HC Deb 20 April 1983 vol 41 cc390-8

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

11.5 pm

Mr. Robert Parry (Liverpool, Scotland Exchange)

I am glad to have an opportunity to raise the subject of the critical unemployment situation on Merseyside and in Liverpool, particularly in the inner urban areas. I make no apology for doing so at such a late hour. The House is aware of my deep concern about the problem, because I have drawn attention to it on many occasions — in debates, in written and oral questions, in early-day motions, on points of order and on Standing Order No. 10. After this Adjournment debate, I shall have used every possible device to highlight the grave situation in Merseyside.

The problems are getting more critical every week and, indeed, every day of the year. I have done some research, and I believe that I have raised the matter on more occasions than any other hon. Member. In view of the massive amounts of unemployment in the inner urban areas of Liverpool and particularly in my own constituency, it is my duty to do so. I do not say that in any boastful spirit. When the Government were first elected, I believed that unemployment would be one of the most crucial issues, and I therefore decided to launch a campaign to fight unemployment at every possible opportunity.

There has always been high unemployment: on Merseyside, even in the days of so-called full employment. At one time after the Government came to power we believed that the level must have reached saturation point, but we were wrong. The closures continue. The official Government figure for male unemployment in my constituency, given in the census in November 1981, was 43.5 per cent., and unemployment has increased substantially since then. In my constituency, more than 50 per cent. of the males are now unemployed. All hon. Members on both sides of the House will agree that for one man in every two to be on the dole is unforgivable and indefensible.

Unemployment is not an act of God. It is the result of deliberate economic measures—introduced, in this case, by a woman Prime Minister. The Government's policies are eroding the industrial base of Merseyside, and parts of the dockland areas are industrial deserts and wastelands. But the Government do not appear to perceive the heartbreak, frustration and despair that they have caused among the unemployed—particularly among the middle-aged, who see no hope of ever working again, and the young people and school leavers, some of whom have never had a job and face a future without hope. The recent cynical attempt to recruit unemployed youth for training in the armed forces will be treated by youngsters on Merseyside with the contempt that it deserves.

Since the Government came to power in May 1979 the number of jobless and factory closures on Merseyside has reached epidemic proportions. It began with the closure of the Tate and Lyle refinery, resulting in nearly 2,000 people being thrown on the scrap heap. I warned the Prime Minister when I met her al: No. 10 Downing Street of the consequences of that closure. The domino effect that followed resulted in the closure of the Whitbread brewery in my constituency, with the loss of several hundred jobs.

The original Threllfalls brewery was founded there more than a century ago. The Barker and Dobson confectionery factory followed, with the loss of several hundred jobs. Last winter, Lyons Maid ice cream closed with a further loss of 400 jobs. There have also been job losses in the cake and biscuit industry. It is no coincidence that all those industries rely on sugar for their products.

The list of further closures read like a catalogue of misery from the CBI directory. Thousands of jobs have been lost through the closure of the Massey-Ferguson plant at Kirkby, the Courtaulds factory at Aintree and the Meccano factory. The proposed closure of the Plessey Cheapside factory in my constituency will axe hundreds of more jobs. Woolworths in the city centre—the first Woolworth store in the United Kingdom — has announced its closure, as has the Binns city centre store. The latest nail to be driven into our coffin was the shock announcement last week that Kraft Foods intends to axe 930 workers at Kirkby.

None of the aforementioned companies has closed through low productivity or bad labour relations. They have closed due to the greed of multinational and British companies which having made trading surpluses over many years, wish to maximise their profits without giving a damn for the people who created those profits. I cite a perfect example of the naked and vicious face of capitalism. On the day on which Tate and Lyle announced the closure of its factory it also announced record profits.

I hope that the Minister will confirm my statement about industrial relations in the companies that I have mentioned. The lie that Merseyside's problems are all caused by strikes must be nailed once and for all from the Dispatch Box. Will he also ensure that his right hon. Friend the Secretary of State asks the Secretary of State for Industry and the Minister with responsibility for Merseyside to have urgent talks with the chairman of Kraft to see whether the jobs there can be saved.

