§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]1.12 am
§ Mr. Jonathan Aitken (Thanet, East)
The purpose of the Adjournment debate is to commend to the Government one or two new initiatives and new ideas designed to improve the employment and economic situation in Thanet and north-east Kent. Perhaps I should explain that in our area we sometimes get mildly irritated by officialdom's tendency to classify us as part of the prosperous south-east. The reality is that we are something of a Cinderella corner of England in which there are coastal towns and villages whose unemployment rates are among the highest in the kingdom. If my hon. Friend the Member for Canterbury (Mr. Crouch) and my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) succeed in catching your eye, Mr. Deputy Speaker, they may give precise figures for their constituencies.
For my part, I simply place on record the bleak statistic that in the Ramsgate and Broadstairs travel-to-work area the overall unemployment rate is well above the national average at 15.8 per cent. and for adult males it is 19.8 per cent. Although there are flickering signs of hope for job seekers, such as a slight pick-up this year in the number of advertised vacancies, and encouraging developments among companies specialising in the new electronic technologies such as Racal in my constituency, nevertheless only the most sanguine of optimists could suggest that there are in reality good prospects for a substantial reduction in the unemployment rate in the foreseeable future.
That is why the time may be ripe to explore the possibility of new initiatives. My first proposal for stimulating economic activity in Thanet and north-east Kent is that the Government should consider establishing an enterprise zone in the area. The whole idea of enterprise zones was the brainchild of my right hon. and learned Friend the Chancellor of the Exchequer and it is one of the success stories of the Government. A number of enterprise zones have been established in various parts of Britain, with beneficial results for jobs, factories, new small businesses and economic activity generally.
Some enterprise zones are now in the process of being made operational, among them one in north-west Kent, an area where the problems and opportunities differ little from those in north-east Kent. In view of the lifelong industrial experience of my hon. Friend the Member for Canterbury, I shall leave it to him to develop the case for an enterprise zone in our area. Suffice it to say that I wholeheartedly support the idea and his specific suggestions.
I shall concentrate on my second proposal for stimulating employment in Thanet, which is that Ramsgate should be designated as a free port. That is not a way out idea or pipe-dream. As my hon. Friend the Minister knows, a plan for introducing the concept of free ports into Britain is now under active consideration by Ministers at the Treasury and the Department of Trade. In general terms, it is not appropriate in this short debate for me to rehearse all the broad arguments in favour of free ports, except to say that it is astonishing that we in Britain 273 have waited so long before even thinking about introducing that concept, which has been so successful in other parts of the world, into our own country.
However, in specific terms, I will argue that Ramsgate would be an ideal location for one of Britain's first free ports. Already it is one of the cross-Channel gateways to Europe. Ramsgate has a large underutilised harbour, a large underutilised airport at Manston and a modern hoverport, which, unfortunately, since last year's merger between HoverLloyd and Seaspeed, has fallen into near disuse. All those sites have land, buildings and facilities with plenty of spare capacity and far too much empty space.
However, if Ramsgate were to become a free port, in no time those facilities would hum, bustle and jump with new commercial activity and new jobs. How would such a transformation come about? As the House knows, a free port, sometimes called a duty-free zone, is created simply by designating an area of land in or around a port into which goods can be imported free of all customs and tariff duties. The area of land is treated for foreign trade purposes as if it were a foreign territory. Imported goods that come into the free port and are then exported to another foreign country leave the free port still without paying customs or tariff duties. If the imported goods leave the free port for a destination in Britain, they are taxed as they leave the free port as if they had arrived straight from a foreign country.
How might that help commerce and employment in Ramsgate? First and foremost, a free port at Ramsgate would become a significant international transit centre for imports. One could be certain that a number of service industries would spring up, such as warehousing, packaging, sorting, freight handling, insurance and shipping. In addition to those flourishing new service industries, all of which would create jobs, the Ramsgate free port would attract manufacturing industry into its boundaries. Given that foreign materials and components come into the free port free of all duties, a manufacturer of finished goods for export would have lower input costs than almost anywhere else in the country.
In that way a free port at Ramsgate could be a magnet for new investment, attracting within its free trade and deregulated boundaries manufacturing industry that might not otherwise have developed at all.
The pattern of free ports all over the world has been to attract service and manufacturing industries into their boundaries. A British free port at the gateway of Europe in Ramsgate is an exciting, yet realistic, vision. Perhaps it would take some time for a Ramsgate free port to pick up at the level of activities in Hong Kong or Dubai, yet I believe that it would work well and succeed, and bring jobs and economic activity to a town that badly needs them. For that reason, I commend my idea to the House.
