§ Mr. David Winnick (Walsall,North)
I beg to move,That this House deplores the effects of present Government policies on the people of the West Midlands, until recently the heartland of the manufacturing industry on which the wealth of this country was based; notes with deep concern the continued substantial increase in unemployment in the region and the severe suffering inflicted on so many individuals and families there by the return of mass unemployment, the sharp decline in public sector house-building, and other cuts in important services; deplores as well the proposed abolition of the West Midlands County Council which serves the region well; and calls on the Government to reverse these disastrous policies and thus alleviate the hardship being suffered in the West Midlands.The last time that I initiated a debate on the west midlands was December 1981 when my right hon. and hon. Friends and I warned that all the indications were that, far from there being any signs of improvement, unemployment in the region would continue to worsen. We feel no satisfaction at realising how justified were our fears.
The west midlands has experienced continual factory closures, large-scale redundancies and increases in the number of people on the dole. There has also been a considerable increase in poverty. Among the firms that have closed in the black country area of the west midlands since 1979 are the following: Rubery Owen in Darlaston — it once employed 7,000 — Round Oak steelworks, Patent Shaft steelworks, J. Bagnall and Son, British Steel Corporation Bilston rolling mill, Chance Brothers, Guy Motors, Vowles Foundry, F. H. Lloyd (Dudley), NEI Thompson Pressure Vessels and Bullers Engineering. They have all closed with the loss of thousands of jobs. This year, C. & B. Smith Foundries, Wednesfield, has declared its intention to close in October 1985 with the loss of 460 jobs. NEI Wellman Clyde Booth of Darlaston intends to close in May with the loss of 179 jobs. Last Friday, my hon. Friend the Member for Walsall, South (Mr. George), myself and representatives of the work force met the management only about two miles from here. We argued as strongly as we could that the firm should not close but there was no reprieve.
In addition, the washing machine firm, Servis, is to go, although we all hope that new owners can be found. Some 500 jobs at Darlaston are at risk, as are many more in other parts of the country. My hon. Friends will be interested to hear that the firm was featured in the Tory political film shown two days before polling day at the 1983 general election. That propaganda film used the company to illustrate the assertion:we're going forward towards a better future, a future which will have new jobs to offer.Unfortunately, very few new jobs are on offer in the west midlands, but plenty of jobs have been lost and are being lost.
Whereas in 1978 there were 16 closures in the west midlands, and 34 closures in 1979, the figure in 1983 was 275 and last year it was 263. In 1981, there were 800 company liquidations in the west midlands. Last year, the figure was 1,286. It all adds up to a bleak picture for the region. That is why it is necessary, a few days before the Budget, for Opposition Members to emphasise that we need a change of Government policy to allow the west midlands and the black country to survive as an industrial 541 area, and to stop the closures and redundancies. That point will be made time and again in speeches today. A change of policy must be reflected in the Budget next Tuesday.
The damage inflicted on manufacturing industry is illustrated by the fact that, during the past six years, there has been an estimated reduction of 30 per cent. in the number of people employed full time in manufacturing industry in the west midlands. In the black country, the reduction is 31 per cent. Is it any wonder, therefore, with this sharp downturn in manufacturing industry, that the dole queues get longer and longer? Is it any wonder that more and more people are forced to eke out a living with their families on supplementary benefit? Is it any wonder that many of our constituents come to see us and write to us saying how difficult it is to make ends meet? What crime have they committed that they cannot obtain jobs and must remain unemployed, not just for a few weeks or months, although that is bad enough, but for longer and longer periods?
We all know the way in which unemployment has grown and the fact that the counting of the unemployed has been so altered as no longer to reflect the accurate figure. But we should consider the change that has occurred in the west midlands, even using the official figures. I hope that Conservative Members, who no doubt have come here to justify Government policy, will reflect on these figures. In May 1979, in the black country—my constituency is in the black country, so I refer to it often—28,829 people were unemployed. On the last count, the figure was 105,387.
The problem is not just unemployment but the period for which people are unemployed. Let us consider the number of long-term unemployed in the west midlands and take two opposite age groups. First, in April 1979—a month before the Government took office — slightly more than 17,000 people aged 45 or more had been unemployed for longer than a year. At the last count, the figure was just under 55,000. One can imagine the extra difficulties that that age group experiences when trying to find work. What chance has someone in his forties or fifties of finding another job? It is easy to quote figures, but behind the statistics lies human tragedy. The person unemployed has lost the ability to earn his living, he must live on supplementary benefit, his savings have been spent, and his pride is shattered.
Yesterday during Prime Minister's Question Time, we referred in passing to youth unemployment. In April 1979, the number of people aged under 25 who had been unemployed for 12 months or more was just under 6,000. In January this year, the figure was just under 55,000. That figure probably underestimates the true position.
In April 1979, 34,000 people in all age groups in the west midlands had been unemployed for more than a year. In January this year, the official figure was 164,529. What a condemnation of Government policies. What a condemnation of what has been inflicted on the west midlands by the deflation policies of the past five or six years. The west midlands is well represented on a list of constituencies with the highest male unemployment. I am sure that my hon. Friends who represent Birmingham will know that in three Birmingham constituencies male unemployment is well over 30 per cent. In 11 other west 542 midlands constituencies, male unemployment is more, and in some cases much more, than 20 per cent. In Walsall, North male unemployment is 22.5 per cent.
This year I received a letter from a constituent, which I will quote. He said:I have been unemployed for the last two and a half years ever since Guy's Motors of Wolverhampton closed down. I have tried to find work but to no avail. All they say is we are too old. I am 54 years and very fit for my age.He then refers to the amount of supplementary benefit that he receives and continues:My savings are all gone. My wife is unable to work with ill health. I have one son of nine years … I was wondering if there is any hope for us. I was out before for two years and it's very rough on people. I am willing to do anything in the way of work. It's very hard when you want to work and all you have to look forward to is old age and the grave. Mind you, you cannot afford to die these days, it's too expensive. You just sit and think of doing nothing for the rest of your life. If you do have the chance of a job, what happens? You have a letter if you are lucky. Sorry no work. There are so many firms going bust with all the cutbacks.What he means is that, if a man applies for a job, he is lucky to receive a letter, although the letter will usually be one expressing regret that the firm cannot take him on.
I thought it was appropriate to send that letter to the Prime Minister. She replied in predictable terms, no doubt like the response that we shall get today from the Minister. She regretted the position, sent her sympathies to my constituent and the rest of it, but those sympathies and regret will not do much good to my constituent. He wants to work. We all want to work. Why should he and so many like him be denied the opportunity of working?
The most important reform in the immediate post-war years was the continuation of full employment to get away from the mass unemployment, poverty and destitution of the pre-war years. Now that is being eroded, undermined and destroyed. The formidable problems in the west midlands will not really be helped much by the granting of intermediate area status to part of the region. Total expenditure on regional assistance for all parts of the country is to be cut from £700 million to £300 million by 1987–88. The money for areas with intermediate area status is not likely to amount to much.
Of course, we are pleased to receive any form of assistance. We are not in a position to refuse, we represent our constituencies. We want a new deal for the west midlands. The amount being given is—
§ Mr. Winnick
Yes, it is pitiful. The amount offered is far from sufficient to cope with the devastation in the west midlands. The president of the Wolverhampton branch of the Building Employers Confederation has written to tell me how disappointed he is about the small amount of money that is available. He knows, I am sure, what he is talking about and he says that what little is being done is not enough to encourage the necessary investment. I sent the letter to the appropriate Minister.
What do we want most? There is no doubt about it. First, we want a vast injection of private and public investment in the west midlands. Since 1979 private companies in the United Kingdom have shifted about £50,000 million of production and capital abroad. The abolition of exchange controls was a direct incentive to investment abroad. The investment that we need in the west midlands is going abroad, at the expense of our constituents.
543 I wish that I were wrong, but I doubt whether next Tuesday in the Budget we shall be able to say that essential investment will be directed to the west midlands.
We need public investment in housing, railways and telecommunications. The west midlands has been starved of public investment in the last few years, as have other areas.
Let us consider housing. As my hon. Friend the Member for Walsall, South knows, no contracts for council house dwellings have been entered into in our borough since 1979. That is almost unbelievable. Some people tell me that that cannot be so and that I must be wrong, but that is the official position. I do not need the official figures, because I know what is happening only too well from my surgeries and correspondence.
A tremendous amount of housing improvement is necessary in that borough, and yet year after year the housing investment programme allocation remains totally inadequate to meet housing requirements. About 6,500 dwellings in the borough, in both the public and private sectors, are designated as unfit. That applies to many boroughs, if not all, in the west midlands.
Many tenants who have waited a long time for their homes to be modernised now have to wait even longer. The Rosehill estate in Willenhall consists of pre-war council dwellings. For years tenants have waited for their homes to be modernised. In January last year the council told me that it hoped to start work in the 1985–86 financial year. I wrote to the council again this year and I was told that the work could not be started and that further delays were inevitable. The reason is obvious. Sufficient HIP money is not available.
Tenants from Rosehill have written to me asking whether a Minister will receive a deputation. Yesterday I wrote to the Secretary of State for the Environment asking whether he or one of his colleagues will receive a deputation from Rosehill estate. I hope, of course, that he will say yes.
Why is money not available for housebuilding in the public sector? Why is money not available for improvements, modernisation and urgent repairs? Money could be put to good purpose to satisfy housing needs in the borough. People with families are having to wait years to be rehoused. There are those in multi-storey blocks, waiting to be transferred to a house. The Government will remind us that under their policy tenants can buy their home. But what about building? Why all the emphasis on selling council dwellings? Why are they not being built? Why is pre-war accommodation not being improved? I wonder how many tenants at Rosehill have applied to buy their homes. I imagine that very few have applied.
We need a vast housing programme to build much needed accommodation and to modernise. The longer modernisation is delayed, the more expensive it will be. Local authorities are to be limited further in the amount of money that they can spend on housing. We debated that earlier in the week.
Manufacturing industry must be encouraged. I do not see how manufacturing industry can be revived without some control on imports. I do not want to debate at length today the pros and cons of imports but I am sure that the continuing flood of manufactured items from abroad into the west midlands plays its part in undermining domestic industry. I am certain that we cannot achieve a sustained economic recovery in the west midlands, or anywhere else, without some control over imports.
§ Mr. J. F. Pawsey (Rugby and Kenilworth)
If we impose controls on imports other countries are likely to impose constraints on our goods which go abroad. The United Kingdom is still one of the greatest exporters in the world.
§ Mr. Winnick
For the first time since the industrial revolution we are importing more manufactured items than we are selling abroad. The hon. Member for Rugby and Kenilworth (Mr. Pawsey) overlooked that. Constraints are already imposed by other countries, which discriminate against British goods. The hon. Gentleman overlooks the raw deal that we have because of our membership of the EEC. Some protection is necessary. That is my opinion, not because of dogma, but because I cannot see how we can achieve sustained economic recovery without such controls.
We must broaden the industrial base in the west midlands. I do not deny that the decline has been going on for some time. We need new technological industries. There is little sign that we are attracting the new industries necessary to broaden the industrial base. The older industries are declining. Manufacturing industry is having tremendous difficulties and the area is not attracting the replacement industries which are so necessary to avoid continued mass unemployment in the region.
Lack of demand in the economy has led to deflation and mass unemployment. Conservative Members are fond of saying — they will say it today — that other factors, including a world recession, are involved. It is interesting to recall that during the last general election a draft report of the Select Committee on the Treasury and Civil Service —an all-party Committee which was chaired at the time by the then chairman of the 1922 Committee, the right hon. Member for Taunton (Sir E. du Cann)—had stated that at least half of all the unemployment that had occurred since 1979 had been due to Government policies. We say that the figure is more than half.
