HC Deb 11 May 1983 vol 42 cc890-8

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

10.21 pm
Mr. Paul Marland (Gloucestershire, West)

This is not the first time that I have brought the employment problems of the forest of Dean to the attention of the House, and I make no apology for doing so again this evening. Employment in that area is declining seriously. In 1979 unemployment was 1 per cent. below the national average. By October 1982 it had increased by 8 per cent. but was still 1 per cent. below the national average. The latest figures available for April 1983 show that unemployment there is 15.3 per cent., which is 2 per cent. above the national average of 13.1 per cent. My great worry about the problem is the speed at which the rate of unemployment is climbing.

The problem is made worse by the fact that Rank Xerox, which has a large manufacturing plant at Mitcheldean, announced recently that during the next two years there will be 1,200 redundancies in that factory. The Manpower Services Commission has estimated that, assuming that no new employers come into the district, unemployment in the area could rise to as high as 20 per cent.

The forest of Dean is vulnerable because it is a relatively isolated location lying between the river Wye and the river Severn. It is not an ideal place for business to prosper, as my hon. Friend the Under-Secretary may remember from his recent visit there. Furthermore, Rank Xerox is the only major employer in the district. That is not a new phenomenon, because coal mining used to be the only business in the area, As the mines were closed, luckily for the district Rank Xerox began to develop a plant at Mitcheldean, but now that the company is laying off people the ripples from that giant are far-reaching and painfully felt throughout the district.

Rank Xerox recognises that, and I pay tribute to the company for what it is trying to do to help the area and those made redundant. It was announced today that a steering committee has been set up to monitor progress and to help with the retraining of as many ex-employees as possible, and that Rank Xerox has offered to pay for the retraining. The company has undertaken to prepare a brochure advertising the buildings that will be vacant at the plant to publicise them as widely as possible. The company is also prepared to commit any further resources and expertise that may be necessary to attract new industries to the district and to use its old buildings.

Rank Xerox has set up a job search programme which in the past has succeeded in finding jobs for those made redundant, and which will do so again. I expect that the steering committee will, in the fullness of time, deal with the job security offer that the Rank Xerox employees are anxious to have along the lines of the offer made to their counterparts in the United States of America. I imagine that the initial discussions between the management and trade unions will take place under the auspices of the steering committee. To add weight to the committee and to demonstrate its genuine concern for the effect that the layoffs are having in the district, I am pleased to be able to say that Haymish Orr-Ewing, the chairman of Rank Xerox, has undertaken to chair the committee and to have the committee sit in Micheldean. I have had talks with others working at the plant and I have found the men and women and their trade union representatives to be entirely realistic and to take a constructive view.

Competition has caused the problem. Mitsubishi and Canon are causing the difficulties at the plant. The fault does not lie with my right hon. Friend the Prime Minister and her Administration. Trade union representatives at the plant have prepared their own assessment and appraisal of the factory's future. I am pleased to say that they have been well received by the senior management of Rank Xerox.

The fact remains that 20 per cent. unemployment looms large in the forest of Dean. When I last raised this issue in the House my hon. Friend the Minister of State, Department of Industry highlighted some of the opportunities that were available for the forest of Dean under section 8 of the Industry Act 1974. Local firms have made applications for aid under the scheme. The most recent one by Watts of Lydney — a great deal of cooperation and assistance was received from the Department of Industry at Bristol—went to Whitehall, where it seemed to become bogged down. Happily, as a result of the debate, I understand that the application has been located in Whitehall and that Watts's plant at Lydney will be visited before too long.

The forest of Dean district council made a valuable contribution to combating unemployment in the district under the Finance Act 1980 by constructing and developing the Forest Vale industrial estate. That is to its credit, as is the fact that it used the 1980 Act, for the estate has been contructed at virtually no cost to local ratepayers. The district council joins me in my concern for the district and together we seek to maintain pressure for the forest of Dean to receive assisted area status.

The area is surrounded by assisted areas. In Ludlow, which is to the north, three Government agencies are putting money into the area. In south Wales, including nearby Cwmbran, there is full assisted area status. Even parts of Monmouth, which is just over the river Wye, are receiving grant aid from this Administration. These areas are seducing potential investors away from the forest of Dean.

As evidence of that I have a letter from Forest of Dean Industrial Investments Limited. Its managing director, Mr. Roger Worgan wrote: One example of this competition involved my own industrial estate, where having sold three acres of land to a London-based chemical company, who proposed to build a two million pound Chemical Farm, creating forty new jobs. They have advised me that they are not now going ahead with the development, as they can obtain generous benefits elsewhere and have instructed me to endeavour to sell the land. I have been told that this Administration will not consider the designation of any more assisted areas during the lifetime of this Parliament. However, the situation in the forest of Dean is changing rapidly and deserves reexamination. I am pleased with the district council's development of the Forest Vale industrial society, but I think that in some respects it could have done more. It is a pity that it did not apply to have an enterprise zone established in the area. I have been waiting since 24 March for a reply to my letter suggesting that together we should apply to have a free port established at Lydney if the Government's current experiments with free ports are successful.