Mr. John McWilliam (Blaydon)

Where is the Minister with responsibility for Merseyside?

Mr. Parry

That is a good question. I have no idea.

Unemployment and its consequences have taken a heavy toll in all sections of the community, with traumatic and, in some cases, tragic effects. People have committed suicide because they were depressed at the thought of life on the dole. Only last year, two teenagers took their lives and left a message that they had given up hope of ever finding jobs. Old people have died of hypothermia because they could not pay heating charges or standing charges for energy. There has been a dramatic increase in the number of young people involved in glue-sniffing and solvent abuse, as the director of education has confirmed.

There has also been a serious problem involving housewives getting into financial difficulties through borrowing money from professional moneylenders —sharks who have been charging interest rates between 600 per cent. and 1,000 per cent. Once in the hands of these Shylocks, poor people have not been able to escape. The results have been broken marriages and nervous breakdowns. In the past year or so two young married women died after throwing themselves from multi-storey blocks on Merseyside. I congratulate the Merseyside county council, especially Councillor John Gallagher, chairman of the consumer protection committee, on its investigation of this problem.

Most of the troubles can be attributed to the fact that there were nearly 90,000 registered unemployed in Liverpool in March. That is nearly 19 per cent. across the board. In the Merseyside special development area the figure was 133,000—almost 20 per cent.

The Government must embark on a massive building programme in the public sector to get the economy moving again. Liverpool has pre-war tenement blocks of flats and slums. At the same time, under the Liberal/Tory coalition on the city council more than 25,000 people are on the housing waiting list. I am pleased to see my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) on the Front Bench because he and I have both worked in the building industry and we are still members of construction industry union branches. Merseyside has one of the highest levels—if not the highest level—of unemployment in the construction industry in the United Kingdom. that even includes Belfast. At the same time, Liverpool has thousands of outstanding repairs.

I wish to make three suggestions to the Minister, which I trust he will take on board, that may help Merseyside. He will have seen early-day motion No. 448 on the proposed Falmouth terminal application. I have lead a deputation to the Secretary of State for Transport. Several of my hon. Friends who represent Merseyside, and trade union representatives, have pointed out that if this application gets the go-ahead it will mean the death of the Seaforth terminal and the end of the port of Liverpool. This application is opposed by my union, the Transport and General Workers, and if it leads to a national dock strike, please do not blame the dock workers or the T and GWU. The Government are being asked to kill this application once and for all. We do not need the Falmouth terminal. There is already overcapacity in our port. I hope that the Government will stop any further applications on this site.

Secondly, will the Government introduce legislation to allow British Gas to give contracts to British firms, instead of the tendering system that allows foreign tug boatmen, especially the Dutch, to do the work of British tug boatmen? British tug boatmen have the greatest expertise of any in the industry. I am thinking especially of the work that could be carried out by our own workers in the Morecambe Bay and Celtic Sea regions.

Thirdly, will the Government give free port status to Liverpool? This will be great stimulus to the area and will help provide badly needed jobs. Positive, not cosmetic measures, are needed, such as the garden festival, the urban development corporation and the enterprise zone, which will provide a few jobs, even in the long term.

Last night the Prime Minister quoted the old Liverpool sea shanty, Maggie May. I do not know whether the right hon. Lady or her advisers know the story of Maggie May. I will quote briefly from the song: Come gather round, you sailor lads,"— I do not know whether that is referring to the right hon. Member for Sidcup (Mr. Heath)— and listen to my plea, And when you've heard my tale you'll pity me. I was a bloody fool in the port of Liverpool, The first time that I came home from sea. We was paid off at the Home from the port of Sierra Leone, And three pound ten a week it was my pay. With a pocket full of tin I was very soon taken in By a [pretty] girl with the name of Maggie May. Last November I was suspended from the House for attacking the Prime Minister.

Mr. Eric S. Hafer (Liverpool, Walton)

Will my hon. Friend give way?

