HC Deb 31 January 1984 vol 53 cc237-44

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

10.23 pm
Mr. Jack Dormand (Easington)

My hon. Friends the Members for Sedgefield (Mr. Blair) and for Bishop Auckland (Mr. Foster) will probably try to catch your eye, Mr. Speaker and I understand that the Minister has no objection. We will not overrun our time.

No part of the country has suffered more at the hands of the Government than Durham. When the Labour Government went out of office in 1979 male unemployment and total unemployment were 7.9 and 6.7 per cent. respectively. At the end of 1983 the relevant figures were 19.2 and 16.2 per cent. As in other parts of the country, youth unemployment is horrifying. At the end of January 1984 there were 2,753 registrants — that figure excludes people on the youth training scheme—and 17 registered vacancies. If that statistic does not shake the Government out of their complacency, nothing will.

There is a link in County Durham between unemployment and migration from the county. Within one year of the 1981 census there was a drop of 3,000 in the population and a further drop of 13,000 is expected by 1991. As a Durham man, I deplore the fact that so many of our people are being driven out of the area. That is especially depressing for me as most of the migration is from my constituency.

I need not remind the Minister that County Durham relies heavily on the coal industry for employment. Bearing in mind the social and economic circumstances in the county, I should have thought that the Government would be only too pleased to give the industry every possible support. However, they can hardly wait to close uneconomic pits. That is a cause of great uncertainty and anxiety in our mining communities. There is the strongest possible social and economic case for retaining pits while the present difficult circumstances exist.

I said that there was an economic case for keeping the pits open. Some researchers, including those of the National Union of Mineworkers, have produced figures which I quoted the last time I spoke on the coal industry and which suggest that the cost of redundancy and social security payments is greater than that involved in keeping the pits open. In present circumstances, the onus is on the Government to refute that submission. We are not talking merely about the effect on miners and their families; we are discussing the effects on tradesmen and the entire fabric of mining communities.

We also want the newer industries. The most successful agencies in the county for attracting them are Peterlee and Aycliffe development corporations, which are associated with those two new towns. They bring in well over 50 per cent. of the county's new jobs of all types. When I asked a question about unemployment last week, the Secretary of State for Employment paid tribute to Peterlee development corporation's efforts in attracting employment. However, what does the Secretary of State for the Environment propose to do about those corporations? It sounds impossible, but he proposes to abolish them next year. Any rational Government would be encouraging their expertise, expanding them and providing them with additional resources, but not this Government. They are proposing to cut off the lifeline for a significant part of County Durham. The Minister concerned has promised to think again on the matter. I hope that that is not an empty gesture. I beg the Minister to add to the pressure on the Department of the Environment to keep the new towns in existence for at least five years. That is what we need if we are to reduce unemployment in County Durham.

The Labour party has expressed its utter opposition to rate-capping. I do not wish to repeat the case against it. To apply that policy to County Durham is sheer lunacy. The instructions which our local authorities have received will mean that they will not be able to maintain present levels of services, let alone make much-needed improvements. Housing and education—two extremely important services—will be especially badly hit. Those services should receive positive discrimination as compensation for the deprivation which our county has suffered under the Government.

It would be some consultation if we could assume that the Government's recently proposed regional policy would benefit our county, but all the evidence, not least the proposal that aid will be selective rather than automatic, as at present, suggests otherwise. If the Minister does not accept my view, perhaps he will listen to the chairman of the northern Confederation of British Industry, who only last week said that in future we will be unable to stop the rot in places where we did before with regional development grants. He went on to say that north-east firms could be prevented from modernising because of cuts in the regional grants, and in addition that the proposals could force more branch firms with headquarters outside the region to cut back drastically on expanding their northern operations.

What could be more damning than those comments by the head of the business community in the northern region? The regional policies will produce worse results than those foreseen by him, but more important is the fact that County Durham is more vulnerable than anywhere else to such half-baked proposals. I urge the Government to have discussions with the county to assess the effects which such policies will have on an area such as ours, otherwise the changes could be very serious.

In spite of all their difficulties, the people of Durham refuse to be disheartened by the lack of interest shown by the Government. They are responsible and fair, work hard and believe in self-help — no begging bowls for the people of Durham. I hope that the Government will heed the pleas made in the debate, so that there will be some hope for the future.