My greatest disappointment is over the community programme. This programme was launched in October of last year, and to try to promote it locally, for it is undoubtedly a useful scheme, I had a large meeting in Lydney on 14 March, to which I invited representatives of the Forest of Dean district council. Sadly, my efforts were pooh-poohed by the local authority, which told me that it was organising its own scheme, that it was to be the managing agent under the community programme, and that it had earmarked 200 jobs that it was to set up in the district. Now, eight months later, despite promotion from the Gloucester jobcentre, the council has not initiated one job under the community programme.

The Socialists on this Socialist-dominated council lose no opportunity to point the finger at me and at this Administration, seeking to lay all the blame for the unemployment in the district at our door. When it had the opportunity to do something, it did the minimum. Recently, one councillor suggested that Ministers should give the council £1 million to invest in this district. Had the council initiated 250 jobs under the community programme, it could have had £1 million a year from this Administration to spend in the district. However, it has sat back and done nothing. I hope that my words will be heard on that council and that this will help it to concentrate its mind on this much acclaimed and excellent programme. The Manpower Services Commission is waiting to hear from the council.

If the forest of Dean had assisted area status, access to European funds would be available. Sir James Scott-Hopkins, our local European Member of Parliament, is willing to help in our application. Is there not some way in which access to these European funds could be given, even if we have to avoid domestic funding? Furthermore, this Administration has recently increased housing improvement grants. Would it now be possible to have funds for the regeneration of industry in selected areas, such as the forest of Dean?

Recently, the Association of Metropolitan Authorities published a report on industrial regeneration, suggesting that local authorities be allowed to raise their own funds for regeneration, which are currently limited to 2p on the rates. Perhaps, if the facility were there, the forest of Dean council could raise money through the local rate system, if we could lift that restriction.

I have seen the brochure "How to Make Your Business Grow" prepared by my hon. Friend's Department, and I find it excellent and informative, but it assumes that there is a business up and running, which can then be made to grow. The trouble in the forest of Dean is that our new businesses are going elsewhere. Will my hon. Friend take this opportunity to highlight some of the options that are now available to the forest of Dean as he sees them, and, perhaps, to consider the possibility of having a royal forest of Dean development agency?

I end as I began. In the forest of Dean we face a serious unemployment problem with a forecast of 20 per cent. unemployment. Assisted areas surround us. We are relatively isolated. The council has helped where it has seen fit, but more needs to be done. The status of the district needs to be reviewed again. May I have a commitment from my hon. Friend that his Department, all things being equal after 9 June, will join me in reexamining the case of the royal forest of Dean in detail to see what can be done specifically to help in that area?

10.34 pm
The Under-Secretary of State for Industry (Mr. John MacGregor)

I congratulate my hon. Friend the Member for Gloucestershire, West (Mr. Marland) on gaining, in the closing stages of this Parliament, the opportunity once again to debate the problems of his constituency. It shows the care and intensity with which he pursues the interests of his constituents, and his determination in pressing the claims of the forest of Dean, especially for assisted area status. He has brought delegations to see my colleagues in the Department of Industry, and he has written many letters on the subject. The House debated the subject at his instigation as recently as December.

Recently, I visited my hon. Friend's constituency and I am aware of the impact of the closure of certain large companies and, in some cases, of the redundancies made in large companies, especially Rank Xerox. As my hon. Friend said, in recent years the business of Rank Xerox has been subject to strong competition, especially at the low end of the copier market. That is life today in a highly competitive world and that will not go away. Added to that, pressures are placed on the company via Xerox in the United States, reduced profits, 40 per cent. excess capacity in the market and a trend towards automating the manufacturing processes. Therefore, the manpower required for the company's United Kingdom manufacturing operations has been and is being considerably reduced. That is the reality of the market place. The company faces commercial pressures, and the long-term future of the forest of Dean will be assured not by resisting such pressures, but rather by assisting the company in its attempt to remain competitive and to build itself up.

A more important factor is the need to build up the restructuring of the local economy and small firms must play an important part in that. I was delighted to hear what my hon. Friend said about the efforts of Rank Xerox and its chairman in recognising its responsibilities and in doing what it can to help small and new firms to grow in the area. My hon. Friend will know of the enterprise agencies in which the large companies play a part. I am sure that that is an important way forward for my hon. Friend's constituency.