It is no use Conservative Members saying that the Government cannot be held responsible for what has happened. Many of their policies initiated since 1979 have led to the devastation of, and tragedy that now exists in, the west midlands. The Government must bear a heavy responsibility for what has occurred.
My hon. Friends will refer I know to the closing of skillcentres. What sense is there in closing them? I have referred to the number of youngsters in the west midlands who have been unemployed for longer than a year. It is madness in the present situation to close skillcentres. Will Conservative Back Benchers try today to justify that action?
My motion refers to the role of the West Midlands county council. It has played a positive role and its abolition will serve no purpose. I pay tribute to the work of the West Midlands enterprise board, which was set up by the Labour-controlled county council. The board is a form of regional initiative — I only wish that such initiative would be shown by the Government—which took on the task of trying to save jobs. It appreciated that it could play only a modest role, but it has been a useful one. It is now supporting nearly 3,000 jobs in companies having an average of 110 employees. That has helped to ensure that firms and jobs have been retained.
In the situation that I have described, anything that saves firms from collapse and jobs from disappearing should be welcome. If the county council is abolished, the 545 role of the enterprise board is not likely to be retained. I do not believe that any financial provision is being made for district councils in the west midlands adequately to take over the role of the board. Shall we see the jobs that are now being sustained by the board disappearing, creating yet more unemployment?
Some of my hon. Friends have come to the House today to illustrate what is happening in their parts of the west midlands. They will explain how the region has suffered. We are speaking of an area which was the very heartland of Britain's manufacturing industry. It has been devastated. Darlaston, represented by my hon. Friend the Member for Walsall, South, whatever problems it may have had, was a thriving industrial area until 1979. Those who think that I have exaggerated the effects of monetarism and Thatcherism should visit Darlaston, which has become almost a ghost town as a result of redundancies and closures.
The west midlands has suffered enough in the last six years. I have been asked by the media what purpose this debate will serve. I have replied, frankly, that we are unlikely to persuade Ministers to change their minds. We should be deceiving our constituents to suggest otherwise. Nevertheless, part of our job here, in representing our constituents in the west midlands, is to expose the devastation that has occurred and the suffering that is being endured by the people there, by men and women who want to work but who are denied that opportunity, with little sign from the Government of any change of policy.
I do not know whether we shall persuade Ministers to change their minds. Probably not. But we have a responsibility to keep bringing these matters to the House. I do not care how often we debate this subject. Even if we do not get a response from Ministers, at least we know that we are doing our job in bringing the problems of those who elected us to the attention of Parliament. That is why this debate is necessary and justified.
I am deeply concerned by the signs in my constituency of an increasing number of people living in poverty and near poverty. Some of them I know, others write or come to see me. Imagine what it must be like living on supplementary benefit year in and year out, existing on the tiniest income, having to make every penny count.
Is there no alternative? We say that there is. A change of economic policy is necessary. The time has come for economic expansion and to end Thatcherism and monetarism, which have brought only suffering to the west midlands.
§ 10.6 am
§ The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier)
To listen, as I have carefully, to the hon. Member for Walsall, North (Mr. Winnick), one might be forgiven for believing that when Labour Members were last in office they had the miracle cure for all the problems of the west midlands and that unemployment there halved, instead of doubling, as it did.
People may have forgotten that the Labour party was in power for two thirds of the 15 years prior to the Conservatives being elected in 1979. During that period, they presided over stagnation and a cancer running 546 throughout industry in that great region, to which they never applied even sticking plaster, let alone major surgery.
Those times were, and still are, times of dramatic change, some not so welcome but others positively exciting and challenging, and that is particularly so of the technological age of which we are now firmly a part.
The points raised by the hon. Gentleman which affect the Department of the Environment will be dealt with by my hon. Friend the Under-Secretary at that Department. Of the points that concern me, it perhaps came as no surprise that the hon. Gentleman did not mention wealth creation—he referred to wealth distribution, as Labour Members are commonly known to do—or the need to improve industry's competitive edge. He did not talk much about the importance of small firms and their potential for employment and wealth creation. Nor did he talk about indigenous growth, diversification, modernisation and innovation. All of that is a foreign language to Labour Members, and in these matters the hon. Gentleman suffers from a delusion of adequacy.
Let us consider what really happened and what caused the decline of the traditional industrial sectors of the west midlands. For long, the area was the heart of the nation's manufacturing industry. The 1.9 million people in employment in the region—10 per cent. of all Great Britain's employees—account for over 13 per cent. of all those in manufacturing industry. That is reflected in the region's industrial sector, with 38 per cent. of employment being accounted for by manufacturing industry, compared with the United Kingdom average of 28 per cent.
With its heavy dependence on goods for the consumer market, it was perhaps inevitable that the region would be hit particularly hard by the recession, which has been worldwide and by no means confined to the United Kingdom.
The region has depended upon a relatively narrow industrial base, concentrated precisely on those industries most vulnerable to recession. They have their share of the negative side of the great industrial legacy of the west midlands — the decline from the peaks of the 1960s through to the stagnation of the 1970s and on to the decline during the world recession. That is a fate which inevitably befalls the overmanned and uncompetitive, with some notable exceptions.
Companies—especially those which have for so long been carrying the burden of overmanning — have not been sheltered from the recession, and they have been forced to shed a considerable amount of labour. The result of that is the historically high level of unemployment in the region, which is obviously the concern of each and every one of us.
However, the recession is not the only reason for the difficulties that the west midlands is facing, although it has played a considerable part. Running alongside the recession has been the structural weakness of some industries of importance to the region, especially the motor industry, with whose problems we are all familiar. However, it goes without saying that the west midlands is still the country's key manufacturing region.
How did the Government respond to that situation? We have acted through our broad economic policies, and their success can be seen by the fact that this year looks set to become the fifth successive year of economic growth, which is the longest period of sustained growth since the last world war. The new economic climate that is leading 547 to substantial and sustained recovery has been fostered by the Government, since we came into office, through a policy of sound money and responsible control of public expenditure. Through this approach we have created a climate in which business can prosper and enterprise can flourish. The benefits of this policy are indispensable to recovery and prosperity.
The success of the Government's policy has enabled a whole host of measures to be taken to create incentives for enterprise and small business expansion. It is important that every effort is made to encourage enterprise throughout the economy. The Government will continue to attach great importance to the manufacturing sector, which must continue to occupy a central place in our economy if we are to grow and prosper. We need buoyant manufacturing output to satisfy home demand, to provide employment and to generate enough exports to pay for the imports which both industry and private consumers need.
§ Mr. Geoffrey Robinson (Coventry, North-West)
The Minister will appreciate that in speaking so early in the debate he will not be able to respond to the issues that will be raised after he has completed his contribution. I wish to put one or two matters to him now so that he can take them up before he resumes his place. The hon. Gentleman has spoken of four years of recovery and told us that he accepts the importance of manufacturing industry. For the second year running we have a massive and growing deficit in manufacturing trade, which is reflected in the continuing decline of manufacturing industry in the west midlands. How can he call that a success? What do the Government intend to do to redress the balance and to get manufacturing industry in the west midlands moving again?
§ Mr. Trippier
I shall spell out the figures to the hon. Gentleman. He may recall that I have spelt them out to him before. I did so when we were in Committee on the Cooperative Development Agency and Industrial Development Bill. However, I shall rehearse them for his benefit and for the benefit of others who are interested.
There have been some notable achievements in the manufacturing sector. Last year we recorded our best annual export performance for over a decade. In the fourth quarter of 1984, non-oil export volumes increased by 12 per cent. over the same quarter in 1983 and manufacturing exports increased by 15 per cent. That was achieved despite the coal strike—which the hon. Member for Walsall, North supported throughout in speeches in the House and in questions which he put to my right hon. Friends the Secretary of State for Energy and the Prime Minister— manufacturing output rose last year by 3.3 per cent. —the fastest rate of growth since 1973. For four years up to November 1984, manufacturing productivity increased at an average growth rate of 6 per cent. a year. That is the sort of increase that, in our modesty, we attribute readily to the Japanese but not usually to ourselves. That rate of growth is significantly faster than anything achieved by West Germany and the United States in the same period.
As we are all aware, this increase in activity has not been reflected so far in the number of unemployed. There is only one way to create jobs and to reduce unemployment. We must constantly encourage the competitiveness of our manufacturing and service industries. Our prosperity will depend on a balanced development of both.
548 I reaffirm that the Government will continue to attach great importance to the manufacturing sector. Manufacturing has been the heart of the west midlands' economy, and it must continue to occupy a central place if we are to continue to grow and prosper. We shall do our best to provide the right climate for this growth, but much of the task must lie with industry itself. We cannot legislate for it. Individual firms must adopt efficient production methods, working practices and new technology.
Until recently the chant of the Opposition parties, most notably that of Her Majesty's official Opposition, was, "What economic recovery?" We have heard that chant before. Gross domestic product is a measure of the nation's total output, and it is now at an all-time peak. It is about 4.5 per cent. above the previous peak in 1979. Our critics have been forced to change tack. Since early 1981 —the trough of the world recession as experienced in the United Kingdom—our economy has grown steadily for nearly four years. That is the longest sustained upturn in the United Kingdom since the second world war, and it is far from over. All the forecasters are predicting continued buoyant growth throughout 1985 up to 3.5 per cent. following the end of the miners' strike.
We are all used to unfavourable comparisons between the United Kingdom and its European competitors. When our performance compares well with our competitors, for goodness sake let us not belittle our achievements. The United Kingdom led Europe out of recession and the west midlands played a significant part in that. We had the highest output growth rate in the European Community in 1983. Last year, despite the miners' strike, our growth is expected to have been close to the EEC average. Forecasters are expecting once again that in 1985 the United Kingdom will head the EEC growth table. With the economic recovery clear to all, the Opposition—
§ Mr. Trippier
I shall not give way.
I cannot resist making this point. The Opposition have now changed their chant of "What recovery?" to a charge that the recovery has been confined to the service sector. They allege that manufacturing industry has not benefited, so let us put that right. The accusation may be bewildering to those who have noted the buoyant CBI industrial trends surveys over the past two years, which have reported improved business confidence and prospects. People are right to be sceptical, but the fact is that manufacturing industry has participated fully in the recovery. If anything, the recovery in manufacturing has been faster than that of the economy as a whole. That is especially true in the west midlands. Since the first quarter of 1981—the trough of the manufacturing recession—manufacturing output has grown by 9.2 per cent. compared with growth in total output of 8.4 per cent.
§ Mr. Nicholas Budgen (Wolverhampton, South-West)
Does my hon. Friend agree that investment is not necessarily a sign of opportunities for jobs? That is precisely why our right hon. Friend the Chancellor of the Exchequer phased out some of the advantages to capital in the last Budget.
§ Mr. Trippier
I agree entirely. It will be interesting to see what comes forward in the Budget next week. Of course, I have no idea of what will be in the Budget. 549 However, I am sure that many in the west midlands will be pleased if the Chancellor concentrates more in his Budget on raising tax thresholds than on spending overmuch on the infrastructure.
As with total output, we shall soon enter the fifth successive year of sustained growth. There are no signs, despite the doomsayers' prophecies of last year that the upturn in manufacturing in general is petering out, and there is no sign of it in the west midlands. The reverse is true. In 1984 manufacturing output rose by 3.5 per cent. —the largest percentage increase since 1973. The signs for 1985 and beyond continue to look good, with at least 2.5 per cent. growth predicted for this year. That is precisely what the Government's economic policies were designed to achieve—steady sustainable growth, not just a few years of boom followed by the inevitable bust.
