§ Mr. Donald Stewart (Western Isles)
I am pleased and fortunate to have the opportunity of presenting this submission on behalf of my constituents about the extremely serious level of unemployment in my constituency. It has been the sad record of my constituency over a long period—ever since, in fact, records have been kept—that, more often than not, we have been at the top of the United Kingdom unemployment league table. Last year, unemployment in the Western Isles rose fairly steadily from around 20 per cent. in mid-1981 to a high of around 23 per cent. in December of that year. This year started off with an even higher level of 24 per cent. in January. The figure dropped temporarily to 21 per cent. in April, but the May figure showed a rise again to 22Ċ3 per cent. All these figures are non-seasonally adjusted.
In comparison, the figure for the whole of Scotland fell from 15Ċ3 per cent. in January 1982 to 14Ċ5 per cent. in May. In Great Britain as a whole, the trend was much the same, with a fall from 12Ċ5 per cent. in January to 12Ċ3 per cent. in May. Obviously, the Western Isles is faring badly compared with Scotland and Great Britain as a whole. I am surprised and angry that the Secretary of State for Industry, in the light of these figures, has refused to accord special development area status to the Western Isles.
The unemployment figure for the Western Isles in July is 24Ċ6 per cent. Male unemployment is 30Ċ6 per cent. These figures are due largely to the closing down of the fabrication yard at Amish Point, Stornoway, and the start of a recession in the Harris tweed industry. That recession will have a further disastrous effect on next month's figures, which I forecast will be in the region of 30 per cent. There are a number of specific areas in which the Scottish Office could assist. I submit these to the Minister. I am grateful to the hon. Gentleman for being present to hear these points.
An integrated development programme is getting under way in the Western Isles. I hope that the Minister will ensure that submissions from the programme requiring the assent of the Scottish Office will be expedited and any delay eliminated so far as this is humanly possible. I would ask the hon. Gentleman to represent to his right hon. Friend the Secretary of State that he ensures, in EEC discussions on a common fisheries policy, that a 12-mile limit is reserved for the Western Isles and that the fisheries plan of the Western Isles islands council shall have the same consideration as that accorded to the Shetlands plan, which I support.
If the fisheries in the area were to be given over to the EEC or other countries, to the detriment of the island fleets, this could have a catastrophic effect on employment and on the island community. I have already mentioned the depressing and economically devastating effect of the closure of Lewis Offshore Limited's fabrication yard. We must all hope that this is part of a temporary slack period for these yards and that contracts will again become 1451 available in the coming months. Matters are not helped by BNOC's award of a contract to a Swedish yard. Will the Minister intervene with the Department of Energy to ensure that such contracts are confined to yards in this country as far as possible?
It is remarkable that the Government are showing sympathy for problems south of the border by enabling the replacement order for the "Atlantic Conveyor" to go to an English yard and by relaxing hire-purchase controls for the benefit of the car industry in the English Midlands, while in Scotland the gas pipline is aborted, Corpach has collapsed and the Invergordon smelter has been allowed to die in the cheapest energy area in the United Kingdom.
Long-term development in the islands cannot be divorced from the necessity for a reasonably economic trade system. Like me, the Under-Secretary of State represents a rural and island constituency, and I do not need to waste time in lecturing him. The Government have made a good start, but I urge the Under-Secretary to proceed to road equivalent tariff at the earliest feasible date.
Again, I draw the Government's attention to the need for a weighting allowance for Scots, especially for those resident in the islands and remote areas. Figures published in June by the Regional Rewards Surveys continue to show what has been true for many years, that, apart from London and the rich South-East, Scotland is the only area where the cost of living is well above the United Kingdom average. The cost of goods and services in the Western Isles is 16 per cent. above the national average. It is grossly unfair that on certain goods and services on which VAT is payable the already inflated prices require a higher level of VAT to be levied, thus adding tremendous extra cost. I do not expect the Under-Secretary to accept my argument today—although I shall be delighted if he does—but I wish to put down this marker.