My hon. Friend will recall that we visited the Contherm company in his constituency. There we saw an excellent example of two young ex-employees of the firm Duramin, which had previously been in that area, building up their business. I was delighted to see what they were doing. Much of that type of activity is important for the future of the area.

I wish to comment on Watts of Lydney and its application for selective financial assistance. Applications for selective financial assistance under section 8 of the Industrial Development Act 1982 are treated as commercially confidential. Therefore, I am unable to go into details in the House. Nevertheless, officials will be visiting the company during the course of next week to discuss the proposed project in detail. The Government will ensure that the application is speedily processed.

My hon. Friend can be assured that the Government are aware of the position in his constituency. As with other parts of the country, my hon. Friend has brought the needs of the forest of Dean to the attention of the Government and, as with other regions, it has its own reasons for suggesting a change in its position.

I shall reiterate the Government's policy on regional assistance, and why we have concluded that the forest of Dean cannot be given assisted area status today. When the Conservative party came to office in 1979, it looked for methods by which regional policy would be made more effective. Essentially, regional policy is now more selective. Assisted areas are now restricted to the areas of greatest need. This has gone a long way to removing much of the competition from assisted areas for new investment that non-assisted areas, such as the forest of Dean, have often regarded as unfair. Therefore, by reducing regional assistance, the Government have reduced the disadvantages faced by my hon. Friend's constituency. I shall come later to the point about the boundaries.

Under the Industrial Development Act 1982 we must have regard to certain criteria in designating areas. Unemployment is a major factor, although not the only factor, both within a particular travel-to-work area and relative to other travel-to-work areas. As my hon. Friend knows, the forest of Dean comprises the Cinderford travel-to-work area and a small part of the Gloucester travel-to-work area.

I shall have to give the March figures, because I am trying to make a comparison with the national figures, and I am not yet able to do that with the April figures. In March this year the unemployment rates were 14.6 per cent. for Cinderford and 10.2 per cent. for the Gloucester travel-to-work area, compared with 13.5 per cent. for Great Britain as a whole and the intermediate area average of 15.6 per cent. At that stage, even the Cinderford travel-to-work area was below the intermediate area average. My hon. Friend has referred to projected estimates, but we have been unable to take them into account in making these analyses, because we have found from experience that they often turn out to be false. Sometimes, fortunately, the expected redundancies do not occur, there is not the same number of people looking for new jobs, or other jobs take up the slack. Therefore projected estimates are unreliable and we have to rely on the actual unemployment figures.

Therefore, I should make it clear that the unemployment level in the Cinderford travel-to-work area is below the average in intermediate areas. My hon. Friend will know that other parts of the country, such as the west Midlands, have higher unemployment rates and much higher numbers of unemployed, but do not have assisted area status. Indeed, according to the March figures there are 47 non-assisted areas with higher rates of unemployment than Cinderford. Many have much higher numbers of unemployed. That is part of the problem. However, I am aware that the forest of Dean is adjacent to assisted areas across the border, and that is a particularly difficult problem.

It is inevitable that, whenever decisions are made in such a case, there will be disappointments elsewhere. There is often a problem about where the line is drawn, and we have spent much time on that aspect. My hon. Friend can be assured that the present boundaries were drawn only after the greatest and most careful consideration of all the factors. However, I take his point, and we shall keep a careful watch on the situation.

Mention of the west Midlands brings me to another important point. It is not possible to change the status of one travel-to-work area in isolation, and that is what makes the whole process so difficult. The question of assisted area status has to be put in a regional and national context. When unemployment is historically high—for many other reasons, which have often been debated in the House — and when other parts of the country are suffering unemployment rates that are higher than those of Cinderford, but are still not assisted areas, one has to look at what I have often called the domino effect.

To grant assisted area status to Cinderford, and especially to Gloucester, would give rise to claims for equal treatment from those other areas with higher levels of unemployment and higher rates, as well as to claims from other areas from which assisted area status has been withdrawn and to claims from those that have not had that status but feel that their claims may now be made on a comparative basis. It may be that by granting one area assisted area status, its relative position is not improved and is even worsened because of the domino effect. That point must be considered carefully in the case of Cinderford, especially as many of the west midlands areas are near it. Therefore, I hope that my hon. Friend will accept that the matter is difficult and that we have been giving it great attention.

I shall comment briefly on regional policy for the future. The Government are fully committed to promoting industrial and economic development in the regions. Officials have completed the first stage of a review to examine the working of current regional economic policies and to identify ways in which regional aid might be made more effective. It is right, as my hon. Friend said, that we have said that there will be no further changes during the lifetime of this Parliament. That must be right in the interests of stability and continuity. Indeed, my hon. Friend will recognise that this Parliament does not have much longer to go. However, it is not possible to say tonight what course further work might take, or to speculate tonight on what changes might be needed. We shall continue to keep a close watch on the position in all parts of the country.

