HC Deb 01 August 1984 vol 65 cc351-7

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

Mr. Speaker

We move on to the first of the Adjournment debates. As we have lost 35 minutes of the time available, I appeal to hon. Members to ensure that each of the subjects is debated for no more than half an hour.

11.15 am
Mr. Paul Marland (Gloucestershire, West)

The purpose of this Adjournment debate, for which I am most grateful, is to remind my hon. Friend the Minister of the need for his urgent assistance to the Royal Forest of Dean. This is not the first time that I have mentioned the needs of the district to my hon. Friend, as we have exchanged letters and have met privately, and he has answered parliamentary questions. I have been successful in having a previous Adjournment debate and have led several delegations to various Departments designed to highlight the needs of the district. Our most recent delegation was on 17 May, when I accompanied representatives of the Forest of Dean district council on a visit to the Minister. Best of all, my hon. Friend has visited the area and seen our problems at first hand.

The timing of the debate is very appropriate. With new applications being considered in the autumn, I am anxious to leave an impression of the Forest of Dean embedded in the mind of my hon. Friend.

Since 1980, I and others, especially the Forest of Dean district council, have been warning of the likely steep rise in unemployment in the district, as large employers run down their work forces and, in some cases, leave the area. In this case, there is no satisfaction in having been proved right.

To highlight the difficulties, I shall compare the level of United Kingdom unemployment at 12.4 per cent. with the general rate of unemployment in Gloucestershire of 9.4 per cent. In the Forest of Dean the rate of unemployment was 16.6 per cent. in January. Happily, it has fallen to 15 per cent. but is still substantially above the national average.

As my hon. Friend will remember, the Forest of Dean is geographically isolated, lying between the rivers Wye and Severn. The communications are not the best in the country. Although the area is isolated, in many ways it is too close to development areas, especially those to the west.

In the past, the Forest of Dean was heavily dependent on single industries. Traditionally, it was a mining area, and more recently the mighty Rank Xerox has employed many local people. In its heyday it employed 5,000 people and paid very good wages. The company's patents ran out and it was subjected to competition from areas of low-cost production elsewhere in the world. The problem of new methods of production and the fact that Rank Xerox had to face outside competition led to considerable reorganisation of the company, which has reduced its work force to about 1,000.

The point of referring to Rank Xerox and the decrease in local opportunities for employment is that, with the exception of Mitcheldean, there are no disused industrial buildings in which to base new industry. Other manufacturers operate in the district, but they have always been subsidiary operations of larger firms elsewhere. When their fortunes became difficult, the subsidiary companies were the first to suffer.

The background is one of high unemployment in the district, with heavy dependence on a single industry. There is no heritage of old buildings. The area is geographically isolated and is too close for comfort, especially in the west, to special development areas.

The Minister could rightly ask what we are doing to help ourselves. What is being done locally to help? Here, I must give credit to the Forest of Dean district council, which has shown ingenuity and determination to a degree which is not often associated with local authorities. The council has put forward ideas and has got something done. In Cinderford the council has developed the Forest Vale industrial estate, built on 104 acres of derelict land and old mine workings. The council installed the infrastructure and persuaded COSIRA to join it in the project and build some small factories. The council—it is a credit to the treasurer—spotted the benefits of section 75 of the Finance Act 1980 and constructed factories without putting the whole burden on the ratepayers. Furthermore, it was able to encourage private developers to build factories on the site, and these are now in production.

All in all, the council has now achieved 50 units of production on the Forest Vale industrial estate. That reflects great credit on the council. That achievement should not be underestimated, especially in an area which, in many respects, is not favoured by other investors. I pay a warm tribute to the Forest of Dean district council and its officers for what they have done. It would be no secret to them or probably to you, Mr. Speaker, that the Forest of Dean district council and I do not always see eye to eye on every issue, but credit should be given where credit is due. Now that the Forest Vale industrial estate is up and running, the council is looking at a second site in Coleford. Without wanting to whinge, I believe that the latest moratorium on local council spending will make the planning of that site uncertain.