10.32 pm
Mr. Derek Foster (Bishop Auckland)

I congratulate my hon. Friend the Member for Easington (Mr. Dormand) on initiating the debate. I am glad to be able to take part.

We dwell upon the problem of unemployment because it underpins most of the other social problems in a county such as Durham. There has been a net loss of 23,000 jobs since 1979 in the county, but one statistic is even more revealing. There was a net loss of 6,000 jobs in the service sector between 1979 and 1982. If we are to believe the Government, it is to the service sector that we must look for the jobs of the future, yet in county Durham there was a net loss of 6,000 jobs in those three years. I hope that the Minister will comment on that.

You are familiar with the district of Wear valley, Mr. Deputy Speaker. Some 25 per cent. of all the males are out of work in that district, and 14 per cent. of all manufacturing jobs have disappeared since 1979. That is the highest loss in the whole of the county. In some estates in Bishop Auckland, which is in the Wear valley district council, between one half and three quarters of all the males are without work. That is a tragedy of monumental proportions.

In Wear valley, 75 per cent. of the council tenants receive housing benefit. If that is not an illustrative figure of grave deprivation and great need, I wonder what is. In some families in those estates, the mother, father and all the teenage children are looking for work. We know very well that within the county of Durham the prospect of those who go through the youth training scheme is that as soon as they are finished they are back on the unemployment register. Those young people have no hope. They have nothing to look forward to. Is it any wonder that they drift into crime and even suicide? Such is their plight.

Yet look at what the Government are doing for the county of Durham. Even in Wear valley, and with 25 per cent. of males out of work, one sees that they have refused any special development area status. For the second year running, there has been no development on any of the major industrial estates in Wear valley district council.

In my constituency, and four miles from Bishop Auckland, is Shildon. We had a big debate about Shildon. I shall not go over that ground again. Some 2,600 jobs are disappearing in a town of only 14,000 —1,700 have already disappeared, and the rest are to go before the end of this year. In spite of all those problems, the Government have set their face against continuing the Aycliffe corporation, which is on the doorstep and which has been the most successful job hunting agency in the region.

My hon. Friend mentioned rate capping. In spite of all our human and social problems, we have this dreadful measure inflicted upon us, stopping the local authority responding to those problems in a humane fashion.

10.35 pm
Mr. Tony Blair (Sedgefield)

My hon. Friends have rightly drawn attention to the dreadful situation that exists in County Durham. The tragedy is particularly great, because County Durham has tremendous potential and resources, if only we had the sense to use them. Vacant industrial sites are on offer. Almost 5,000 gross hectares could be used or let to businesses, if they could be developed. Sedgefield district council, for example, took over land vacated by Courtaulds when it left the region and is attempting to let it. There is a research and development centre for high technology industries, set up by Durham university in conjunction with the English Industrial Estates Corporation, in an attempt to provide the technological expertise that we need. We have a work force that is only too willing and able to work. Indeed, no one has suggested that the problems of county Durham arise from any desire on the part of its people not to work. I say "no one", although I believe that a Minister suggested as much, but it is quite untrue. So the tragedy is all the greater because of the resources that are available in the region.

Since 1979, 23,000 jobs were lost, and about 6,000 jobs were lost in 1982. In parts of my constituency, male unemployment is about 40 per cent. What can we do in the face of that structural decline? Surely, the only sensible thing to do is to say, "Let's harness the region's resources in a sensible structural plan." That is not a new concept. Perhaps I can quote Lord Hailsham, who once took an interest in these matters.

Mr. Douglas Hogg (Grantham)

He still does.

Mr. Blair

I am glad to know that he still does, and it is a pity that some Conservative Members do not. He said that one of the problems was that there was no one authority with money to spend, local or national, which could view the problems of the region as a whole. Moreover, there was no adequate focal point at which effort could be co-ordinated regionally on the spot". Lord Hailsham saw his task then as promoting not only the well-being of the north-east, but regional planning throughout the country. In case that is thought an outdated approach, let me read also what the Regional Studies Association wrote recently. It said that it had clearly identified the increasing number of structural deficiencies which threaten to undermine the region's long-term economic viability. Policy recommendations acknowledged that policies must be long-term, co-ordinated, positive and sensitive, backed up by an effective administrative framework". How very sensible that suggestion is, and how very different from what we hear from the Government.