Within manufacturing, some sectors have performed well, while others obviously have performed less well, but there is nothing unusual in that. The growth in some manufacturing sectors has been dramatic. Output of office machinery, including electronic data processing equipment, has risen by a staggering 182 per cent. since the manufacturing recession trough in 1981. Electronic consumer goods output has grown by 35 per cent.; agricultural chemicals by 29 per cent.; plastic products by 25 per cent.; and pharmaceutical and consumer chemicals, industrial chemicals and electronic industrial goods by 21 per cent.
One of the encouraging aspects of the recovery in manufacturing is the improvement in export performance. Since the end of 1983, manufactured exports have been increasing strongly, and, by the end of 1984, their expansion had turned into a veritable surge. In the final quarter of 1984, the volume of manufactured exports was 15 per cent. higher than a year earlier and 13 per cent. higher than in the previous quarter. The volume of manufactured exports is running at more than 10 per cent. above its previous peak.
It is encouraging that what can be termed the inner performance of manufacturing, on which future success will depend, has also been responding well. The volume of investment in manufacturing grew sharply by 13 per cent. in 1984, and a further 7 per cent. real increase is predicted for 1985 by my Department's investment intentions survey.
§ Mr. Trippier
It must be if it comes from my Department.
Equally encouraging, with a view to our international competitiveness, is the remarkable improvement in manufacturing productivity. By the first quarter of 1984, manufacturing output per head was 28 per cent. above its trough in 1980. Productivity performance remains strong, with an increase of 4.5 per cent. in 1984.
§ Mr. Geoffrey Robinson
I wanted to put several points to the Under-Secretary of State and I wanted him to go a little further before putting them to him, but he is trying to claim that his policies are a success in the remarkably rosy picture that he is painting. I am sure that not many Opposition Members with constituencies in the west midlands recognise that picture. We must measure that success against the success of our competitiors. Will the 550 hon. Gentleman tell us any other country that has managed to transform its balance of payments on manufacturing —its net exports—from a surplus of £2 billion to a deficit of £5 billion since 1979? What other Government has achieved a remarkable 4.5 per cent. increase in GNP during nearly six years of government? Has any other country managed that wonderful achievement? Other countries have done significantly better. What other country has a manufacturing output that is still lower than the peak achieved in 1973? What other country has achieved this remarkable success story? Lastly.
§ Mr. Robinson
I am on my last point, Mr. Deputy Speaker. Unfortunately, the Under-Secretary of State chose to speak first. We have not had a chance to hear these points and to reply to them. Because the hon. Gentleman chose to speak first—we did not think that that would be the case—I have had to intervene to get these points home to him so that we can obtain answers. I apologise to you, Mr. Deputy Speaker, for having to do SO.
Can the Minister tell us any other country where manufacturing investment is still 25 per cent. below its level five years ago?
§ Mr. Trippier
I think that the hon. Gentleman is using the excuse of an intervention to rehearse a speech which he will probably have an opportunity to make later, if he is fortunate enough to catch your eye, Mr. Deputy Speaker. I should obviously like to cover the specific points—
§ Mr. Trippier
If the hon. Gentleman had listened more carefully, he would have noted that I have already covered two of them. I am afraid that I would require notice of the other points. I shall write to him about them.
I have heard the hon. Gentleman speak on a number of occasions about the west midlands. Has he considered, bearing in mind that not only people in the west midlands but others abroad read what he has said, the fact that some of the doom-laden prophecies he has made are blighting the region considerably? The hon. Gentleman should be a little more responsible when talking about the region as a whole.
§ Mr. Deputy Speaker
Order. The Under-Secretary of State has made it clear that he is not giving way. The hon. Member for Coventry, North-West (Mr. Robinson) may seek to catch my eye later in the debate.
§ Mr. Trippier
For a long time there has been a widely held view that areas have been unfairly discriminated against and have suffered because of past and present regional policies. Nowhere was that view more strongly held than in the west midlands. Why continue with a regional policy? Of course, parts of Britain have been assisted areas since the 1930s, and that might seem to be an argument for saying that regional policy cannot change things. There is no doubt that regional policy has created 551 more jobs. Indeed, estimates of more than half a million jobs are often quoted. In fact, we referred to them in publishing the White Paper on regional policy at the end of 1983. However, we recognised that the previous policy was not suited to today's economic climate. It has been expensive and the expenditure has not been made in the most cost-effective way.
First, there has been, job shuffling from non-assisted areas. Secondly, the old regional development grant scheme was not job-related and favoured capital-intensive industries, thus harming job prospects. Thirdly, assistance did not extend to services, which is what the regions needed, especially the west midlands with its dependence on manufacturing industry.
In the past, redistribution of jobs was a purpose of regional policy, but that was more justifiable in the 1950s and 1960s when the economy was growing and unemployment was low. Now all regions have historically high unemployment levels, as they did when the Socialists left office.
A particular problem had been the west midlands. Unemployment there had risen at a faster rate than elsewhere, but the region had not been an assisted area. Although its worst disadvantages were removed when industrial development certificates were abolished in 1982, coincidentally, a decision which was announced to this House by my predecessor my hon. Friend the Member for Norfolk, South (Mr. MacGregor) during a debate on a private Member's motion in December 1981 in the name of the hon. Member for Walsall, North, there is plenty of scope for improvement. The Government, by making changes, are trying to get better value for money. Those changes will also enable public expenduture savings to take place.
Following our fundamental review of regional policy, we can answer this criticism. The effect on the region of the new policy, together with a new assisted area map, was immediate. For the first time, a large part of the west midlands was included in the map as an intermediate area. Approximately 77 per cent. of the working population of the west midlands now falls within an assisted area.
What precisely does intermediate area status mean to the west midlands? For the first time, those areas that have been made assisted areas will be eligible for regional selective assistance under section 7 of the Industrial Development Act 1982. That assistance takes certain forms. First, project grant is available for projects in the manufacturing and service sectors. Grants are based on the fixed capital costs of a project and the number of jobs a project is normally expected to create over three years. The amount of grant available will be negotiated as the minimum necessary to enable the project to proceed.
Secondly, there is the in-plant training scheme. Grants may be made to cover up to 80 per cent. of eligible training costs. We have responded to requests to introduce such grants.
Thirdly, the exchange risk guarantee scheme covers firms against the exchange risk on foreign currency loans in return for a service charge.
Fourthly, fixed interest loans from the European Investment Bank of up to 50 per cent. of fixed project costs are available for projects creating and safeguarding jobs — similar loans are available from the European Coal and Steel Community — and projects which create employment opportunities for redundant coal and steel workers.
552 In addition, the region's assisted areas will qualify for support from the European regional development fund. That will give many west midlands local authorities access to the ERDF for their infrastructure projects for the first time.
I mentioned briefly European Coal and Steel Community loans. These are not only restricted to the assisted areas; they are available in "coal and steel" regions. The European Commission last year recognised that in the west midlands that means the whole of the west midlands metropolitan county and the whole of Staffordshire.
Clearly the west midlands' industrial structure is such that large numbers of companies may now be in a position to benefit from assistance. The amount of aid coming to the region will, however, depend on the response of the business sector, since regional aid is demand-led. The west midlands assisted areas represent 20 per cent. of the total national map coverage, and it is important to the region that it is receiving a fair share of the assistance. Response so far has been great and has produced 4,777 inquiries about regional selective assistance which have passed through the Department's central inquiry point in Birmingham. These have so far generated over 210 cases which are being examined by the Department's officials. By the end of February, 14 had been approved, 21 withdrawn, and 175 were still under appraisal. Of the 14 cases approved, none has yet had any grant paid—it is too early for that—but the associated new jobs are in excess of 530.
To publicise the schemes of regional selective assistance, my Department has held a series of 40 seminars in the region for representatives from local industry and commerce which have attracted a total audience of over 3,700 people. A further four seminars are planned over the next few weeks.
Assisted area status will also mean that the region will be able to compete more effectively for inward investment. There are already over 300 foreign-owned firms in the region employing in excess of 60,000 people, which proves that, even without the benefit of assisted area status, the region has proved attractive to inward investment. The position can only improve now. The Department will continue to work closely with the West Midlands Industrial Development Association—a body which it partly funds in partnership with local authorities and the private sector—in promulgating the advantages the region and not just the assisted area has to offer to inward investors.
It was John Kennedy who said:Change is the law of life, and those who look only to the past or present are certain to miss the future.He was right. Change is an essential and enduring feature of industry and trade, as it is of life. If we spend too long looking back at the golden age of mass manufacturing and full employment, we shall miss the full potential of the age of the small entrepreneur.
The growth of small businesses is one of the most essential elements in the increasing competitiveness and efficiency of the United Kingdom economy. It is a major preoccupation in our determination to continue the development of a general economic climate which enables industry and commerce to realise its potential for wealth creation free from the red tape imposed by our predecessors. The Government have been determined not 553 to let the entrepreneurial spirit wither. That is why support for small firms has been, and will remain, central to our overall economic and industrial policies.
§ Mr. George Park (Coventry, North-East)
On a point of order, Mr. Deputy Speaker. Are we to be told whether the Minister hopes to finish by 2.30 pm?
§ Mr. Trippier
If the hon. Gentleman listens carefully to the point that I am making about small firms, he will find it interesting.
As a result of the research that I have conducted in the Department of Trade and Industry, it has been ascertained that some 90 per cent. of all firms in the west midlands are small by our definition. That is in itself an impressive figure.
§ Mr. Trippier
The hon. Lady is interested in this subject. She says that they are closing down. I am aware that the fatality rate of small firms in the west midlands, no different from the rest of the United Kingdom, is about one in three in the first three years. As a result of the growth of enterprise agencies in the west midlands—all of them successful—the failure rate of small firms—
§ Mr. Trippier
Enterprise agencies. My hon. Friend is becoming a little confused with enterprise boards. I am talking about enterprise agencies. They are private sector-led. In the areas where local enterprise agencies have been established the failure rate is one in 12, or 8 per cent.
The proof of the pudding is in the eating. Many of the firms in the west midlands and elsewhere require what I call an essential hand-holding service. It is important that we should encourage them, because it is inconceivable that the large firms in the United Kingdom will increase their share of the labour force, whereas I can see that small firms have been, are, and will continue to do so for the remainder of this century and the early part of the next.
I was interested to read a report in yesterday's Financial Times referring to a survey carried out by the west midlands region of the Confederation of British Industry. This response to the survey from firms in the region shows that alarge majority had made significant changes to production processes and had introduced new products".That was the point that I wanted to make to the hon. Member for Walsall, North because he mentioned it. The article also stated:Most companies have turned their efforts towards innovation. About 81 per cent. had widened their product range and more than half had entered new geographical market areas.I was most interested to read the remarks of Mr. Jim Cran, CBI west midlands director, who said:It is clear that enormous behind-the-scenes strides have been taken by companies in a bid to beat the recent industrial decline. The survey results should help bury the ridiculous notion that the West Midlands is on the way out.We recognise that technology has not altered one basic economic truth. If we are to earn our living in the world, we have to maintain and develop tradeable products that will be winners in international markets. Despite the growth in importance of the service sector, that means manufactured goods.
554 The Government's objective is now based on the need for companies to establish long-term objectives for their manufacturing activities, ensuring that investment is based on a controlled approach to integration. Our assistance with feasibility studies and planning studies has a key role to play here in helping companies establish the right framework.
Basic building blocks for a bright future already exist, especially those created by the success of the Government's economic policy. The most positive point that I can make, and which can only count in the region's favour, is its reservoir of industrial talent and skills and its fund of entrepreneurs who will pioneer the region's climb back. They are the people who will help to make the west midlands strong and vigorous once again. They are already showing that they are prepared to rise to the challenge.
§ Mr. Bob Edwards (Wolverhampton, South-East)
I am absolutely astonished by the speech of a Minister with responsibility for dealing with the west midlands. It reminds me of the song in the Gilbert and Sullivan opera the "Mikado":The flowers that bloom in the spring, Tra la, Breathe promise of merry sunshine.In the west midlands, people are on supplementary benefit. That has never happened before in the area. They all have to go through the indignities that that kind of life involves. That the Minister can suggest that the economy is booming with great opportunities in the face of such massive unemployment passes my comprehension.