Others have been active in the district, too. Rank Xerox has demonstrated a massive commitment to the local people by spending £500,000 of its own money in developing its now underused workshops and warehouses so that other people have the opportunity to work on that site. It has revamped some of its large warehouses for suitable tenants and, with the £500,000, has developed 50 fully serviced workshops, which have been a great success. Some 200 inquiries have been received and 112 people have put in firm applications. My hon. Friend will remember that, because he visited the Rank Xerox site a few weeks ago, when I was happy to accompany him.

I should like to draw attention to the commitment that Rank Xerox has shown to the local people in the district, because it is enormously to its credit that it has done so much. It continues to work in the best interests of the district and to do everything possible to help the people there. Its generosity is highlighted by the appalling contrast with a company that used to employ 750 people in Lydney, known as the London Rubber Company. It wanted to reorganise its efforts somewhere else in the country and, without a backward glance, pulled out and left those 750 people high and dry. Despite approaches by the Forest of Dean district council and myself, the senior management of the London Rubber Company would have nothing to do with us. That shows what a marvellous thing Rank Xerox has done.

However, there is good news in addition to what Rank Xerox has done. Some other companies in the district are expanding. They create a modest number of jobs, but the fact is that they are committed to the district and are expanding. Watts, a family-run company, which for generations has operated from its own factory in Lydney, is spending about £1.5 million on developing a new tyre-making process, which will be based in Lydney.

Sykes Pumps, which has a factory in Coleford, recently constructed an extension, which was opened by my right hon. Friend the Secretary of State for Employment. Engleharts, another company of which we in the Forest of Dean are proud, operates in Cinderford, breaking down old computers to extract the precious metals and resell them. It has expanded its operation and decided to stay in the Foreist of Dean. The last company that I should like to mention, although there are others, is Temco, a small company wholly owned by British Insulated Callender's Cables. It is a subsidiary of that company. It is a wire extruding company, which has expanded its operation from Lydbrook on the banks of the river Wye and taken larger premises in Cinderford.

All those companies create a few extra jobs, but one has to work hard while not getting far. The chairman of the Forest of Dean district council, Mr. Arthur Cooper, and I had a joint project in sending out a brochure published by my hon. Friend's Department, entitled "How to make your business grow". We distributed 5,000 copies to all the commercial ratepayers in the district. We also visited banks, solicitors and accountants, asking for their cooperation and help in encouraging people to start up or to expand businesses in the area. I am sure that my hon. Friend would approve of that approach. I am pleased to say that we have the wholehearted support of all the people whom we visited.

The Gloucestershire Enterprise Agency, which my hon. Friend the Minister has visited, also does its best to help in the district, so there is a great deal of local effort. I should not like anyone to think that I was asking the Government for financial help if local people were not determined to do everything possible to capitalise on that assistance. A great deal of effort has already been made and will continue to be made locally.

There was some official recognition of our problems recently when the Development Commission designated the Forest of Dean a rural development area. That was a great shot in the arm for all those campaigning for extra help in the district as well as for local business men. Nevertheless, too many businesses outside which could set up in the district are looking elsewhere, especially to our near neighbours in the west, and too many businesses inside the district are thinking of setting up outside because they cannot obtain Government assistance. I personally know of three business men who would like to set up in the district but are seriously considering going elsewhere because no Government assistance is available in the district.

The proportion of applications to vacancies is now twice the regional average because there simply are not enough jobs in the district. Indeed, the Forest of Dean has a higher rate of unemployment than 53 of the present 135 assisted areas. I ask my hon. Friend the Minister to remember that when he considers areas for assistance in the autumn. I hope that he will also bear in mind the following points.

In the past, we have been over-dependent on single industries. There are no old buildings which could be suitably revamped for the industries of today and tomorrow. The district is geographically isolated and its proximity to assisted areas makes it difficult to attract new industry or to encourage the expansion of existing industries. The proportion of the population out of work is now 15 per cent. We have tried very hard locally to generate more jobs and to create more industry in the area and if the Government see their way to give us the assistance that we seek we shall do all that we can to build on that help.