There is another matter in which the Scottish Office can act expeditiously to improve employment in the Western Isles. I have already written to the Secretary of State in support of a plea by Mr. Alexander Matheson, convenor of the Western Isles islands council, about the Manpower Services Commission's community enterprise programme. The council is worried about the delay experienced in obtaining approval for applications submitted to the area board in Inverness in recent months. At present, 40 applications have been made, which would provide 179 places, and other projects are in the pipeline. The projects provide useful amenities and infrastructure, in addition to easing unemployment. I hope that the Secretary of State will take the necessary action to have the outstanding applications approved without further delay.
§ The Under-Secretary of State for Scotland (Mr. John MacKay)
The subject raised by the right hon. Member for Western Isles (Mr. Stewart) is very important, and I am glad to have the opportunity to express the Government's anxiety about unemployment in the Western Isles. There is a certain appropriateness, which I am sure is not lost on the right hon. Gentleman, that I should be answering this debate, because I am one of a long line of Conservative candidates who fought in an election in the Western Isles. I remember with much 1452 pleasure the three weeks that I spent there and the splendid people whom I met, even though it was in February 1974 and the weather was not at its best. I must say that I do not remember the election result with as much pleasure as the right hon. Gentleman. However, fighting the Western Isles is a good stepping-stone for Conservative candidates, and I am probably the third since the war to have campaigned in the Western Isles and subsequently ended up at this Dispatch Box. One even reached the Chair.
At present, unemployment in the Western Isles is over 24 per cent. of all employees. As is true of all Scottish unemployment figures, this month the figure reflects the influx of school leavers on to the register. The percentage probably is exaggerated because of the number of self-employed workers in the islands who do not figure as employees. However, I would not attempt to deny that unemployment was a major problem in the islands.
To some extent, like the rest of Scotland, the islands are victims of the current recession which has brought about an increase in unemployment everywhere in the United Kingdom and the Western world. But a remote rural community such as the Western Isles has unique problems which are perennial. As the right hon. Gentleman said, the unemployment figures in the Western Isles have been higher than elsewhere for many years. The reasons for this are various: the sheer distance from major economic centres; difficult agricultural conditions and a heavy dependence on traditional methods of agriculture; vulnerability to the unpredictable nature of the fishing industry; and the lack of major indigenous industries. They mean that the islanders are keen to welcome an incoming employer and are especially vulnerable if such an employer falls on hard times, as has happened recently to Lewis Offshore Limited, a subject to which I shall return.
The Government believe, therefore, that an important part of the future of the islands lies in fostering and improving their traditional industries of agriculture, fishing, crafts and tourism, which play a very important part not only in the economy of the Western Isles but in that of the whole Highlands. The local activities of the Highlands and Islands Development Board are aimed at this end, and the recently announced integrated development programme for the Western Isles is designed very much with the object of helping and bolstering those indigenous industries.
The right hon. Gentleman has argued this morning, as he has before, that the assisted area status for the Western Isles ought to be increased. I must tell him that the Government do not consider just unemployment rates when looking at the grade of assisted area status. Although the unemployment rate in the Western Isles is high, that is not the only factor to be taken into account. In any case, I am sure that the right hon. Gentleman recognises that the real advantage that we in the Highlands have is that as part of the HIDB area we get the best possible package of industrial help from the board.
The most important thing happening in the Western Isles is the integrated development programme. The regulation set out by the European Council isto improve working and living conditions in the Western Isles.Both the Government and the European Community are injecting substantial additional public money into the islands for that purpose to the tune of £20 million.
With a few exceptions, farming in the Western Isles is a part-time activity, and it is unlikely that the additional 1453 incentives to be provided in agriculture will create very many new full-time jobs in that industry. But it ought to generate an increased level of activity, and it should produce an increase in output which will benefit the entire economy of the islands.