The Minister talked about the situation under Labour and under the present Government. In 1979, unemployment in Wolverhampton was 6 per cent. Today, after six years of Tory rule, it is 18 per cent. and rising. In my constituency it is 20 per cent. As the hon. Gentleman raised that point, let me give him a few details. Since the Government came to power, this is what has happened in all the wards in my constituency. In Bilston, East, unemployment has increased by 400 per cent. The increase has been 460 per cent. in Bilston, North, 294 per cent. in Blakenhall, 347 per cent. in Ettingshall, 401 per cent. in Spring Vale and 447 per cent. in East Park. Those are official figures that cannot be denied. How could the Minister make such an optimistic speech, faced with those facts?
I do not want to make a completely critical speech, although all of us are very emotional when we talk about unemployment in the west midlands. What future have the youngsters? They cannot think of getting married. They will have no kind of life at all. There is no job for them in the future. They are outlaws in our big world. There is nowhere where they can fit in. That is why we get emotional. That is why my hon. Friend the Member for Walsall, North (Mr. Winnick) continues to raise the question of the west midlands.
It is easy to give a recital of trade figures ignoring the fact that manufacturing exports are bound to increase when the dollar is so high and the pound is so low. Of course, one gets temporary new markets, but the fact remains that, whereas we used to be a manufacturing country supplying the markets of the world, we now import more manufacturing goods than we export. That has never happened since the industrial revolution. In the light of 555 those facts, which cannot be disputed, how can the Minister possibly talk about a massive growth in our economy?
Some 80 per cent. of the people in Wolverhampton do not actually come from Wolverhampton. Only about 20 per cent. of the existing population hail from Wolverhampton and 80 per cent. came from all over the country and the Commonwealth — from Scotland, Lancashire and south Wales, and all the depressed areas in the 1930s and 1920s. The area was prosperous only a few years ago. However, the whole area was dominated by about 30 huge British companies. A whole lot of small firms developed, supplying those big companies with all sorts of products. They took in the washing—if the House will pardon the expression — of the big companies, big monopolies.
The reason why so many small companies have gone bankrupt and have gone into liquidation is that those huge companies are no longer British companies; they are multinationals. They have changed the whole pattern of trade and manufacturing in the west midlands and in this country. Where they used to export manufacturing goods in chemicals, tools, machinery and textiles, they now export capital. They have been exporting capital for years. That has changed the whole structure of manufacturing industry in the west midlands. As my hon. Friend said, £50,000 million of British capital sucked out of the toil of the workers and technicians has been exported abroad, not in portfolio investment, but in direct manufacture.
Let me take one example. Dunlop used to produce 80 per cent. of all the sporting equipment manufactured in this country, with a great export market. Today it produces only 7 per cent. of sporting equipment. All the rest comes from subsidiary companies of the big firms developed abroad, much of it from Malaysia, where Dunlop has established a factory.
I could go on. The same has happened in textiles. Courtaulds made a huge mountain of wealth out of the toil of the workers in this country and exported great sums of capital abroad to establish factories in Singapore, Korea, China and Germany—all over the world. One can see the big chimneys in many countries. One may say that that brings in income, but it does not. It brings in a small part of those companies' profits. The rest is used for further development to compete with British firms.
The most successful company in the land is Imperial Chemical Industries, which has made £1 billion-worth of profit. I hope that it will share those profits with its workers, but 42 per cent. of ICI's products are now produced abroad. It has 16 factories producing goods in Europe, and it will not be long before the products of ICI's overseas factories come into this country to compete with chemicals produced in its home factories. The company has six factories in the United States of America. People say that that brings in capital, but does it? It brings in some capital, but the rest goes towards further development in other countries. I give the knife and fork industry as an example. South Korea produces 1 billion knives and forks a year, flooding the world market. Much of the manufacture there is based on British and American capital. I could give further examples.
What is required is a halt to that export of British capital produced by the workers of this country. We should call a halt to that and have some limited control over imports. We are not advocating protectionism, but we think that it is nonsense to allow British industries to be completely 556 destroyed by goods produced by people who work 63 hours a week under starvation wage conditions. There is nothing wrong in a policy of limited control of imports, which, sooner or later, will have to be accepted by any future Government. What is required is genuine growth.
My hon. Friend the Member for Walsall, North mentioned the enterprise board of the west midlands county. There one has the only real risk capital in the west midlands. It has put £7 million into small endeavours. It has put money into developing workers' co-operatives, the most important growth enterprises in this country. This week we can see that 1,000 workers' co-operatives have been registered under the Industrial Common Ownership Act 1976. Seven years ago there were only 20. Now there are 1,000 and many hundreds more waiting to be registered. We should encourage that development of workers' co-operatives, and the west midlands enterprise board has been doing just that. Yet the Government are going to wipe the West Midlands county council out of existence, as if it never existed. What will happen to those great endeavours to encourage people to develop enterprises based on mutual support and self-help?
Other hon. Members wish to speak, and I have already spoken for too long, so I shall end by saying that I hope that more concrete proposals will be made in the ensuing debate to deal with the massive problems of the west midlands.
§ Mr. Nicholas Budgen (Wolverhampton, South-West)
We have had fierce but perhaps mainly anecdotal speeches from the hon. Members for Walsall, North (Mr. Winnick) and for Wolverhampton, South-East (Mr. Edwards). They well illustrated the passion that is rightly felt in the west midlands and the concern felt in every section of the community at the appalling level of unemployment in the black country and the west midlands.
It is sometimes wrongly said that unemployment is solely the concern of the Labour party or of those directly employed in heavy manufacturing industry. Perhaps I can remind the hon. Member for Walsall, North that I have quite a rich suburban area in my constituency, Tettenhall, and many people come to see me and urge the sort of solutions that he wants to see. The pressure to reflate the economy with plenty of cheap money comes not only from what was once described as the industrial working class but from many honourable people from rich middle-class backgrounds and from those who have a vested interest in more public expenditure.
As I listened to the hon. Member for Walsall, North, I reflected that about 100 years ago my grandfather started what became quite a successful foundry business in his constituency. As my mother was the offspring of that family, my part of the family was not particularly well off. But the remainder of my mother's family made quite a bit of money. I rather enviously used to listen to my relatives describing their business lives in Walsall, but I do not remember any of them ascribing their success and money to Government action. I was quite critical and fairly envious, but as far as I recollect they always ascribed their wealth to a combination of luck and hard work. I do not remember any of them saying, as they talked about their dividends, that their success was entirely the result of some brilliant manoeuvre by the Government of the day. I found 557 it rather difficult to listen to the hon. Member for Walsall, North ascribing all the difficulties of the west midlands to Government action or inaction.
The hon. Member for Walsall, North was also wrong when he said that his view would never be listened to by the Government. There are many of us perhaps on this side of the House who might say that his view is listened to by the Government far too much. There seem to be three main approaches to this grievous problem. The first approach is what I believe to be the attitude of the hon. Member for Walsall, North, which is, broadly, that he wants more reflation. The second attitude is that he wants more selective assistance, particularly for the west midlands. However, there is a third attitude that has not yet been touched upon in the debate, and it involves the need to free markets generally. I was disappointed that my hon. Friend the Minister said nothing about that. The Government are putting far too little emphasis on that third approach.
As far as I can see, the Government have given up any serious attempt to reduce inflation below 5 per cent. and that is precisely why they are having to hold interest rates at about 14 per cent. The markets take the view that notwithstanding the rhetoric, the Government are not prepared to squeeze the economy any more. There seem to be strong social reasons for the Government's attitude. But it is no good attacking the Government as though they were logically carrying out all that they promise in their rhetoric. They seem to be prepared to print money to sustain a rate of inflation of about 5 per cent. per annum, which by any standard is a scandalous failure and represents a disgraceful giving-in to those who wish to see more reflation in the economy.
The second approach, which was broadly that of my hon. Friend the Minister, and is to a limited extent the approach of the hon. Member for Walsall, North, is that there should be more pump-priming, and that we should say that we are in favour of reduced public expenditure but nevertheless pride ourselves on the way in which we have spent more money. When attacked by the Labour party, we then say, "We've done better than you." But there seem to be some dangers in that. In the face of attacks from the hon. Member for Walsall, North, the extent to which the Government have spent money in order to try to buy their way out of unemployment has not perhaps been sufficiently stated. As the declining school rolls work their way through into the number of those requiring work, we may find that if, by chance, the unemployment figures fall in later years, we have nevertheless created a huge bureaucracy that is designed to train and employ people as an alternative to their being trained and employed by the private sector.
One has only to look at page 67 of the public expenditure White Paper and at the budget of the Manpower Services Commission to see how, over the past five years, expenditure on that has increased from a little over £600 million to £1,200 million. The figure is forecast to increase, in 1985–86, to something not far short of £1,600 million. In 1979–80, general labour market services cost £107 million, yet the cost is due to increase to something not far short of £700 million in 1985–86. Thus the Government are spending a lot of money, and in many instances it will cause great problems for the future. I am most grateful for the attendance of my hon. Friend the Parliamentary Under-Secretary of State for the 558 Environment. He, too, is often much attacked. Indeed, my right hon. Friend the Prime Minister is unfairly attacked. It is often said against her that she employs only people who agree with her and that she wishes only to employ from within the Tory party those who broadly share her prejudices. But in my hon. Friend the Under-Secretary of State we have an old-style Macmillan paternalist. As he often says when he goes around the local authorities, he believes in both social and, on occasion, racial engineering at the taxpayers' expense. It is thus grossly unfair to attack him and my right hon. Friend the Prime Minister in the way that I have described.
The urban programme, for example, has vastly expanded and is often an embarrassment to Tory councillors. If it is proposed to set up, say, an Afro-Caribbean centre and Tory councillors modestly point out that that seems to be a form of reverse discrimination, which on the whole the Tory party appears to be slightly against, Labour councillors can retort, "Not so — Sir George Young is wholly in favour, as are the Prime Minister, the Government and the Tory party". It is unfair to attack the Prime Minister for alleged bigotry when the Government provide taxpayers' money for schemes of that kind.
Hon. Members have only to consult page 116 of the public expenditure White Paper to see the extent to which, under the Government's allegedly tight monetarist policy, the urban programme has expanded from £83 million in 1979–80 to nearly £200 million in 1984–85 and is expected to rise to £230 million in 1987–88. The urban programme and the system of buying our way out of trouble, to which all Governments on the whole subscribe, lives and flourishes most generously and well under the present Administration, so the attacks that I have described are misinformed and unfair. The Government have not followed the logic of their rhetoric to any substantial extent. They have not tried to free labour markets.
The hon. Member for Wolverhampton, South-East rightly said that Wolverhampton had always been a town of immigrants, and the hon. Member for Wolverhampton, North-East (Mrs. Short) intervened to comment on the way in which the Irish have come to Wolverhampton.
§ Mr. Budgen
If the hon. Lady will be patient, I am about to deal with the enterprise of the Asian community.
Wolverhampton illustrates the way in which a relatively free economy will grow as the population moves around. The Government, however, have signally failed to free the economy.
In this context, I was delighted at the substantial abolition of the British National Oil Corporation this week. I am glad that the Government have finally admitted that it is neither possible nor desirable to rig the oil market in such a way as to keep prices higher than would otherwise be dictated by the market. Plainly, that is good for the west midlands, which depend on heavy manufacturing industry and especially on the manufacture of motor cars.