Mr. Parry

I will.

Mr. Helfer

The second verse states: Too well I do remember when I first met Maggie May, She was cruising up and down old Canning Place, With a figure so divine like a frigate of the line, And me, being a sailor, I gave chase. Next morning I awoke, I was flat and stony broke, No jacket, trousers, waistcoat could I find. When I asked her where they were, she said to me, 'Kind sir, They're down in Kelly's pawnshop, number nine."' That is precisely where the Prime Minister and her Government are putting most of our people.

Mr. Parry

I agree entirely with what my hon. Friend the Member for Walton has said. It was through his initiative and ingenuity today that I have a copy of the song.

I was suspended for one day from the House for attacking the vicious and hard policies of the Prime Minister and her Government towards the regions where there is massive unemployment. I did not feel that I had used unparliamentary language on that occasion. If I were in the same position again, I would probably say the same thing again. Maggie May was a poor lady of easy virtue. I am sure that she had a far warmer heart than the Prime Minister. The right hon. Lady is heartless, uncaring and totally indifferent to pain and suffering. Maggie May may have robbed a few "homeward-bounders," but the Prime Minister has robbed the old and the poor of their independence, the jobless of their pride, the youngsters of their dignity and a few unfortunate people of their very lives. The Prime Minister has much to answer for because of what she has done to this country and to regions such as Merseyside, Tyneside and Clydebank.

11.20 pm
The Minister of State, Department of Employment (Mr. Michael Alison)

The hon. Member for Liverpool, Scotland Exchange (Mr. Parry) deserves all our congratulations on having the good fortune to secure this debate. Indeed, he and I have had the good fortune to hold it early in the evening. I certainly welcome the opportunity to reply at least to some of the points that he has raised. The hon. Gentleman said that the Prime Minister was answerable for many things. She will seek a response from the public, and the result may surprise the hon. Gentleman.

Of course I share the hon. Gentleman's concern about the continuing high level of unemployment in Merseyside. Merseyside has, alas, almost historically had a high level of unemployment particularly associated with the decline of its port and port-related industries. Indeed, the hon. Gentleman referred to that. Although new manufacturing industry has been introduced, it has not yet grown quickly enough to provide for those displaced from declining industries and school leavers. I therefore have no wish to underestimate the difficulties that the consequential unemployment brings. I am also well aware of the misery and sense of hopelessness that afflict those who are unfortunate enough to lose their jobs.

The current high levels of unemployment in this country as a whole result partly—as I think all would agree—from the world recession and partly from past inflation and our chronic lack of competitiveness. A lasting reduction in unemployment on Merseyside and in the rest of the country depends obviously on industry becoming more competitive by continuing to gain customers and by becoming more adaptable to changing markets. All the signs are that economic recovery is beginning to gather pace with inflation down, industrial output beginning to rise, sterling becoming stronger and interest rates lower.

The Government have played their part in helping that recovery and will continue to do so by establishing a sound monetary and fiscal framework to encourage that growth. The recent Budget, for example, contained quite a wide range of measures to encourage recovery directly, and to provide opportunities for growth in employment. They included tax cuts to provide an incentive for direct personal taxpayers, and for business to help it to reduce its costs and to improve its power to compete. There was also a wide range of other carefully directed measures, some specifically focused on the unemployed, others on particular sections of the economy, and others designed to further recovery across the board. The people of Merseyside will share the benefits of all those measures.

Already, there are some encouraging signs that Merseyside will not be left behind in any economic recovery. There are, after all, 542,000 Merseysiders in work and there are plenty of signs of basic strength in many of the local industries, including glass-making, chemicals, food processing, detergents, brewing and pharmaceuticals. On the automotive side, Vauxhall has been performing well and Champion Spark Plugs in the Wirral has been expanding. I am pleased to hear, for example, that Prudential Window and Door Systems is to open a new high technology factory in Merseyside, that new enterprise workshops for small businesses have been opened in Liverpool providing up to 300 jobs, and that a 60-acre high tech park is to be established next to Plessey's Edge lane factory, sponsored jointly by Plessey and Merseyside county council.