The only policy paper that we have had recently on this question is the Government's White Paper on regional policy. It offers no hope whatever to people in our region, but worse than that, it is a cowardly paper, because it implies that there is no need for regional policy, although it does not have the guts to say so.

How is the problem to be circumvented? The answer that was given by Conservative Members, both at the 1979 and the 1983 elections, was that individual private initiative would somehow regenerate our region. That has signally failed to happen. The only alternative—and it is an alternative based on common sense and not on dogma — is to use, in a sensible and planned way, the resources that we all know are there. Why do we still have to ask for a northern development agency? What possible objection could there be to a funded body, regionally based, that was able to take a long-term and coherent view of the region's problems and to plan ahead?

A young man came to see me at my surgery in Ferryhill the other day. His problem was all too typical of County Durham at present. He is not over-ambitious. He does not want a Rolls-Royce, or a yearly holiday in the Bahamas. He wants to be able to support his family, and to have the dignity and self-respect that would come from being in work and supporting them. The role of a sensible, caring and sensitive Government would be to allow him that opportunity. The failure of the present Government is that they have deprived him of it.

The paper produced by Durham county council describes the tragedy that besets our region. It is up to the Government to do something about it.

10.46 pm
The Under-Secretary of State for Employment (Mr. Alan Clark)

I am glad to have the opportunity to reply on behalf of the Government. I congratulate the hon. Member for Easington (Mr. Dormand) on his good fortune in the ballot. The Government know him as a skilful and persuasive interrogator on behalf of his constituents. I have listened with great interest to the points that he and his hon. Friends have made, and I shall attempt to answer as many of them as possible in the time we have left.

I was in the north-east only last week for a meeting of the Newcastle-Gateshead inner city partnership committee. I was able to learn on the spot something about local social and economic conditions and also to appreciate the concerned and constructive attitude of so many who are involved. The whole of the north-east, including Durham, has been going through a difficult time in recent years. However, when the hon. Member for Easington said that the region had suffered at the hands of the present Government, he was—even allowing for the hyperbole which must be expected in party political exchanges at this time of night — deliberately ignoring the fundamental fact, which he later admitted, that it is an area which has relied historically on heavy industry such as coal mining, iron and steel, the railways and associated engineering. The decline of those industries, together with the effect of the recession, has had serious social and economic consequences.

The hon. Gentleman referred to the closure of loss-making pits. He argued that it would be more economical to keep them open, if the savings in benefits and redundancy payments were taken into account. That is an argument that we have heard before, but I will see whether some data can be made available to the hon. Gentleman. It is the duty of those who make decisions to weigh up all the factors involved. I cannot promise, however, that he will be happy with the data or the conclusions.

Although mining and quarrying is still dominant, industry in Durham has become much more diversified, in response to the challenge of changing circumstances and the shift in emphasis. As the hon. Gentleman knows, there is a trend away from heavy engineering to high technology enterprises. In Consett, for example, over 1,700 new jobs have been created since the town's steelworks closed and the figure is expected to rise to over 3,000 over the next two years. A number of impressive high technology projects are involved, including computer firms such as Integrated Micro Products and Brit Pharm, an expanding high technology pharmaceuticals operation.

The clothing industry has also been through a traumatic period and inevitably there have been significant reductions in employment, but the industry now appears to be in a healthy position with profits in a number of Durham-based clothing firms rising encouragingly.

The hon. Gentleman asked about new town corporations. Although that is not the responsibility of the Department of Employment, I am ready to put on record the information that I received about this from the Department of the Environment. I do not know whether it will add to his store of knowledge.

Under the new towns legislation, the corporations are wound up when the new towns have become established as viable communities and no longer need the special support of the corporations. When a corporation is wound up, the relevant new towns will no longer obtain direct aid from the Department of the Environment under the new towns Vote. They also cease to benefit from the corporations' promotional role. However, the wind-up dates are targeted and have not yet been confirmed.

The review of the targeted dates for the north-east, new towns will not be completed until 31 March. Meanwhile, the Department of the Environment has been considering what other bodies might take over the corporations' promotional role.