I ask the Government, therefore, to consider giving the district assisted area status. This would enable newcomers and existing businesses to construct the extra buildings so sorely needed. It would also give the district access to EEC development funds. We already have access to the social funds, but the development funds are very different. Assistance from the Government will allow us to win more business and more jobs for the people of the Forest of Dean.

As Parliament breaks for the summer, I wish to leave my hon. Friend the Minister with a deep impression of the Forest of Dean so that when he and his colleagues consider new applications for assistance he will remember with understanding and sympathy the drive and determination that he has heard about and seen at first hand in the Royal Forest of Dean and will do something to help us.

11.20 am
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier)

I am grateful to my hon. Friend the Member for Gloucestershire, West (Mr. Marland) for the opportunity once again to debate the problems of his constituency, particularly those of the Forest of Dean. I know my hon. Friend will not regard me as flippant if I say that were assisted area status designated on the diligence and interest shown by its representative in this House, the Forest of Dean would qualify for immediate assisted area status at the highest level. I know his constituents will appreciate the assiduousness with which he has pressed their case over the last five years, and I congratulate him. Indeed, it was only eight weeks ago that a delegation from the Forest of Dean district council and the Gloucestershire county council led by my hon. Friend came to see me to press their case still further. I can assure my hon. Friend, therefore, that I am fully aware of the problems of the area, but, as he will know, I am not able now to give him the answer he would like on the status of the Forest of Dean.

The Government are committed to maintaining an effective regional policy to ease the change in areas which have been dependent on the declining industries and to encourage new business in those areas. To this end, as my hon. Friend is aware, the Government issued a White Paper entitled "Regional Industrial Development" in December 1983, which set out our approach to the problem of regional assistance.

Since 1972, when the present structure of regional industrial incentives was introduced, there have been major changes in our environment. We have become a member of the European Community and, in common with other countries, have experienced a period of recession and inflation following the oil price rise. Unemployment is high throughout the country as a whole, not only in assisted areas, and thus to ensure an effective regional policy the Government must look at the problem on a national basis. As my hon. Friend knows, views on the White Paper were invited before the deadline of 31 May. We received 506 submissions by that deadline, and a further 36 subsequently. Many of these sought special status. It was as a result of that invitation that I received the delegation from the Forest of Dean to which I referred earlier.

The problems of the Forest of Dean, which were explained to me with great skill and knowledge by my hon. Friend, appear to stem from a number of sources. Perhaps most significantly, major manufacturers, especially, as he said, Rank Xerox, have, for commercial reasons, cut down their work force substantially. There is still a continued dependence on a few large firms for employment and the area has suffered from a continuing loss of jobs and a consequent rise in the unemployment rate.

Rank Xerox is and has been for many years by far the largest employer in the Forest of Dean. During the company's expansion at Mitcheldean and Lydney between 1963 and 1974 employment increased to a peak of 4,750 and apart from minor fluctuations remained above 4,000 until 1980. Since then, as part of a major restructuring of its operations, a series of large-scale redundancies, including the closure of the Lydney factory in 1982, have reduced the work force. In April 1983, when employment was 2,200, Rank Xerox announced long-term plans for operations in the forest involving a reduction in the work force to 1,000 by the end of 1984. This remains the company plan. The company is, however, conscious, as my hon. Friend said, of the impact of that reduction on the local community and has taken a number of measures. My hon. Friend referred to a massive commitment on its part. He was absolutely right, and I have had the benefit of seeing that at first hand.

These measures include paying two to three times the statutory rate of redundancy pay and providing exceptionally good, index-linked pensions to those retiring early; providing retraining and guidance for redundant workers, including financing special courses at the Gloucestershire college of advanced technology; donating part of the surplus buildings at Mitcheldean for small business units—I had the pleasure of visiting the Mitcheldean site last November to see at first hand the more attractive old brewery buildings which were to be retained and adapted to provide small units for leasing; setting up a steering group, with representatives from the county and district councils, to look into ways of attracting new industry into the area and to market the remaining surplus buildings at Cinderford; and setting up, in co-operation with the county council and other local businesses, the Gloucestershire Enterprise Agency and providing both the director and secretary of the agency. My hon. Friend said that it reflected great credit on the company, and I agree completely. I was most impressed when I visited my hon. Friend's constituency.