What the Government have not done, however—and there is no sign of any intention to do this—is to make 559 it easier and cheaper for employers to employ people by abolishing the wages councils. Recent press reports, which I believe, tell us that it is proposed to take young people out of the ambit of the wages councils—
§ Mr. Budgen
—but say that the wages councils in general will be allowed to continue. That means that we shall not be giving notice in June of our intention to withdraw from the International Labour Organisation and our continued commitment to the ILO will mean that the wages councils have to stay in being for a further five years.
The hon. Member for Wolverhampton, North-East referred to my views about immigrants. The Asian community provides a remarkable illustration of how, probably by avoidance of the laws that inhibit employment, business can be expanded in very difficult circumstances. An excellent document produced by the west midlands county council low pay unit shows that the fastest growing industry in the west midlands is the textile industry, which is almost exclusively owned and worked by Asians. The low pay unit estimates that almost all wages in that industry are below the legal minima prescribed by the relevant wages council.
It has been suggested that entrepreneurs in that sector of the economy do not always obey all the provisions of the Offices, Shops and Railway Premises Act. To the extent that they disobey laws passed to protect the health of their employees I must make it plain that I regret that, but to the extent that they disobey the wages councils, which is wrong as a matter of law and thus cannot be supported, they are teaching the House and the Government a lesson. They are showing that it is possible for people to price themselves into work.
§ Mr. Budgen
Yes, of course; that is all very unpleasant. Some of the conditions in which those people work are very bad and some of the wages paid are very low. Nevertheless, even if wages are not much more than the rate of supplementary benefit, it is surely better both for the employees and for the country as a whole that people should be getting a low wage rather than no wage at all. If the alternative is the misery of unemployment and social security, people working for, say £10 more than the supplementary benefit level are doing both themselves and the country a favour.
Unfortunately, the wages councils are among the factors which prevent that—
§ Mr. Budgen
Of course the Minister does not agree. As I understand it, the Government are about to give the wages councils a further lease on life. As the wages councils currently cover about 10 per cent. of the employed population, that is no small matter.
Of course, those who are under the wages councils want to keep them. They regard them as an element of protection. That is true both of employers and employees. However, the Government, who are allegedly committed to more free market solutions, seem on the whole to shy away from doing anything about the wages councils.
560 I do not want to give the impression that I agree with what has been said by my colleagues from Wolverhampton — a town of immigrants — but it is true that the Government have also failed to do anything about rent controls. If we were prepared to abolish the Rent Acts and to have a freer market in lettings, people would be able to move around the country more freely. It would be an advantage to have a more mobile work force in the country so that people could do in other areas what Wolverhampton has done in the past.
§ Mr. Nicholas Soames (Crawley)
Would not my hon. Friend agree that until those regulations are swept away and until we have a genuinely free market not only within the United Kingdom but also within the EEC—
§ Mr. Soames
My remarks apply to the west midlands as well as to the EEC. Would we not then have an opportunity to sweep away the rigidities that are holding back the growth of the economy as a whole?
§ Mr. Budgen
I am grateful for my hon. Friend's observations and agree with them, although he and I often do not regard the problem of the EEC in the same way.
I do not believe the Government's present policy is widely applauded in the west midlands. It is no good saying that enough has been done and simply pointing to the various small schemes by which the taxpayer is trying to ameliorate the worst conditions in the west midlands.
Many people favour a massive reflation on the old-style Macmillan model. I am not among them, but I think that we must recognise that there are definite limits to the tinkering upon which the Government pride themselves in the west midlands. We must lay a much stronger accent upon free markets. There must be a distinctive approach—not necessarily a Tory approach, but perhaps an old-fashioned liberal approach—to such matters. We must free the markets. That would benefit the west midlands greatly and there would be more employment, and that is a matter of concern not just to those who claim to represent only Labour interests but to everyone in the west midlands.
§ Miss Betty Boothroyd (West Bromwich, West)
When the Prime Minister came to Birmingham she told the people of the west midlands:There is nothing inevitable about rising unemployment".That was in 1979 when there were 118,000 people unemployed in the region. Today that figure has trebled, and about 400,000 people are looking for work. Even taking the Government's own doctored figures, 36 people are chasing every vacancy. I believe that the figure is higher than in any other region. I was interested in the comments of my hon. Friend the Member for Wolverhampton, South-East (Mr. Edwards), because one person in three is living close to or below the poverty line in that great region.
In each year that the Prime Minister has been the tenant of No. 10 Downing street, 1,000 people have lost their jobs in my constituency. Today in my constituency 7,000 people are out of work, and they and their neighbours are as sick and tired as I am of being told by the Tories that we are now in the fourth year of economic recovery—or, as we have heard this morning, the fifth year.
Conservative Members who have spoken this morning must have been wearing blinkers. In the black country and 561 the entire west midlands we have yet to experience any form of economic recovery. Whole industries have been destroyed. Some of them have been listed this morning by my hon. Friend the Member for Walsall, North (Mr. Winnick). Firms that were household names have gone out of existence. The past 12 months have been the worst year on record for company failures, with 750 backruptcies and nearly 1,300 liquidations.
Hon. Members have had a chance in the past 48 hours to study the latest "Labour Market Trends". They will have seen that the Manpower Services Commission concludes by stating that it does not see any chance of radical improvements in the region in the coming year. The MSC's findings are to some extent borne out by the CBI, which tells us that the recent rise in interest rates will add another £540 million to industry's repayment costs.
I do not know where the Under-Secretary of State has been in the past few weeks. He has been doing some very selective reading about the CBI's views. There is no doubt that high interest rates can only mean further regression as investment plans are dumped as a result of the Government's bungling over the sterling crisis.
Even the all-party Treasury and Civil Service Select Committee, reviewing the slump in sterling and the leap in interest rates, found itself criticising the ambiguities of the Chancellor of the Exchequer. Few of us need reminding of its caustic comments. It reported:had the Chancellor been more explicit about his concern for sterling … events might have turned out more favourable.How true. The Chancellor's antics could hardly be less favourable for industry and employment.
The west midlands director of the CBI has said that the Chancellor's antics have brought unwelcome news for west midlands industry. At a time when many companies were trying to invest their way into recovery, Mr. Cran, the regional director of the CBI, who was mentioned by the Minister this morning, went on record as saying:I see many small and middle size companies now scaling down their plans or postponing them altogether because the repayment cost is just too high".The Under-Secretary of State seems to have been hiding himself under a bushel and doing some very selective reading in the past few weeks.
The west midlands has often been referred to as the once great powerhouse of Britain's economy. It takes a special kind of incompetence to turn such a region into a wasteland, but the Government have finally managed it.
In the many debates about the region over the years, some of us have shown that there is an alternative to the strategy of decline and decay pursued by the Conservative party. Today is no exception. Now, bodies and institutions outside the House have caught on to the fact that the Government's policies have failed, and they too are exposing that fact and are joining us in pressing for alternatives.
Only at the beginning of the year there was an illustration in the National Economic Development Office report which warned Ministers in uncompromising terms that Britain's infrastructures had been allowed to deteriorate so badly that there was a critical need for repair and renewal. The report argued for major increases in expenditure on roads, sewerage, housing, schools and hospitals. That is nothing new to the Opposition—we have been saying it for a long time. My right hon. Friend 562 the Member for Birmingham, Sparkbrook (Mr. Hattersley) and I launched Labour's plan for jobs four years ago in Birmingham, and we made the same points then.
Nowhere is expenditure more crucially needed than on housing in the west midlands. That region has 288,000 houses in the private sector in need of urgent improvement, more than half of which are in need of major repair. In addition, 162,000 local authority houses have serious defects and 110,000 families are on council waiting lists, with a further 10,000 people classified as "homeless". Despite that critical need for homes, new starts in house building in the private sector have fallen. Because of the scale of cuts in housing expenditure during the past six years, fewer than 5,000 new houses are under construction, compared with a rate of 16,000 during the Labour Government's last years in office.
I am delighted that the Under-Secretary of State for the Environment is here this morning; he is very assiduous in these matters and very concerned about housing. I look forward to hearing what he intends to do about housing in the west midlands. If Conservative Members had any shame, they would run for cover at the mere mention of the report published two weeks ago by the Building Employers Confederation. It is a stinging indictment of Government housing policies. It makes it absolutely clear that new house building is lagging far behind any reasonable assessment of need.
It is typical of this Government's attitude that those in most need are those who have been hardest hit. We estimate that in the west midlands £360 million is needed annually to make a significant impact on the increasing rate of deterioration in housing stock. Yet in the current financial year our resources for housing were cut to little more than £180 million—that is, half of what is actually needed. That savage reduction in housing expenditure is nonsense—not least if we look to the future and make plans. By the 1990s, 164,000 new homes will be needed, with a further 10,000 by the turn of the century.
I wonder what message the Minister and the Government have today for those families in need of a home and for the building firms that are going bust. What message do they have for building firms, three quarters of which are working below capacity, and the thousands of construction workers on the dole? At the last count, in 1982, 35,000 construction workers in the west midlands were on the dole—and that was before the Government stopped calculating the figures industry by industry. Since then, we have not been able to discover the figures—and that is another of the Government's methods to cook the books. The need is there and the resources are there. We even have a stockpile of 430 million bricks. What we do not have is a Government with the political nous to bring all the resources together to meet the need.
I want to spend a few minutes discussing the water industry, which is another area of neglect criticised in the NEDO report. Many hon. Members may have heard the news this morning about the crumbling sewers in Bournemouth. Imagine what the sewers are like around the old black country towns of the west midlands, which has 22,000 miles of sewer, of which 10 per cent. are more than 100 years old and the remainder more than 60 years old. They represent huge assets essential to support the industrial and social structures of that region. They must be renewed and not allowed to deteriorate.
The same applies to the replacement and relining of old water mains. We need expenditure of about £10 million 563 over the next 10 years just to cope with the most urgent work. Yet the Severn-Trent water authority's report shows that capital spend now is 60 per cent. less in real terms than it was 10 years ago. Even the "kitchen sink economists" must know that the longer we delay tackling renewal and repair, the more it will cost disproportionately to put things right.
§ Miss Boothroyd
The hon. Lady misses my cynicism —she will catch up with it one day.
I want to make some proposals about the motorways which are so important to the west midlands. At long last the Government have awarded us assisted area status—albeit second-class status. At least it means that the black country route can proceed, and that is welcome. We hope that it will make the area more attractive to industry, even though I understand that it will not link up with the M5 for another six years.
If the Government regard the efficient movement of goods as a vital link in the chain of economic regeneration, they cannot fail to recognise that there is still a great deal to be done. The opening of the M180 has improved communications to the east coast, especially to the port of Immingham. However, it is a matter of considerable concern to industrialists and local authorities alike in the black country that there is very poor communication with the haven ports of Ipswich, Harwich and especially Felixstowe, which is the fastest growing port serving the European Continent.
The Opposition have made proposals in many debates that we felt would go some way towards assisting recovery in our region. However, when we do so we tend to be accused by the Government and their supporters of throwing money at problems. Yet last year alone, the cost of unemployment benefits and tax loss to the Treasury was about £16 billion. It is the Conservative Government who are the big spenders, because unemployment is the biggest spender of all.
The Government consistently fail to distinguish between capital spending and current spending. We need spending for investment, yet the Government always fail to make the crucial distinction between money for investment and money for consumption. I fear that they may do so again next Tuesday in the Budget. They are past-masters in discouraging investment and in promoting the merits of tax cuts. We look for positive steps to stop the rot throughout the nation and to stop the rot in the west midlands. We want to regenerate and revitalise our region. We need to give hope to the people living there.
§ Mr. Roger King (Birmingham, Northfield)
I have listened with interest to Opposition Members, especially the hon. Member for Walsall, North (Mr. Winnick), who unfortunately is not here, so I shall leave my comment on his area until later.