The hon. Member for Scotland Exchange referred to Kraft Foods. Although the items that I have mentioned are encouraging developments, I am aware that large redundancies continue to be declared in the area. The proposed redundancies at Kraft Foods are essentially and unavoidably a matter for the commercial judgment of the company—it is a private company—and we have no jurisdictional power to influence what it decides. We cannot intervene directly. However, we shall ensure that all the MSC facilities will be available to help those who are make redundant to find alternative employment or training.

Mr. Parry

When I raised the issue on a previous occasion, the Prime Minister said that she would not intervene in a company's commercial decisions. In a letter sent to me yesterday the Minister's right hon. Friend said the same thing. If the Government are really concerned about unemployment, surely they can have discussions with companies with a view to retaining jobs and helping Merseyside. I know that Merseyside is receiving help, but I understand that it costs about £5,000 a year to keep a person unemployed. I am certain that the millions of pounds that are being spent on dole money or supplementary benefit could be better used. Workers who are not laid off will pay taxes and contribute to the national insurance scheme, for example.

Mr. Alison

The hon. Gentleman is overlooking the millions of pounds that are made available indirectly to firms such as Kraft Foods through reductions in the national insurance surcharge, through the funds that have been made available through the temporary short-time working compensation scheme—I do not know whether Kraft Foods has yet had a go at that scheme — and through the indirect forms of assistance that have been provided by the fall in interest rates and in inflation. All these factors have been of enormous indirect benefit to companies. The Government have no remit to involve themselves directly in the commercial judgment of a private company.

The hon. Gentleman criticised my right hon. Friend the Prime Minister for her alleged heartlessness, which I refute. The soundest and surest way to rebut what the hon. Gentleman is saying is to give him some examples of what we have done in providing hard cash to encourage development on Merseyside. For example, an inner city partnership area in Liverpool is one of the features of the Liverpool scene. Under the inner city partnership scheme alone it will receive £23 million in 1982–83. As part of the Merseyside special development area, Liverpool and Birkenhead are benefiting from the full range of regional incentives at the highest levels available in Great Britain. Indeed, since the Government came to office we have paid out over £114 million in assistance to Liverpool under the Industry Act.

All Merseyside's metropolitan districts are now designated under the urban programme and receive extra funding for regeneration, amounting to about £32.5 million in 1982–83. There is an enterprise zone at Speke which has now been enlarged and the Merseyside development corporation intends to bring 865 acres of disused dockland into effective use with a £24 million allocation for 1982–83.

Merseyside has received substantial benefit from the European social fund. As an assisted area, Merseyside receives priority for its employment and training schemes through the fund's assistance to regions of high unemployment. Merseyside is also classified as a "restructuring zone".

Mr. Heffer

rose—

Mr. Alison

I shall not give way to the hon. Gentleman, as there are only a few minutes left to me. Merseyside obtains high priority under the fund's schemes, involving young people. In 1982, 18 schemes specific to Merseyside were assisted, including nearly £900,000 to Merseyside county council for a wage subsidy scheme to assist the recruitment of 1,875 unemployed workers into new permanent jobs and nearly £300,000 to Merseyside Training Ltd. to assist 582 of the less able-bodied who are unemployed to find work.

The task force, so called, which was especially set up by my right hon. Friend the Secretary of State for Defence, the then Secretary of State for the Environment, is looking for ways of strengthening Merseyside's economy and improving its environment. In co-operation with local companies, local authorities and the MSC, the task force is seeking to involve Merseysiders fully in the many new initiatives. The approach is practical and realistic and is very much reliant on the commitment of the people of Merseyside to the regenerration of their own environment and industry. A start has been made and there can be no doubt of our commitment to continue, I am particularly pleased that the task force is putting so much emphasis on small firms, since the Government believe that small firms play a major role in creating jobs. Since we took office we have introduced more than 110 separate measures to help them, and generous provisions in the recent Budget continue this trend.

