appear to do?

Mr. MacGregor

There is certainly no sense of complacency in what I am saying. I was referring to the problems of Halifax—the subject of the Adjournment debate—and not to the other areas in West Yorkshire. Our policy concentrates aid on the areas of greatest need, and we must take into account the fact that unemployment in Halifax is less that the national average.

It is relevant to point out that some £3, 345, 000 of aid has been either offered to or accepted by firms in Halifax since May 1979, and that has assisted a considerable number of projects in the town.

The hon. Member for Batley and Morley (Mr. Woolmer) referred to the problems of the textile industry. Like others, that industry is being forced to adapt to present conditions in order to regain competitiveness. Where the Government can, they are helping considerably. In that context, the multi-fibre arrangement negotiations are crucial. The hon. Member for halifax also referred to unfair competition from developed countries. She put the emphasis on unfair competition. She will know that when there is evidence of anti-dumping we are prepared to act. I shall refer later to the problem of State aid in other European member countries.

The protocol extending the multi-fibre arrangement—adopted in Geneva on 22 December after long and often acrimonious negotiations—provides for all the United Kingdom's major objectives. Because the multi-fibre arrangement is solely a framework agreement, the practical details will have to be settled in the bilateral negotiations this year with each supplier country. The Community has stated that if it is unable to negotiate satisfactory bilateral agreements by the end of this year it will withdraw from the multi-fibre arrangement. The United Kingdom insists that this link must be maintained and has made it clear that it will be unable to agree to Community participation in the renewed multi-fibre arrangement unless satisfactory global ceilings are agreed to cover imports from all low-cost suppliers.

In those bilaterial discussions the United Kingdom Government will continue to seek a regime that is tougher and more effective than the present arrangement. That is a clear indication of the type of assistance that the Government are giving to the textile industry.

The Minister of State for Industry and Information Technology will be meeting the Confederation of British Wool Textiles next month when the Werner report on the industry's competitiveness will be discussed.

The hon. Lady also raised the question of other European countries' State aids for the textile and clothing industries. We are aware of those schemes and have urged the European Commission to apply vigorously the relevant treaty provisions. At the same time, the House should know that the textile and clothing industry receives a considerable amount of aid from the Government. In 1980-81 that aid totalled over £80 million and in 1981–82 a further £41 million has been offered or paid so far. Those are not inconsiderable sums.

The Government fully appreciate the problems that face the carpet industry, but, as my right hon. Friend the Prime Minister made clear in a recent exchange in the House with the hon. Lady, rationalisation schemes designed to improve competitiveness are matters for the industry. understand that the levelling of demand and, indeed, the rapid expansion of capacity in the early 1970s, brought about a substantial excess of manufacturing capacity., which by 1977 was already causing the industry some problems. It is fair to say that no agreement on any rationalisation scheme has yet been reached within the industry. However, if it were, the Government would be prepared to consider whether any of the forms of financial aid already available are appropriate to assist such rationalisation.

The hon. Member for Halifax referred particu1arly to Carpets International Ltd. She will know that the sad closure decision that has been announced is a commercial decision by the company. The company as a whole made trading losses of £6.4 million in 1980 and £2.24 million in the first half of 1981. She asked me whether the Department was prepared to consider quickly any applications made for financial aid under existing schemes, such as selective financial assistance under the Industry Act. Yesterday representatives from the management and trade unions at Carpets International held discussions with the Department of Industry's regional office. Officials have fully explained the aid available under section 7. It would be for the company to approach the Department with any proposals for a project for assistance.

The hon. Member referred to the need to improve the environment in the Halifax area. The derelict land clearance status that her constituency will still have after August 1982 is of great importance. As she will know, changes have been announced in the way in which derelict land grants will be paid. My right hon. Friend the Secretary of State for the Environment will allocate derelict land grants in the corning year directly, and on the basis of need. He will consider sympathetically applications for obsolete buildings. I am well aware that there are problems about obsolete buildings in the hon. Lady's constituency.

The hon. Member for Halifax will know that the Department of the Environment sent a letter on 22 December to all local authorities. I hope that the metropolitan borough of Calderdale has studied the letter and will respond positively to it. I was asked what the Government would do to attract new industry to the area. The role that small firms can play is important. Indeed, I know that that is important in the hon. Lady's constituency. The written representation that I received from Calderdale prior to the deputation stressed that 93 per cent. of the 1, 500 local firms employ fewer than 100 people. That is an important element in the regeneration of our economic base, as some of our more traditional industries, such as textiles and engineering, have declined.

Mr. Sheerman

What evidence is there in Halifax and in West Yorkshire that small firms make up for the tremendous losses experienced since the Conservative Party came to office in May 1979? How many new jobs have been created and how many have been lost? May we have the figures?

Mr. MacGregor

Jobs have been lost because for many years Britain's competitiveness has declined and we have had to deal with the fundamental reasons for that industrial and economic decline during a world recession. Not only in West Yorkshire but throughout the country many painful adjustments have had to be made. I should not expect the expansion of small firms on which we have embarked to have an immediate and dramatic impact. However, in constituencies such as Halifax, where there has been a heavy dependence on traditional industries, a strong base of small firms will increasingly help to provide that restructuring.

Mr. Sheerman

First-class firms are going out of business.

Mr. MacGregor

The hon. Member for Halifax initiated the debate, and I am trying to concentrate on the problems of Halifax.

The hon. Lady will know that the Government have taken many steps to try to assist in the expansion of small businesses. That will prove increasingly relevant as the recession clears. Some of the points raised by the hon. Lady relate specifically to the deputation that is to see me. One point relates to the small workshop allowance. The 100 per cent. industrial buildings allowance which was introduced in the Finance Act 1980 is clearly leading to a considerable increase in the number of small premises available.

The Government are aware of the representations that have been made about the small workshops allowance and the possible difficulties that relate to some of the definitions applicable to it. That is being considered at the moment. There was an Adjournment debate on the subject not long ago to which my hon. Friend the Financial Secretary to the Treasury replied. That question is being considered at the moment in relation not only to requests being made to us but to the Green Paper on the future of corporation tax.

Time prevents me from going into some of the other points raised by the hon. Lady, but I assure her that I shall do that when she comes with the deputation to see me. I look forward to having discussions with it shortly.

Question put and agreed to.

Adjourned accordingly at half-past Twelve o'clock.