The fundamental problem that was mentioned in all three speeches is the human tragedy of unemployment. One must admit that conditions remain difficult and that competition is fierce. I am aware that the unemployment rate in Durham and the rest of the country continues to be high. To have 3 million of our people out of work, of whom 38,000 are in the county of Durham, imposes a cruel strain on society and the individuals involved. Unemployment is not just a human tragedy; it is a terrible waste of one of Britain's most precious assets — the skills and abilities of her workers. We all want to see new jobs created as quickly as possible, but the present position has not come about overnight, and, inevitably, it is taking time to solve the problems.

Most people now recognise that a lasting reduction in unemployment depends upon our firms being internationally competitive in cost, prices, quality, design and marketing. Hon. Gentlemen and their constituents will know that the only lasting cure for unemployment is full order books.

The Government's contribution to all this is to create a climate in which customers can be won back and new markets developed. The signs are that we are beginning to succeed. The combination of 3 per cent. growth with low inflation of about 5 per cent. is the best since the early 1960s. Unemployment is levelling and our cost competitiveness in manufacturing has improved by about 20 per cent. since 1981.

The latest CBI survey is encouraging.

Mr. Roland Boyes (Houghton and Washington)

You say that every month.

Mr. Clark

It is not usual to intervene on such occasions, but, on the contrary, CBI surveys tend to be rather pessimistic and carping. This is the first time that a CBI survey has sounded an encouraging note.

The survey shows strengthening business optimism and further increases in output over the past four months. Significantly, a substantial increase in investment is predicted for this year. That bears out the Government's view that the recovery is well under way.

The Government have played their part by such measures as the reduction in the national insurance surcharge, which is worth about £2 billion in a year and the "support for innovation" schemes set up by the Department of Trade and Industry.

One vital area in which my Department has a major role to play is that of training. We need a better educated, better trained and more adaptable workforce. We lost jobs to competitors in the past partly because they paid more attention to training than we did. We must have a coordinated strategy for dealing with the training needs of both young people and adults.

Our adult training strategy, announced by my right hon. Friend the Secretary of State for Employment this afternoon, makes it clear that we are maintaining our overall level of support for adult training. In future we shall be putting much more emphasis on training for specific job opportunities, especially in new technologies. Our training opportunities scheme will continue to play an important role in securing skill supply and in providing training for the unemployed, but, in future, it will concentrate more on the provision of skills in those areas that are in real demand. Adult training will be much more closely linked to individual employers' needs. We shall also be seeking to deliver training in much more flexible and cost-effective ways so that, within the same total level of resources, we can help more people more effectively.

Our Open Tech programme, already under way, has had its budget expanded and will form an integral part of the adult training strategy. The programme has a major role to play in making access to training easier for individuals and companies alike. In the very near future, the Manpower Services Commission hopes to sign a contract with the northern regional management centre for the delivery of a distance learning programme for supervisors, in conjunction with the Northumbrian consortium of colleges and the national examinations board for supervisor status.

Young people are particularly at risk in times of high unemployment. They lack the skills and experience to offer an employer and, therefore, are without the means to compete in a difficult labour market. Last summer, the Government announced a major extension to our technical and vocational education initiative, which aims to stimulate the further development of technical and vocational education for 14 to 18-year-olds, by providing resources for local education authorities to run pilot schemes.

Further proposals were submitted to 68 local authorities and the Manpower Services Commission has recommended to the Government that, subject to negotiation, it should support 46 proposals. Of the eight local education authorities in the north-east that submitted bids, seven—including the county of Durham—have been recommended for acceptance. I am sure that hon. Members will welcome that. That sort of success rate not only testifies to the quality of the proposals put forward by those authorities but reflects the Government's concern that the north-east should be well represented in significant national initiatives of that kind.

The hon. Gentleman made some rather grudging references to the Government's regional policy. I remind him that between May 1979 and October 1983, more than £39 million was made available to firms in the county of Durham under sections 7 and 8 of the Industrial Development Act 1982. The White Paper published on 13 December reaffirms the Government's firm commitment to an effective regional policy and invites comments on, among other things, rates of grant and assisted area map coverage. I am sure that interested groups within the county—I hope that hon. Members will encourage this — will take the opportunity to air their views. One change proposed in the White Paper that I am sure will be welcomed in the county is the extension of the regional development grant scheme to the service sector——

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 seven minutes to Eleven o'clock.