The agency was set up in October 1982 and was opened officially by the Duke of Gloucester on 24 November 1982. Its establishment resulted from a joint initiative by the county council and Business in the Community, but it also has the support of 20 major companies in the area, including Rank Xerox and the Dowty group. It operates from shop front premises in Gloucester and has a remit to cover the whole county. It has had most influence to date in the city, where work includes the Gloucester enterprise workshops.

In the first year of operation, the agency handled more than 2,000 inquiries and undertook 380 business reviews. It claims credit for assisting the setting up of an average of one new business a week. Although until now it has concentrated on providing advice, the agency has also run start-up courses and seminars on marketing and finance. I am glad to say that it retains relationships with the small firms service, for which I am responsible, and is an approved agency under the Finance Act 1982.

I am also aware that other major closures have affected the area, but not all that is happening in the area should cause gloom and despondency. Forest of Dean district council has been active in promoting industrial development, and I pay tribute to it. A first unit of 12,000 sq ft built by the district council was taken by Engelhard Industries, precious metal refiners, which has purchased a further 10 acres of adjoining land and has planning approval for expansion. A second set of seven units from 600 sq ft to 2,400 sq ft totalling 10,000 sq ft, have all been let.

The district council is considering proposals for further development, including schemes in partnership with private developers. Gloucestershire county council has given special attention to the Forest of Dean as the major employment problem area in the county, which it is, and planning proposals, including road improvements, are aimed at assisting the local economy.

My hon. Friend mentioned Temco, which has been expanding production of nickel-plated copper wire and is reaching the limits of its present site. A further site is required, which it is hoped will be in the Forest of Dean. Formwood, which supplies the open cell ceiling market, has completed a £1.7 million expansion and increased employment. During the past two years company employment has increased from 120 to 185.

As well as the self-help which the district council and firms within the Forest of Dean are providing themselves, I must remind my hon. Friend of the alternative industrial support available to firms in the forest. They take the form of aid under section 8 of the Industrial Development Act 1982. Between May 1979 and June 1984, 51 projects in the Cinderford and Gloucester travel-to-work areas have been offered £1,700,000 on project costs of almost £4 million, and I reassure my hon. Friend that any projects put forward for possible assistance under section 8 of the Act will be given most careful consideration by me and my colleagues. The Government can also help by providing counselling assistance through the Department of Trade and Industry's small firms service for which I am responsible, and which is based in Bristol. There are also schemes under the Support for Innovation package to assist technological development.

I am aware that my hon. Friend is a constant campaigner for better road communications to the area. The need for good road communications in the Forest of Dean is recognised. The A48 trunk road from Gloucester forms the principal link, but when considered from a national viewpoint this route is now of little strategic importance following the completion of the M5 and M4 motorways and the Severn bridge. Any improvements to it in consequence can attract, at best, only a low priority and I understand that there is little prospect of any such schemes finding a place in the national trunk roads programme for the foreseeable future.

In conclusion, therefore, I can say to my hon. Friend, "Yes, we are fully aware of the current problems of the Cinderford travel-to-work area and in particular the Forest of Dean," and, "Yes, we will take full account of the submissions made by him, the Forest of Dean district council, the Gloucestershire county council and the many local firms which have written in support of them," but "No, I cannot give him an answer about the future assisted area status of the forest at present."

My colleagues in the Department of Emplpoyment have now completed their review of the travel-to-work area boundaries, and this review, together with the points raised in the submissions on the regional industrial development White Paper, mean that an announcement on the new assisted area map will be made in the autumn. It would be wrong, therefore, to pre-empt any decision by isolating one particular geographical area for an immediate change in assisted area status. In the meantime, I can assure my hon. Friend that my Department is always willing to assist wherever possible any companies in his constituency which make application under the various schemes mentioned, and I thank him once again for the opportunity to debate the matter.