I always find it difficult to understand the Opposition's venom on unemployment, as they played a major part in creating some of today's problems. I refer to the lunatic decisions of successive Labour Chancellors—or was it the one who presented 13 budgets? — and their determination to tax jobs. They first imposed the selective employment tax. Working in a service industry was 564 considered unpatriotic and a betrayal of everything that we stood for. When it fell flat on its face, Labour had the impertinence to put a major tax on jobs in the form of the national insurance surcharge, which played as big a part as anything in the shake-out of the latter 1970s. I know, because I remember dealing with many companies which examined the number of their employees and said that they could not afford to employ that number if they could get a machine to do the job.
I do not accept criticism from the Labour party about unemployment, because it played a substantial part in creating it. Moreover, I do not accept criticism about unemployment from anyone anywhere when they drive a foreign car; nor do I accept any criticism concerning Servis washing machines from those who have not bought one. We are on our second and they are wonderful products. Servis is in difficulties only because so many people insist on buying foreign goods.
The Opposition's attitude is, "Stop the real world, we want to get off." They believe that Britain reigns supreme, that we should create everything we want and to blazes with the rest of the world. Week after week they tell us to give aid to the Third world but, given the opportunity to do something for the Third world, they say, "Do not give them jobs or anything to make to be exported to the developed West, thus enabling them to create their own wealth." We are supposed to give the Third world only food and largesse. We are not allowed to give anything that might possibly be at the expense of Britain. We are all good Socialists here, say the Opposition, but to blazes with the rest of the world. I utterly reject that attitude. I want every country to be able to create wealth and not to have to depend on handouts from the rest of us.
Much of what the Opposition have said harks back to the days of empire when we had a captive market where we could sell our finished goods for raw materials. It was a cosy arrangement. As the empire went its own way, we discovered that it wanted to make many of those products itself, and we now find ourselves alone. Far too many' of us have failed to appreciate that we stand alone and that we can survive only by creating wealth from our own resources.
§ Mr. King
No. Time is limited and I know that many Opposition Members wish to speak. There are grounds for optimism in the west midlands. We have gone through a period of change and tumult because many of the industries that have been supported for a century or so are no longer required. It is no good bemoaning the fact that Cradley Heath was the capital of Britain's, and at one stage the world's, chain industry. Shipping is in decline and one large ship can now do the work of 12. It is obvious that the demand for chains has fallen. It is not the Government's fault that the industry has fallen on hard times; it is just the way in which the world evolves. If we do not understand that, we shall never be able to tackle the challenges that it presents. We cannot seriously believe that we shall have a chain industry in Cradley Heath for ever and a day.
There are grounds for believing that the level of redundancies of the past few years is beginning to diminish. Indeed, the number of redundancies grew by only 1.1 per cent. in 1984. That shows that the worst might 565 well be over. Moreover, in the nine months to December 1984, the number of job vacancies rose. In Birmingham, they were 17.2 per cent. higher than in the previous year, which represented a 23 per cent. increase on the year before that. In Walsall, there has been a 6.6 per cent. increase in registered job vacancies.
§ Mr. Nellist
Would the hon. Gentleman like £1 for every time that he has heard the Prime Minister say that unemployment is bottoming out on reaching a plateau or that we have turned the corner or that the economy is getting better? Does he agree that the increase in unemployment figures has slowed down in the past couple of years only because of the massaging of the dole figures, such as the removal from those figures of men over the age of 60, youngsters forced on to youth training schemes and women who are denied the right to claim full benefit?
§ Mr. King
Jobs will continue to change as the industrial base changes. It is a constant process. My right hon. Friend the Secretary of State for Employment is always telling us how many people are unemployed and Opposition Members keep asking us how many are unemployed. Rarely do we ask how many jobs have been created and how many job vacancies there are. Most people believe that the number of vacancies is a fair indication, though not the only one, of whether the problem is being tackled and whether there are grounds for optimism. On that basis, there are grounds for optimism in the west midlands. There were no fewer than 117,392 job vacancies in the west midlands in the nine months to December 1984. We should not ignore the fact that jobs are being created, punch drunk though we might be from 10 years of redundancies.
The Government's initiative in giving intermediate status in regional aid to the area is to be applauded. It is long overdue, but what my hon. Friend the Minister said about the number of applications is encouraging. Business men are generally buoyant and optimistic that activity in the area is picking up. Only yesterday we heard that Swan Brand, the well known manufacturers of kettles and steam irons, is pulling out of Hong Kong to bring its entire manufacturing capacity back to the west midlands.
§ Mr. King
The hon. Gentleman complains about cheap labour. One minute he wants jobs but when they are being brought back from the far east that is denigrated. I believe that it is to be applauded.
One of the problems is that we do not know what is and what is not British. Last weekend, I responded to the wishes of my wife. She said that in my long absences down here she wpuld welcome some soft melodious music. We do not have a decent stereo record player or tape deck so we went to see what was on offer. There were several British makes such as Fidelity, but there was no indication of whether they were British or how much of them was British. I wanted to buy British—I always have done whenever possible, not at any price but because I understand the relationship between buying British and creating jobs. It is difficult to establish that relationship in far too many goods.
I recently went to Glasgow to look round a subsidiary of a national company in an Industry and Parliament Trust 566 operation. The company was bemoaning the fact that the Navy was thinking of fitting equipment from a Norwegian or German shipyard to new destroyers. Its representatives said, "Should it not be the Government's policy to buy British?" I said, "Indeed it should be, wherever possible, because taxpayers' money is providing the equipment." Then I looked outside and saw their brand new cars parked there. I said, "I see you have three Vauxhall Carlton cars." They said, "Yes, we buy British as well." I said, "You are wrong. It is a Vauxhall badge, but the car is made in Germany and is no more British than the German stabiliser unit for a naval destroyer." They had no idea that the cars were made overseas. We could go a long way to helping ourselves by marking British goods in our shops.
Many industrialists have told me that a great problem at present is a shortage of skilled labour in the west midlands as the economy picks up. We have failed to tackle that problem. The hon. Member for Walsall, North mentioned the closure of skillcentres. I am not one for creating crystal palaces of skillcentres if the alternative is to train more people where it matters in the front line of industry. Instead we should fund job creation and skill-training schemes in industries that are willing to offer successful training schemes.
My one criticism, which I have mentioned many times, is the shortage of essential apprentice schemes. I never hesitate to repeat the story that when I started as an apprentice about 25 years ago, I was paid what in today's terms would be £18 a week. Now apprentices receive more than £50 a week. In Germany, apprentices' pay is only 20 per cent. of adult pay; in Britain, it is 60 per cent. It is hardly surprising that we are not training enough apprentices.
When Jaguar tried to take the initiative and bring in about 200 apprentices, the unions objected. Jaguar said, "We can afford this training scheme, which we believe is essential, only if we can pay apprentices a wage that we can afford." The union said, "No deal," so no apprentices were taken on. The tragedy is that scores of youngsters who would have had a sound training have been denied it by a system that insists on certain rates of pay and nothing else. We must examine the payment of apprentices and try to introduce a scheme whereby industry can afford to take on many more.
Another way in which we can help ourselves is by moderating wage claims. If we reduced wage claims by 1 per cent., or even kept them in line with inflation, we could create about 1 million extra jobs during the next two years. That is a critical factor in industrial costs that compares badly with our competitors.
§ Mr. Nellist
The hon. Gentleman talks about reducing wages, and he mentioned youth wages earlier. Does he accept—it has been confirmed by the Department of Employment — that under this Government wages for school leavers, compared with adult rates, have fallen by 8 per cent. for boys and by 12 per cent. for girls but that youth unemployment has trebled? What is the relationship between cutting youngsters' wages and creating more jobs for them?
§ Mr. King
The hon. Gentleman should have heard me say that an apprentice today can command £50 a week compared with about 18 a week 25 years ago. I would say that it is not enough to knock 8 per cent. off £50. That will not price apprentices into training schemes. The essence 567 of a training scheme is that youngsters go there to receive training. They should not expect to take out a deposit on a Honda motor bike or buy a Sony Walkman with their first pay packets. I could not do it, nor could many in my generation, or even older, when they started training. I do not want people to go without or to starve. I do not want a system of slavery. I want to get people on the bottom rung of the ladder into worthwhile jobs, but until we can get them on the bottom rung of the ladder they cannot start to play their part in the creation of wealth.
I applaud the small business initiatives set up by the Government. In 1983–84, about 400 companies received £75 million from 10,000 investors. Unfortunately, not all those businesses were in the west midlands, but no doubt many were. The package of initiatives introduced during the past few years recognises the important role of the small business.
Irrespective of the role of small businesses, our traditional industries in the west midlands still have a major role to play. It is a tragedy that the recent coal dispute played a major part in shedding yet more labour in the west midlands. The National Coal Board is one of the biggest purchasing authorities in Britain. If an industry does not work for 12 months, orders for supplies will not come to manufacturers and suppliers in the west midlands or anywhere else. Small wonder that jobs have been lost in that sector.
If that was not enough, a possible railway dispute is looming. The railways board announced £1.1 billion-worth of investment, which gives the lie to the suggestion that we are not interested in the infrastructure. One more strike, which will have devastating effects similar to those caused by the coal dispute, during which the railways board lost £250 million in income, will mean almost certainly that firms such as Metro Cammell in Saltley in Birmingham will not survive. The board will be unable to order the diesel rail cars that that company was hoping to make. Those are the facts of life. If there is a long rail strike, investment will not take place and suppliers to industry will be in difficulty. Opposition Members may say, "That has nothing to do with it", but I believe that it has everything to do with it.
Metro Cammell's subsidiary, Metro Cammell Weyman, produces buses. Here there is a problem. It is a major supplier to the bus industry, and, as we all know, for about a year the Transport Bill, which I believe has much merit, has tended to blight the bus manufacturing industry. I should welcome an initiative by the Government to reintroduce bus grants—perhaps to firms buying more than 20 buses — on a temporary basis, thereby enabling manufacturing to continue in that industry, which is vital to the area.
The motor industry provides about 5.7 per cent. of manufacturing jobs in the west midlands, and about a third of workers in the car industry as a whole work in the west midlands. There is great optimism in that industry. It is the tow industry that can pull the west midlands out of the recession by creating jobs not just in car manufacture but with suppliers. There is no doubt that the Austin Rover group has been extremely successful after investing £550 million in the west midlands area.
We all know the catalogue of achievements by Jaguar, which only a few years ago was bankrupt. It had clapped-out products; it was a disgrace to British industry and a typical example of everything that had gone wrong. It had a good basic product, but it was slapped together by people 568 who had no motivation to do anything else. Since it was rescued from bankruptcy, output has doubled and the optimism of management and employees is unparalleled. What an asset it is to Coventry, which we usually hear described as an industrial desert. It is a shining jewel, achieving global sales of unprecedented proportions that it could only have dreamed about a few years ago. Just down the road, Talbot Peugeot is implementing a new model programme and will shortly announce a new car, which should do well in the United Kingdom market.
More Austin Rover Metros were sold in February than any other model. The arrival of the Rover 216—the Honda derivative, which is now almost 80 per cent. made in Britain—to supplement the Rover 213 means that more workers have been taken on. At Longbridge alone, about 1,000 new jobs have been created during the past 12 months.
The way forward is to produce products that people want. When Austin Rover eventually returns to the American market, which it had to leave a few years ago, I hope that productivity and the number of vehicles sold will increase accordingly. Only a few years ago, the company exported about 60,000 sports cars to America, which would represent about 12 per cent. of present production. If only we could get a fraction of that market back, there would be even more jobs and opportunities for people in the west midlands.
I look forward to 1987 when the new Rover "XX" is produced. I hope that it will be called MG, because "You can do it in an MG", as we used to say. The Americans might remember the advertisements with a picture of an MG in all the magazines and journals years ago. The new advertisements could state, "Your dad did it in an MG, now you can." That would be a good advertising line and I hope that it will be followed. Every car sold in America means more jobs for the west midlands.