It is expected that the bulk of the £20 million to be provided by the Government will be spent on fisheries and fisheries-related projects. In the programme which the European Commission has approved, it is estimated that grants for landing facilities may total £3 million, grants for fish processing £5 million, and grants for fish farming £1¼ million. If we get the response for which we are looking—the success of the programme depends entirely on the people of the islands taking up the offer that we make—a substantial number of additional jobs will be created.
Applications will be dealt with as expeditiously as possible. We want the project to be a success, perhaps as a forerunner to putting other cases to the European Community, and a success also for the Western Isles. On the road to that, the project team which will look after the IDP has been appointed already. The statutory instrument laid before the House on 21 July comes into effect on 1 September, as does the fisheries scheme. Anyone who has applied under existing less favourable schemes but who has not yet started work will have the opportunity to defer starting and to seek grants under the new scheme.
As the right hon. Gentleman knows, the discussions on the common fisheries policy have been taking place for some time. I am sure that he appreciates that the north of Scotland box, which goes as far as the Western Isles, will be to the advantage of fishermen in the Western Isles. The Minch and the important waters between the Western Isles and Scotland will all be well within British limits.
I said that I would return to the matter of Lewis Offshore Limited. I am very conscious of the impact on the community in Stornoway of the decision by Lewis Offshore Limited to lay off the bulk of its work force and to place the yard on a care and maintenance basis until new orders are secured. Orders for development of Morecambe Bay, of the Rough field and the Beatrice B field are currently coming forward, but at a time when work in the oil construction industry is scarce—not an uncommon phenomenon in a notoriously cyclical industry—competition is exceedingly fierce.
The Government, through the Offshore Supplies Office, will continue to do all they can to ensure that Lewis Offshore Limited is given the opportunity to compete for orders from the United Kingdom continental shelf, but I must make the general point that it is up to United Kingdom companies, including Lewis Offshore Limited, to come forward with competitive bids for projects. That point is particularly relevant in the context of the BNOC order, which the right hon. Gentleman mentioned, where the successful Swedish bid was considerably lower than that of the British yards. It is easy to say that BNOC should have been directed to place the order in the United Kingdom, and strenuous efforts were made to persuade the corporation in that direction, but ultimately the matter is for the commercial judgment of the oil company concerned. The long-term survival of the United Kingdom oil supply industry—including Lewis Offshore Limited—is entirely dependent on its ability to compete effectively in world markets.
The right hon. Gentleman and I, with our concern for many islands, are well aware of the impact of shipping 1454 costs on the general economy. I thank him for recognising that the Government have given a considerable amount of money in the last three years to support for shipping services in the islands. Support for those services has increased from £5.1 million in 1979–80 to £10.6 million in the present financial year. Indeed, on the west coast it has been possible for Caledonian MacBrayne this year, with the support provided by us, to hold fares and tariffs at the same level as in 1981.
In addition to increased support to the ferry services, we have extended support to bulk shippers, which is a very important aspect especially of the commercial traffic to the islands. My view, shared by the Government and by everyone in the islands, has always been that the cost of the commercial traffic is the key to the economy of the islands.
The right hon. Gentleman argued that a cost of living supplement should be paid to workers in the Western Isles. He said that he would be surprised if I conceded. I am sorry to tell him that I shall not surprise him this morning. Local authority employees have such a weighting. Their rates have been negotiated through the National Joint Council for Local Authority Services and are already in their wage rates. They have a distant island allowance of £9.06 a week. It applies to manual workers and a wide range of administrative and professional staff, including the teaching profession. However, it is not for the Government to dictate the rates of pay which should apply to other enterprises in the right hon. Gentleman's area or in that of any other hon. Member.
§ Mr. Donald Stewart
I remind the Minister that there is a London weighting allowance which everyone accepts as being justified by the high cost of living in London. My argument is that the same principle should eventually apply in other areas of the United Kingdom, such as the Highlands and Islands and other rural areas where there are special difficulties.