Tax concessions to encourage buy-outs, extension of the loan guarantee scheme, and the new business expansion scheme, which replaces and improves the business start-up scheme, are all important developments in our efforts to ease access to finance, often a major source of concern to small firms. We are also improving tax allowances on industrial building and small workshops and increasing grants to support innovation and investment. In particular, we are providing £100 million over the next three years to reopen the small engineering firms investment scheme. That has been widely welcomed in all parts of the House. This scheme, which helps small engineering firms to invest in advanced capital equipment, proved remarkably successful when introduced last year.

The hon. Gentleman made special reference to early-day motion 448 about the Falmouth container terminal. Thanks to the rapidity and enterprise of my hon. Friend the Member for Hertford and Stevenage (Mr. Wells), who helps me on the Back Bench, I have a copy of the motion in front of me and have taken note of it.

I set it in the context of the reference that the hon. Gentleman also made to the so-called free port proposals. I noted that the hon. Gentleman is enthusiastic about the scheme. There will be ample opportunity for potential free port operators to make their case before a decision is taken on the locations of the experimental free ports announced by the Chancellor. The Government will shortly be publishing the criteria by which applications for free port status will be judged. It will then be for potential operators to submit evidence in the light of the guidelines. All bids received will be fully considered and any encouragement the hon. Gentleman can give to possible free port sponsors will help the momentum. I take note of the points he made.

Mr. Heffer

Can the Minister spell out, if he has the information, how much of the money from the European social fund is in grants, how much is in loans, and what the total is?

Mr. Alison

I would need notice of that. I shall look quickly to see if I can give the hon. Gentleman the figures. I am afraid they are not broken down in the advice I have. Since the hon. Gentleman has raised the question, I shall write to him about it and give him the information.

The Government have also played their part in giving direct help to the unemployed. Over 25,700 young people have entered the youth opportunities programme in Merseyside since April 1981. Some 10,721 people in the area are currently benefiting from the temporary short-time working compensation scheme, the job release scheme, the community enterprise programme, the young workers scheme and community industry. The temporary short-time working compensation scheme is one that Kraft might be able to make use of.

Young people are particularly vulnerable, as we all agree, in periods of high unemployment. They lack basic work skills to compete in a difficult labour market and are disadvantaged by too high wage rates. Recognising this, the Government have always given priority to help the young unemployed. Over the past two years there have been over 50,000 entrants to the youth opportunities programme in Merseyside. That is a substantial number. The guarantee to school leavers of an offer of training on YOP was substantially met last Christmas, with only just over 200 eligible young people in the area not having received a suitable offer of training.

One important factor influencing companies in deciding whether or not to establish themselves in the area is the level of rates. I therefore regret that increases in Merseyside rates have been so high. Had all the authorities in the area budgeted to meet the Government's guidance figure, the increases would have been lower.

I hope it is clear that the problem of unemployment in Merseyside is one that deeply concerns us and needs to be tackled from many angles. There are many encouraging signs that new businesses are getting off the ground and the process of decline is being halted and reversed. The Government are doing all they can to encourage growth in the area, making Merseyside the most heavily assisted area in Britain, and to help those made unemployed as a result of industrial decline and uncompetitiveness stretching back over a long period. We must ensure that, as the world recession eases up, we have a better trained work force and more productive industries ready and willing to grasp opportunities. It is for the people of Merseyside to respond to the challenge as I am sure they will.

Mr. Heffer

Is the right hon. Gentleman aware that there is now a fear among many of those who are training youth that they will be made redundant? That will badly affect youth training. I have recently written to him about this matter. I hope that he will take that letter on board, because of the growing feeling among those people that they will be made redundant.

Mr. Alison

I shall look carefully at the hon. Gentleman's letter, but at first sight I doubt the reality of what he says this year. For example, based on the intake coming in under the youth opportunities programme, the numbers will ensure that the training period will last for 12 months or more. I therefore believe that that fear is misplaced—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-five minutes to Midnight.