There are enormous opportunities for industry in the west midlands, but there are many problems. The market for the car industry is heavily saturated. About 40 different companies are fighting for a market share in the United Kingdom, with about 800 different models. Competition is unparalleled. There is no easy solution. The Government cannot do anything to ensure that people buy British. They will buy British only if they think that it is the best—the best quality and design and available at the most competitive price. Alas, patriotism does not influence many people when they are purchasing something, although it plays a part for me.
The opportunities exist, but there are clouds on the horizon. The industry faces competition and other problems. Spanish imports cause one problem. An unfair number of Spanish cars as well as foundry products are imported. The traffic is one-way.
European legislation to clean up exhaust systems causes another problem. The Germans want to go it alone with catalysts. It is not possible to fit catalysts to Austin Rover cars because of the design of the cars and the engines. Yet one of the growth markets for that company is Germany. It has tied up with a chain of supermarkets so that it can sell cars in supermarkets. That project will be in jeopardy if the Germans insist on responding to the green parties and adopt a policy to clean up exhaust systems which is highly suspect and has not yet been totally proved in America or anywhere else.
We have to stand fast as a country and insist that our markets are not jeopardised by unilateral decisions taken 569 in European Community states. We shall pay the price if we do not stand firm. I wish that we could stand up for the motor industry as we do for agriculture.
A few years ago I was a customer of a small company in Walsall called Circuit Coatings. Two gentlemen ran that company and had done for a number of years. It was a small company performing a useful service. It went through a period of change as the product line and service changed in response to the market. The two gentlemen seized the initiative and invested as much as they could. However, eventually they could not accommodate the demand for their products and service. They needed to invest more, but that was beyond their resources. Just at the right time, regional aid became available. They made an application and their company is one of the first half-dozen to have an application approved.
I rang the firm this morning and I could hear the operators installing the plant ready for commissioning on Monday morning. That firm is about to double its capacity. The initiative was taken and a partnership formed with the Department of Trade and Industry. Without that aid, only a modest amount could have been invested in that firm. The top-up grant allows something better to be purchased.
§ Mr. Bruce George (Walsall, South)
I suggest that the hon. Gentleman rings Rubery Owen, GKN, F. H. Lloyd, or Charles Richards in Darlaston, because their phones will be silent. Their factories are no longer there. The hon. Gentleman should paint a more complete and true picture.
§ Mr. King
That makes my point. I used to deal with Rubery Owen years ago. I used to walk through the aircraft hangars and see the archaic machinery. That company was bamboozled by foreign imports because it did not modernise fast enough. That is a life and death example of what has gone wrong in the west midlands.
Management and union have been complacent. The tragedy is that successive generations of youngsters who would have got a job at Rubery Owen or somewhere similar are denied that opportunity because of the mistakes of their fathers and grandfathers in terms of union-management relationships.
The small firm to which I referred will now take on 15 more workers. In Walsall that is a small step forward. The first new employee starts on Monday morning. It is one tiny step for Walsall but certainly one major step forward for industry.
§ Mr. George Park (Coventry, North-East)
I am grateful to my hon. Friend the Member for Walsall, North (Mr. Winnick) for giving us the opportunity to discuss the west midlands once again. I had not realised that the Minister would reveal his ambitions to be a Gipsy Petulengro and give us answers before he had heard the questions. I suspect that media coverage has much to do with that.
In previous debates on the west midlands Opposition Members have been accused of talking down the region. We have been accused of that again this morning. All that we have done is to state the facts.
It is a fact that in June 1979 in the Coventry travel-to-work area 15,159 people were unemployed—that is 6.2 570 per cent. In the same area—I stress that, because the travel-to-work area has been altered—in January 1985, 37,388 people were unemployed—or 15.7 per cent. The figures are not realistic because they have been massaged. Nearly half of the total are long-term unemployed and 5,000 have been out of work for over three years.
Bad as those figures are, in parts of my constituency the unemployment rate is as high as 34 per cent. The granting of intermediate area status is welcome, although a long time in coming. What we may get will be at the expense of other areas.
Coventry and the region have made, and are making, strenuous efforts to pull themselves out of the disastrous position in which Government policies have put them. The west midlands enterprise board, an offshoot of the much-maligned county council, is already the largest source of risk development capital, with £7 million invested in 24 firms ranging from clothing manufacturers to welding robotics companies. Only this month the board joined the merchant bank, Lazard Brothers, to launch a unit trust scheme which could lead to about £10 million being invested in the west midlands.
When I asked the Secretary of State for the Environment what would happen to such initiatives, if and when the county council is abolished, he said that the district council would be able to pick them up. A choice part of his reply was that district councils could increase their rates to fund such initiatives. Apparently somebody had forgotten the rate-capping proposals.
About 14 months ago the West Midlands Industrial Development Association was set up, in co-operation with private industry, local authorities, chambers of commerce and Government agencies, to attract inward investment, and the targets which were then set have been met. The county council and Aston university, as a joint venture, are setting up a technology transfer centre to promote the transfer of high technology in local industry.
The Coventry business centre provides a source of free, independent, expert advice to budding entrepreneurs and the owners and managers of small businesses already in existence. The Warwick university science park provides a base and facilities for individuals and companies to develop new projects, which can then move on to the former site of the Talbot design centre, which has been purchased by Coventry city council.
Those are some initiatives that have been taken to help ourselves, apart from the efforts of individual local authorities through their development committees and chambers of commerce. The list is not exhaustive, and I have not mentioned the national exhibition centre or Birmingham airport, both of which generate jobs and industry.
Much of the effort is long-term and although the Government set great store by the creation of new small businesses, it would take many small businesses to put back into work the 22,000 who have lost their jobs in Coventry since the Conservatives came to office, leaving aside the high rate of bankruptcies. These people cannot be left to rot until the initiatives that I have mentioned come to fruition. Something must be done much sooner than that.
The city council, apart from the huge backlog it has on council housing, desperately wants to tackle the problem of 17,000 substandard private sector dwellings by increasing the annual programme of investment improvement grants from £2.3 million to £5 million. However, we 571 know what happened last Wednesday, when the Government — in the teeth of objections from their supporters and the opposition of local authorities, Labour and Tory—pushed pushed through further restrictions on the spending of capital receipts, with callous disregard for the human consequences in terms of employment and the recovery of the region.
The effects of this further squeeze, to meet some arbitrary cash limit enshrined in the public expenditure White Paper, will be wide-ranging. In education, the Lanchester polytechnic in Coventry needs major investment for equipment if it is to give additional training in high technology. A £1.5 million programme over four years is now threatened. If schools are to be rationalised as pupil numbers fall, additional expenditure will be required on some sites supported by receipts from the disposal of others. Capital restrictions will prevent Coventry from achieving a better and more efficient education service.
I referred to the science park at Warwick university. If it is to continue to develop the whole site, further major investment is needed. The city's power to make progress will be halved by the action taken last Wednesday, and the examples that have been given of threatened projects are not frivolous; those projects are essential to the recovery of the city. Some of them would reduce revenue expenditure in the medium term, which must be desirable, even within the Government's limited terms of reference.
Another disaster has been the housing benefit scheme. In Coventry, the administration of the scheme cost ratepayers £140,000 in 1984–85 and will cost them £260,000 in 1985–86 and £120,000 the year after that. The Government claim that they have saved the cost of 56,000 civil servants. That is a hollow saving, which transfers costs from Whitehall to local authorities and, at the same time, adds to the dole queues.
Besotted with the dogma that all public spending is, by definition, wrong, the Government fail to take account of changing work patterns in Coventry. A recent study by Coventry Workshop, a local resource centre, highlights the dramatic changes that have taken place in the last decade. Ten years ago, two thirds of the people at work in Coventry were employed in manufacturing. Tens of thousands of those jobs have disappeared and, for the first time in 50 years, only a minority are now employed in manufacturing.
Today, two out of every five people depend on central or local government for their jobs. Central and local government directly employ 20 per cent. Other public employers and nationalised industries bring the figure to 30 per cent., and 9,500 jobs in private firms rely on Government spending or investment. The study concludes that 37.4 per cent. of Coventry's work force depends on the state for their jobs.
It follows that, in their relentless campaign against public spending, by cutting grants to local authorities, rate capping, reducing the amount of capital expenditure, transferring costs to local authorities and needlessly increasing the price of gas, electricity and water, the Goverment contribute directly to the ever-increasing totals of the unemployed. As the hon. Member for Birmingham, Northfield (Mr. King) said, it is ironic that in the current issue of the Coventry chamber of commerce newspaper it is stated that 572in spite of the high unemployment levels, there are vacancies in industry that cannot be filled because there are not the people available with the skills required.At the same time, the Government are closing skillcentres and imposing a moratorium on funds for high technology. The two just do not go together.
The Minister may refer to the new training initiative. I will only say of that that the scale of the need is far greater than the response so far. If the Government were serious in their wish to lift the region out of its current slough, they would stop relying on simplistic slogans about competition, as though that were the total solution. It has a part to play, but the Government could take some of the initiatives that are open to them.
The Department of the Environment could increase the funding for derelict land grants to enable more development to take place. Coventry was turned down flat when it wanted to develop an old gasworks site. The Department looked at the city as a whole and said that, overall, there was not much derelict land in the area where the city wished to develop that new industrial site.
Section 137 of the Local Government Act 1972 could be amended. That is the tuppeny rate provision, which is used by many local authorities to fund their economic development schemes. The value of that tuppeny rate is fixed in relation to 1973 rateable values, with no allowance for inflation, so that the real expenditure that is possible is falling.
The Department could ease the conditions attached to grants under the urban programme. At present, these grants are not available to new and large firms. That reduces the scope of the scheme and its usefulness. The Department could restore the cuts on housing, as my hon. Friend the Member for Walsall, North pointed out.
The Department of Education and Science could exert pressure on the Department of the Environment to ease restrictions on capital expenditure although I do not suppose that it will do so. This would permit training schemes to adapt and expand to meet industry's needs and to rationalise the schools' structure. The Department of Transport could support a new route from west midlands to the east-coast ports, which would help trade. It could support the planning stage for the completion of the north-south road at Coventry, which would relieve congestion and open up new industrial sites in my constituency.
Next week the Chancellor of the Exchequer could take action on the disparity between export-import tariffs on cars to and from Spain. The issue has been raised on many occasions and the right hon. Gentleman is well aware of it. The unique sales tax on motor cars could be removed. Its removal would have a beneficial effect throughout the region. I hope that the Chancellor will not, as has been rumoured, impose VAT on new commercial and industrial building work. Its imposition would bear heavily on the west midlands, where land values and rentals are low.
I have mentioned a few of the actions that could be taken to assist recovery. If there is no response, Ministers' expressions of concern over unemployment, bad housing and lack of adequate training will be seen by the people of the west midlands as the shedding of crocodile tears.
§ Mr. J. F. Pawsey (Rugby and Kenilworth)
I listened with interest to the speech of the hon. Member for Coventry, North-East (Mr. Park) and agreed with him on several issues. He was right to draw attention to the need 573 to improve communications between the west midlands and the east coast ports and to hasten the construction of a new stage of the M40. I agreed with his comments about the Coventry business centre and Warwick university's science park. It is interesting to contrast his thoughtful speech with those of his hon. Friends, which have been laden with gloom, doom and despondency. They have suggested that we live in a time when there is no hope, and that is far from the reality.
I was intrigued by the remarks of the hon. Members for Walsall, North (Mr. Winnick) and for Wolverhampton, South-East (Mr. Edwards) about investment abroad. Surely they recognise that from investments abroad will come profits which will be reinvested in our economy. These profits will produce jobs within the region. My hon. Friend the Member for Birmingham, Northfield (Mr. King) drew attention to the results achieved by exporting capital abroad and by encouraging overseas countries to manufacture, which will enable them to strengthen their own economies. Surely it is better to provide them with the means to establish industry and to acquire skills rather than letting them remain dependent on food handouts.