§ Mr. W. R. Rees-Davies (Thanet, West)
I support every word that my hon. Friend the Member for Thanet, East (Mr. Aitken) has said.
The Minister will remember that Thanet was an industrially assisted area for some years. During that time we obtained a considerable quantity of industry. We were then dezoned. In November 1982, therefore, I asked my right hon. Friend the Secretary of State for Industry 274 whether he would consider reintroducing Thanet to the list of industrially assisted areas. He told me that it was not proposed to do so.
In those circumstances, we feel that an enterprise zone might well fit the case. I understand that enterprise zones offer limited benefits in small areas, and in this case would apply to the free port suggestion put forward by my hon. Friend the Member for Thanet, East, to Margate and to Herne Bay. Those three areas are complimentary to the great city of Canterbury. The benefits include an exemption from rates on industrial and commercial property, and 100 per cent. allowances for corporation and income tax on capital expenditure on industrial and commercial buildings, and would be of immense value, together with the tax relief that investors can receive for small businesses.
I can see no reason why tourism should not receive the benefits that accrue to the manufacturing and industrial areas of the other 12 enterprise zones that have been set up. Therefore, there is no reason why that cannot be achieved. Thanet has severe constraints on land. There is agriculture, and an infrastructure that exists to enable us to create a considerable number of jobs. In Margate, there is an urgent need for a marina. The same is true of Herne Bay and of the port in Ramsgate. There is an urgent need for conference centres in Margate, and in the Kings Hall, Herne Bay. In addition, we must increase caravan sites. A caravan site at Reculver could easily be extended and trees could be planted to ensure development.
Much could be done to improve the beaches, which would in turn lead to rapid expansion. Therefore, special consideration should be given urgently to the promotion of the tourist industry in the Thanet towns and in Herne Bay. It has an immensely important role to play in the future economic development of those towns. The main problem about industrial development in Thanet and Herne Bay is that despite the many unemployed in the area, it has never received proper consideration as an enterprise zone or as an area for special grant. As a result, our locality always competes with the business start-ups in Devon, Cornwall, South Wales and the north of England, which have had the advantage of grants, offering them the facilities for business, enterprise and investment. In the event of the Thanet towns becoming an enterprise zone, assistance could be given both in that way, and from the EEC for the promotion of enterprises. It could al so he given in the form of environmental grants. The European commissioner for tourism, Mr. Contageorgis, told me that with Government policy as it is, no grants could he forthcoming unless the area became an industrially assisted area, or an area receiving special grants. Unemployment in Margate is severe. Male unemployment is running at 27 per cent. Unemployment in the area is, in general, just under 20 per cent. Due to the lack of assistance, the grave problem that we face of trying to modernise has been set at nought.
Any concessions to subsidise the buildings, or to give special rate concessions would rapidly raise the tone and standard of this district, and would enable us—for the first time—to obtain the advantages that have been given to so many areas in the country.
§ Mr. David Crouch (Canterbury)
I am grateful to my hon. Friend the Member for Thanet, East (Mr. Aitken) for letting me complete the Kentish trio of speakers. I shall be brief.
There is a pocket of unemployment in the coastal towns of north-east Kent. Whitstable, Thanet and Herne Bay are typical examples of such pockets of unemployment. The rate of unemployment in Whitstable and Herne Bay, taken together, is now over 20 per cent. In Canterbury, it is about 12 per cent., which is the rate for the whole of Kent.
The pockets of unemployment are not a new problem in north-east Kent. We have had the problem for many years. Tourism has declined and nothing has taken its place. In my constituency there is an industrial estate between the two towns of Whitstable and Herne Bay, and another at Swalecliffe. But they are tiny. There are few jobs to be found there—about 150 vacancies in Whitstable and Herne Bay with about 2,300 people out of work. People must look for work elsewhere. They look to Canterbury, which has 2,600 people out of work with 330 jobs on offer. There is no industry in Canterbury. It is not an industrial town but a cathedral town with retail trading, service industry and tourism. It flourishes on those industries. One other industry is education, which attracts people to work in the great variety of educational opportunities that exist there.
There is not much hope in Thanet, as has been illustrated by my hon. Friend the Member for Thanet, East and my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies). There are nearly 7,500 people out of work with fewer than 200 jobs on offer. Ashford and the Medway towns could be places to seek work, and they are the permitted industrial growth points in Kent. But Ashford has recently seen the closure of its railway workshops, and Chatham is facing the closure of its dockyard. London is the only hope of finding a job, but the price of £1,000 for a rail season ticket is not feasible for the school leaver.