In response to my hon. Friend's last plea, if I remain in my present position and depending on how the situation in the forest of Dean develops, I shall be willing to be kept in the picture by my hon. Friend and certainly to meet him after the election to discuss it. I am sure that my successor, if he is a Conservative successor, will be willing to do so as well.

I share my hon. Friend's concern about his constituents who are unemployed now or are about to be made redundant. I shall therefore briefly outline what is currently being done. In the Cinderford and Gloucester travel-to-work areas, 148 people are benefiting from the temporary short-time working compensation scheme; 77 people are benefiting from the job release scheme; 156 applications were approved in 1982–83 for the young workers scheme; and at 31 March, 60 people had joined schemes under the community enterprise programme. My hon. Friend referred to the community programme. I know that there are now three projects in his constituency that are taking advantage of the facilities under the community programme. I listened to what my hon. Friend said about what his local authority should do about this. I admire my hon. Friend's initiative and effort, and I hope that the message he put over tonight will be taken fully on board because, as he has made clear, the money is here now.

The youth opportunities programme has done a great deal to give hundreds of thousands of youngsters a chance to learn about work at first hand. It has improved their chances of getting a job and the youngsters taking part have thought very highly of it. About 800 young people entered YOP places between April 1982 and March 1983 in the forest of Dean. By the end of March 1983, only five young people in the 1982 Christmas undertaking group had not received an offer of training under the programme.

The youth training scheme, which will become fully operational in September, is designed to go even further. It will provide high quality training on a year-long programme, giving youngsters the basic skills they need to compete in the tight labour market of today and on which further skill training can be based. It is about developing the type of flexible well motivated work force that industry needs to become competitive.

In the forest of Dean the Manpower Services Commission is aiming to generate under this Government about 750 places under the new scheme in the current financial year, 90 of which have already been approved, with about 320 places in the pipeline. Gloucestershire county council will be playing a major role in the scheme in two main ways. It will provide a 200-place county-wide managing agency covering its own employees and a 800-place county-wide managing agency based at local colleges of further education, using small firms for on-the-job training. Of those places, 160 will be in the forest of Dean area. In addition, there will be a 120-place county-wide scheme at Hartbury college providing training in agricultural skills, and a 90-place college-based course has been approved under mode B. The majority of employers in the forest of Dean are, of course, small businesses and the county council therefore has a key role as a coordinating managing agent. Large employers in the area have also been active in training. Smith's Industries is involved in a consortium that is developing proposals for an information technology centre in Gloucester from which youngsters in the forest of Dean will be able to benefit.

I have often felt that many local areas overestimate the impact of regional policy and so fail to appreciate sufficiently not only the MSC schemes but the many other schemes available from my Department. My hon. Friend will be aware that alternative industrial support is available to firms in the forest of Dean. Aid is available under section 8 of the Industrial Development Act 1982 to assist new investment in the national interest that would otherwise not take place. Since May 1979, 34 projects in the Cinderford and Gloucester travel-to-work areas have been given £0.7 million on total project costs of £2.9 million. Under the Government's support for innovation programme a number of schemes provide assistance to encourage the application of new technologies. These schemes are available to firms in my hon. Friend's constituency. Although I cannot give him a breakdown, it is certainly important to publicise them and to make firms in his area fully aware of them. It is often forgotten that about 60 per cent. of all firms obtaining such assistance are small firms themselves, which are so important to his area.

As my hon. Friend will know, the Government have introduced a vast number of measures to help small firms, including the loan guarantee scheme, the small engineering firms investment scheme and various services such as the small firms service and the small firms technical inquiry service. All those, and many other measures, are available to small firms in the forest of Dean.

My hon. Friend referred to the booklet "How to Make Your Business Grow". I hope that he will ensure that the widest possible circulation is given to the booklet in his area because I do not believe that enough small firms have taken full advantage of all that is available. He referred to European assistance. A recent scheme under the new Community instrument now enables loans at competitive interest rates to be available in the non-assisted areas such as the forest of Dean. The change we made under the Development of Tourism Act 1969 make tourism grants available in the forest of Dean.

I assure my hon. Friend again that, despite our difficulties in granting assisted area status, we appreciate the problems in his constituency, and I repeat what I have said about alternative means for support to industry. I know that he is doing his utmost to promote new investment throughout the area. Applications for assistance to suitable projects in the forest of Dean are most welcome and will be looked at sympathetically, within the rules for the various schemes. Finally, I am sufficiently optimistic about the future to say here and now that I, or my Conservative successor, will agree to see him after the election, together with a deputation from the forest of Dean to discuss the problems of the area.

Question put and agreed to.

Adjourned accordingly at nine minutes to Eleven o' clock.