§ Mr. MacKay
Obviously, in local authority negotiations the local authorities have been persuaded by the union side that there should be some sort of weighting for the Western Isles. It is up to the employees' side, in negotiations with private employers, to persuade them that a similar weighting should be given to their employees in the Western Isles.
With regard to the community enterprise programme, I share the right hon. Gentleman's concern about the rising numbers of long-term unemployed in the Western Isles. I think he will recognise that the Western Isles has received very favourable treatment under the community enterprise programme. Compared with other areas with serious problems of long-term unemployment, it has received a relatively high share of the available places. For that I suppose the Western Isles council and the people involved can take a bow.
At the end of June, the 200 community enterprise places filled in the Western Isles represented 3.1 per cent. of the Scottish total of CEP places, whereas the long-term unemployed in the Western Isles are only 0.4 per cent. of the Scottish total. The figures show that the Western Isles have been very quick off the mark and gained considerably in the initial stages of the CEP. In recent months demand for the programme nationally has been sufficiently high to fill all the available places, and further discrimination in 1455 favour of the Western Isles could only have been at the expense of other areas which have equally severe problems and have put in bids for CEP places.
Earlier this week, my right hon. and learned Friend the Chancellor of the Exchequer announced details of the new community programme scheme which will provide temporary employment for 130,000 long-term unemployed people throughout Great Britain, which is about 100,000 more than under the present community enterprise programme. The new programme will enable more people to participate, both full-time and part-time, in projects of community benefit similar to those at present being undertaken under the community enterprise programme. I am sure that in allocating the resources available under the new programme the Manpower Services Commission will take full account of the new needs of the Western Isles, as of other parts of the country where long-term unemployment is a particular problem.
The recent news that the Harris tweed industry was having some difficulties is disappointing to us all, because it is one of the traditional industries in the islands and has a splendid export record—about 80 per cent. of its products are exported. The recent redundancy among mill workers is a serious matter for those employed full-time, and the outworkers—the part-timers who produce the tweed and give it its distinctiveness—have lost an important additional source of revenue.
The industry usually suffers some slackening off at this time of the year. I need not tell the right hon. Gentleman that, because he spent many years working in the industry and knows it much better than I do. I hope that it is a temporary phenomenon. I am sure that he will be able to recall other similar circumstances arising at previous times. We must hope that in the autumn, with the new patterns and designs, the market will pick up, because the industry is important to the Western Isles, not just for the employment in the mills but for the employment that it gives crofters in the islands.
1456 Not all the news from the Western Isles is gloomy. For example, on Barra, Ardveenish pier has been completed, and there are good prospects for a fishmeal development on a factory site adjacent to the pier. In Harris, the Lingabay quarry project which will produce armour stone for marine-related construction projects is going forward, with the prospect of 15 new full-time jobs plus other ancillary jobs which will be created as a result.
Tourist development at Borve Lodge, Harris, has recently been announced by the HIDB and that will also create new employment. The conversion of the lodge to a hotel at a cost of £½ million should be completed in time for the 1983 season and will involve five full-time and 14 seasonal jobs. Individually, these may be small initiatives but, as recent events have brought home to us, small industries which are soundly based and have a long future are perhaps a better bet for the long-term economy of the Highlands than larger glamour industries which can cause problems in themselves and which, if anything happens to them, can cause great damage to the economies in the area.
I am sure that the right hon. Gentleman welcomes those initiatives, and especially the IDP, although he is always a little reluctant to say so because that would be conceding that the EEC might have something to be said for it. Considerable investment is going into the IDP. I know that he welcomes the help that we have given to the ferry services and our statement that we shall continue along that road, because we recognise that without help to the ferry services the islands' economies would be in great difficulty and danger.
We are doing our utmost to help with the difficult long-term problem in the Western Islands. I very much hope that people will come forward as quickly as possible and that the IDP gets off the ground, to the benefit of the farming industry in the Western Isles, to the benefit of the fishing industry, and, of course, spinning off from them, to the benefit of the whole community.