Our constituents are entitled to a better chance in life. We should not drive people away from home to work when they could be working in their own towns. We should aim to produce self-sufficient communities rather than dormitory towns and commuter centres. Canterbury does not need special help. It is self-sufficient with tourism, shopping, entertainment and education. But Whitstable, Herne Bay and Thanet are different—they need special treatment. They lack job opportunities. They are not centres of attraction but problem areas. The Government could put that right at a stroke.
We need to attract industry to those towns. A factory or an office in the country, by the sea, with good labour available, excellent educational resources, good road and rail communications—they could be better, but that is another matter—most of the channel ports and an international airport at Manston. Why have not businesses gone there already? It is because they have been directed to go elsewhere—to Ashford and Medway, the industrial growth points. I want the Government to stop the rot that has set in in north-east Kent and give the towns enterprise zone status. It would be one of small sectors in those areas—not a continuous belt. It would be the blood transfusion that they need. The towns are tailor made for such treatment. They would fit the Act which introduced the great innovation of enterprise zones. They would show 276 immediate results without surrounding towns being harmed. The other towns would not be affected as they stand on their own feet. I have tried to show that in the case of Canterbury.
I urge my hon. Friend the Minister seriously to study the proposal. If he cannot answer in the affirmative tonight, which we do not expect, I hope that he will take it on board from three hon. Members serving an area that is really worried about its future. Such an initiative would help to revitalise a part of England that has been forgotten for too long.
§ The Under-Secretary of State for the Environment (Sir George Young)
The Government are always glad to receive new ideas or new initiatives, especially from my hon. Friend the Member for Thanet, East (Mr. Aitken), my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) and my hon. Friend the Member for Canterbury (Mr. Crouch). They compose a formidable team to represent the interests of the part of Kent that they serve. There was a salutary reminder that within the southeast there are pockets of relatively high unemployment. I looked at the figures for parts of north-east Kent, and they are much higher than the average for the south-east.
I wish to refer at the end of my reply to the imaginative proposals of my hon. Friend the Member for Thanet, East for a free port at Ramsgate, and I shall deal initially with suggestions for an enterprise zone. Some of the initiatives described by my hon. and learned Friend the Member for Thanet, West would have to be processed, in the first instance, by the district council rather than by my Department. Some of his other suggestions were, I think, directed at the Department of Industry. I am sure that my colleagues in that Department are aware of his views.
I wish now to deal with the concept of the enterprise zone. The idea is to try to bring activity to relatively depressed areas and to achieve this through a judicious mixture of freedoms and incentives. Hon. Members are aware of the tremendous promotional fillip that a zone gives to an area. We have done our best through the local authorities to ensure that progress is not inhibited by bureaucratic delay or lack of foresight. It is perhaps less well known that there has been a high level of activity in many zones since they were announced. It is only just over 18 months since the first zone was established in Swansea and already the successes are there for everyone to see. In the most successful zone, Corby, almost all the land is now taken. Here, as elsewhere, the benefits are being felt well beyond the zone and throughout the town as a whole.
It would be idle to pretend that all the activity in the zones is new firms or that the activity would not have happened without the zones. Some of the jobs are provided by firms which have moved, not because of the zone—it still would not be worth their while financially—but because they had to move anyway to expand and chose to locate in the zones. Even in these cases, especially in older urban areas, we would expect that many of the jobs would have been lost to these areas without the zones. But, in addition, a number of the firms setting up in the zones are new. We know that the small industrialist who wants to build and occupy his own factory is particularly encouraged by the freedoms available to him.
It is, I am sure, evident from what I have said that we have been keeping a close watch on progress in the zones. The response was enormously encouraging. It showed that 277 we were right to provide this opportunity. We invited more bids and received them from 50 authorities, both Labour-controlled and Conservative-controlled. These bids were of a high quality. We decided, after considering all the cases, that we should increase the number of new zones for England from the seven that we had originally envisaged for the second round to nine. In addition, there were to be two new zones in Scotland and one each in Wales and Northern Ireland.
I come now to the heart of the debate. We received applications, as I am sure hon. Members knows, from authorities in Kent but Thanet district was not among them. We agreed that the two bids—a joint one from Gillingham and Rochester and one from Gravesham—should be combined into a single zone with segments in each authority. We hope that the zone will be promoted and operated jointly. Thanet could not be considered for an enterprise zone because it did not make an application to us. I am sure that my hon. Friends will ensure that their remarks tonight are made known to their local authority so that if the policy of enterprise zones is extended there will be an awareness of the benefits that could accrue to north-east Kent.
The decision on north-west Kent was reached after paying attention to the difficulties facing the economy of the area and the impact from the closure of Chatham dockyard with the consequent loss of 7,000 jobs. We were therefore pleased to grant the area a zone when it not only submitted a bid but, in meetings with us, showed considerable enthusiasm and willingness to work together for the good of the area. I hope that the north-west Kent zone will be a success. I expect it to benefit from its excellent location close to London and to the prosperous part of the south-east.
I wish now to refer to the foreboding that has been expressed about the possible impact on the areas surrounding the enterprise zone. We have had strong and well-argued representations from, for example, Swale which is concerned that the existence of a zone in a neighbouring authority will siphon off all the new activity and sterilise its own developments. Some of those fears have been echoed in speeches in this debate. I sympathise. However, the evidence is that a successful zone stimulates growth well beyond its borders. The industry and commerce attracted to the north-west Kent zone should generate orders for other local firms and services. The parts of north Kent represented by my hon. Friends will undoubtedly benefit from this growth and opportunities will be created for some of those made redundant by the dockyard rundown.
The unemployment figures give cause for concern. The modifications to the first Kent structure plan alteration have now been published. It sets out the strategy for dealing with the problem of unemployment in the area. The alteration sets out policies to encourage growth in manufacturing industry and service industry and in this respect seeks to ensure that a readily available supply of land for industrial and warehousing development is available in the urban areas.
I was also delighted to find that Thanet district council has produced a draft urban plan for consultation. This allocates nearly 19 hectares of land for industry as well as setting out policies to guide decisions on the establishment and expansion of industrial premises together with policies to retain industrial land and premises.
278 We have given increased priority to roads in the southeast. Between one third and one half of the trunk roads programme is now being spent on projects in the southeast. As my hon. Friends will know, the M25 is being built as a top priority, two sections of the M20 have now been finished and the A2 has been improved. The Government will assume complete responsibility for the A249 from the junction with the M2 to Sheerness once the current improvement scheme is completed and statutory procedures have been implemented.
There is a proposal for a bypass to Iwade on this route in the future and we will be seeking the public's views shortly. Kent has done very well in the past three transport supplementary grant settlements. In 1982–83 the whole of Kent's bid for current and more capital expenditure was accepted for grant. This was far greater than for any other shire county. In the 1983–84 expenditure allocations announced in December, Kent again received the highest amount of accepted expenditure amounting to £41.7 million, attracting a transport supplementary grant of £2.7 million.
We have recently made it clear that we would be looking again at the question of trunking the Thanet way, the A299. In particular, we wish to ensure that we are taking decisions on the very latest information, reflecting the recent developments such as the growth of traffic through Ramsgate port. In addition, just before Christmas discussion took place between shipping interests, Thanet district council and the Department of Transport concerning a proposal to carry out a major £12 million expansion of Ramsgate harbour.
The main thrust of my hon. Friend's remarks was that a free port should be established at Ramsgate. He illustrated the considerable benefit that would result not just to the economy in Ramsgate but to the United Kingdom economy as a whole. As my hon. Friend said, we have recently set up a working group on free ports. The terms of reference make it clear that its task is to examine in principle whether the establishment of free ports would be beneficial to industry and commerce in the United Kingdom.
We decided that the approach must be to look first at the main issues involved. It would therefore be premature to consider claims of individual locations at this stage. But if it is decided to introduce free ports, I can assure my hon. Friends that all bids for such facilities will be carefully considered, including of course the case for Ramsgate. What attracted me about the picture that my hon. Friend painted was that we were talking not of jobs that would be diverted from other parts of the United Kingdom but of the generation of new jobs and the ability to compete or, equal terms with some of the other free ports in the world. I am sure that my hon. Friends at the Department of Trade and at the Treasury who are considering this question will read with interest what my hon. Friend has said and will take into account his representations when they reach a decision on the case for free ports as a whole.
I hope that what I have said in response to the interesting debate provoked by my hon. Friend demonstrates our commitment to north Kent and to Thanet. The enterprise zone about which my hon. Friends have spoken is not the sum total of Government commitment to the area. I have mentioned our other actions, including the substantial investment in road infrastructure. The enterprise zone to the west provides a significant opportunity to the area to diversify its industry 279 and to provide the jobs it so badly needs. North Kent has a great deal of potential. I hope that the measures I have 280 mentioned and perhaps some of the measures that have been anticipated by my hon. Friends will help north Kent to realise that potential.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-one minutes to Two o'clock.