I shall address myself principally to the economy of the west midlands and to employment. Unemployment is a major problem and is not confined to the United Kingdom or the west midlands. It extends thoughout the western world. All western nations have increased levels of unemployment, but the major difference between the United Kingdom and other western countries is that we are creating jobs faster than our European competitors.
We are increasing the number of jobs by about 1 per cent., whereas the increase in Germany and Italy is 0.4 per cent. In France there has been a 2.9 per cent. decrease in the number of jobs and in Spain a decrease of about 3 per cent. In the EEC as a whole, the number of jobs is declining by 0.6 per cent. That contrasts with the Government's measures, which are starting to work, albeit from a fairly low base.
Despite Labour Members' speeches, the news is not all bad, and I draw attention to the good news in the west midlands. Unemployment is a major problem, but it did not start in 1979. That issue was taken up by my hon. Friend the Member for Rossendale (Mr. Trippier), the Under-Secretary of State for Trade and Industry. He was right to remind us that unemployment doubled under the Labour regime. The reasons are well known: a recession that affected western Europe, poor and complacent management, trade union intransigence and Government interference. We were overpaying ourselves and we experienced the new industrial revolution with its microchip and robotics.
Things are beginning to change and I am not as pessimistic as Labour Members. I have confidence in the inherent ability of midlanders. The qualities which forged the first industrial revoultion still exist for the beginning of the new industrial revolution.
§ Mr. Pawsey
I am grateful to my hon. Friend for that note of assent. It would be easy for companies and industries to follow Labour Members and collapse in a welter of gloom. The position is not as bad as they have sought to paint it. The majority of companies and industries in the west midlands have risen to the challenge 574 that faces them. They are facing the problems that confront them. They have diversified, increased productivity and developed new markets.
My constituency has one of the heaviest of industries in the region in the form of the turbine division of GEC. That division has not enjoyed a home order of any size for years but its future and prosperity have been based on winning orders from abroad. The order from Hong Kong was the largest single order ever, worth £600 million. The division wins orders because it is competitive and efficient. It has a skilled work force that is allied to good management, and that management has invested consistently in new machines, new equipment and new methods.
The turbine division of GEC is not unique. As my hon. Friend the Member for Northfield said, Jaguar has not done too badly. It has been helped by a favourable exchange rate and good models. It has a skilled work force with confidence in its management. British Leyland also seems to have turned the corner. It has better products, higher productivity and improved quality.
Later in the year, a new Talbot motor car will be made at the Ryton factory in my constituency. Improved productivity and better quality should ensure sales of the new model. However, Talbot has a problem; it is dependent on the supply of completely knocked-down models to Iran. Unfortunately, Iran does not always pay as promptly as it should, and from time to time serious cash flow problems are created for the company. It has received some assistance from the Department of Trade and Industry, but I shall be grateful if my hon. Friend the Under-Secretary of State will consider the matter again and advise what more might be done to assist Talbot.
An excellent booklet has been produced by the Manpower Services Commission. It is entitled "Labour Market Trends, Midlands Region 1985–1987". The heading "Labour Demand" appears on page 58. The first paragraph states:As expected, vacanciesin the west midlandsnotified to Jobcentres in the nine months to December 1984 which totalled 117,392 have shown a 10 per cent. increase compared with the same period in 1983. This follows a 23.5 per cent. increase over the previous year.There is more good news to be culled from the same work. The final paragraph on page 61 reads:One aspect of the labour market which did show a substantial improvement in 1984 was redundancies, with a reduction of 31 per cent. compared with 1983. Notifications so far received indicate a further reduction in 1985, although probably only a marginal one.[Interruption.] I am pleased that the hon. Member for Coventry, North-West (Mr. Robinson) can read as well as I can. Perhaps he will acknowledge the good news from this admirable work. There is good evidence of a recovery.
I should like to suggest further measures that will assist our region. Improved communications could be significantly assisted by speeding up the development of the M40 and the A1-M1 link. The M1 is clogged, dogged and bogged with traffic, repairs and problems. A new second route from our region to London and the south is urgently needed. The M40 is overdue. I ask my hon. Friend the Under-Secretary of State to turn his attention to this need and to say something encouraging and positive about it. The A1-M1 link would provide a fast route to the east coast ports for exports from our region. Those motorways would 575 provide jobs during their construction and, more importantly, would help to make our region more competitive.
The motor industry still contributes more to Britain's economy than any other industry. It accounts for about 1,500,000 jobs in total. The industry would be enormously helped by the removal of the 10 per cent. special car tax, which, effectively, is a tax on jobs. We have heard about one tax on jobs which Government have removed, and I believe it would be helpful if we removed this tax on jobs. If we did so, additional car sales of about 250,000 would be generated.
I suggest that we bring back the small engineering firms investment scheme. That would help engineering companies in the west midlands generally by improving their productivity, by allowing them to retool and by instituting new manufacturing methods to compete on a fair footing with other nations. It would also assist the machine tool industry. There is clearly a case for reintroducing that admirable scheme.
There is still far too much Government interference. Too often, new and old companies run the bureaucratic gauntlet of planning permissions, health and safety at work and job protection legislation with all the form filling that goes with running a 20th-century business. In the United States, firms employing 20 or fewer people are responsible for providing the majority of new jobs. I believe that we should do more to encourage small companies by cutting through some of the bureaucratic red tape that has built up.
I believe that, if the Victorians had had to work with the same jumble of red tape as our industries do, there would not have been the first industrial revolution. Stephenson would never have been an engineer—he would have been either a civil servant or an accountant. Although my right hon. Friends have done much to cut out red tape and to get rid of bureaucracy, more still needs to be done.
I do not doubt that all legislation is introduced for the best of reasons, but it does not always work as intended. One of my theories is summed up as "Pawsey's law of government"—nothing is so bad that it cannot be made worse by well-intentioned Ministers. We should be cutting, not creating, red tape.
Local government can help industry by creating a favourable climate in which companies can start and older companies can develop. I should like to refer to examples in my constituency. Rugby borough council has produced a range of starter units. These small units of about 500 sq ft are let without the benefit of extensive leases, red tape or bureaucracy. They are let on monthly tenancies at £25 a week. It is as easy and as simple as that. In short, those starter units are serving the purpose of the old garages, where so often new companies started. That is an effective and helpful way for local government to create new business.
Warwickshire county council has not sat on its hands either. With Rugby borough council, it has built new factories on reclaimed land and green field sites. Warwickshire county council has actively, aggressively and successfully marketed Warwickshire as a good place for new business.
I believe that the excellent booklet to which I have referred should be required reading for all Opposition Members. Referring to Warwickshire county council, page 130 states: 576County Council initiatives in providing land for high technology industries to help compensate for the decline of most traditional manufacturing appear to have been successful.The county council has been successful in promoting not only high technology and new science-based industries but printing and distribution companies, bottling plants and engineering firms. All those businesses have found homes in Warwickshire. No wonder the MSC can say:The decline in manufacturing industry with its large-scale redundancies appears to have bottomed out in Warwickshire.I should have liked to hear more of that note of hope from the Opposition.
§ Mr. Pawsey
It is perfectly true. The Opposition have said today that they have cited official statistics which cannot be wrong. I point out that similar official information is in this booklet.
I have referred to my county of Warwickshire. I appreciate the fact that Warwickshire has done better, for various reasons, than certain other counties. The science park in Warwick, which was mentioned by the hon. Member for Coventry, North-East, is proving to be a magnet to industry, so that little, if any, lettable space now remains. Its success is such that it has been drawing new companies into its orbit — companies anxious to participate in the new thinking and technologies developing at Warwick university.
§ Mr. Park
Does the hon. Gentleman agree that the science park is on a 24-acre site? Ten acres have been developed. As the hon. Gentleman said, the park is practically full. I believe that there is only one vacant space left. We need additional investment to develop the remainder of the science park, because there is clearly a demand for this facility.
§ Mr. Pawsey
Not for the first time today, I agree with the hon. Gentleman. I am sure that, when my hon. Friend replies, he will refer to the excellent science park at Warwick. It is good news for the region. It helps to motivate and generally drive forward new thinking and new technologies.
Despite the good news, much remains to be done, not least in establishing the relationship between labour costs and jobs. That point was mentioned by my hon. Friend the Member for Northfield. In the United States, real earnings have fallen and employment has risen. That is in marked contrast to the United Kingdom, where real earnings increased by 7 per cent. while in the same period employment fell by 3 per cent. That is not entirely a coincidence.
A further point that must be noted by employers, unions and Government is the clear relationship between rates of pay and the number of people employed in industry. If the implications of the American experience are understood, that will go a considerable way to ensuring that the current difficulties in the region and elsewhere will be overcome.
I should like to pursue that point a stage further as it relates to young people. In West Germany, 92 per cent. of school leavers go into work or further training. Apprentice pay is 20 per cent. of the adult rate. In Britain, an apprentice receives 60 per cent. of the adult rate. We then wonder why we have fewer apprentices than our competitors.
577 I am not the only one to have seen the MSC booklet. On Tuesday 12 March, one of our excellent regional newspapers the Coventry Evening Telegraph referred to theSpotlight on signs of recovery.
§ Mr. Pawsey
It is no good the hon. Gentleman saying, "Oh, God." He reads the Coventry Evening Telegraph, as I do. I see his letters in it from time to time. That newspaper said:Spotlight on signs of recovery. Although cautious in its predictions, the report 'Labour market trends, Midlands Region 1985–1987', claims prospects are brighter than for the past five years. And it maintains the region's economy has entered a period of stability—which could lead to a small reduction in unemployment next year.Hear that.
I sometimes wonder whether Opposition Members live in the same world. That is an impartial newspaper quoting the facts as it sees them.
§ Mr. Peter Snape (West Bromwich, East)
The hon. Gentleman need not depend upon the Coventry Evening Telegraph for such optimistic reports. He could have produced the Sunday Express, another impartial organ, edited by Sir John Junor. For the past five years it has been trying to talk up the economy, with no great success. The hon. Gentleman could produce a great deal of evidence, but none of it is impartial.
§ Mr. Pawsey
The hon. Gentleman might reflect that it is better to try to talk up the economy than to talk it down, as we have heard from the Opposition throughout this morning's debate. Why not a note of optimism for a change?
The message that I should like to leave with the House is not gloom and despondency but hope and renewal. The west midlands has the will, the skills the initiative and the drive. It has produced and delivered the goods in the past and it will produce and deliver them in the future. The west midlands is not on the way out. It is on the way up.
§ Mrs. Renée Short (Wolverhampton, North-East)
I agree with the hon. Member for Rugby and Kenilworth (Mr. Pawsey) that we must not talk down the west midlands, but I am afraid that I do not share his optimism about the progress that is being made at present. The Minister's speech was depressing. It was a turgid reading of a turgid Civil Service brief. It added nothing and it contained no hope.
The House will remember the defence of the scandalous position that has developed in part of the west midlands rag trade by the hon. Member for Wolverhampton, South-West (Mr. Budgen), who is no longer with us. The unions, particularly the Transport and General Workers Union, have launched a campaign against those sweat shops, where women are employed at just above social security rates of pay and where they work with unprotected, inadequate and old-fashioned machines, very often with small children playing around the floor. It is a disgrace that any Member of the House should defend that situation.
The Prime Minister is always telling us that we must emulate the United States; we must imitate everything that the United States does. While the pound crumbles and while our industrial areas such as the west midlands 578 crumble and decline, becoming more unattractive to industry and residents alike, although such areas are crying out for real investment in resources to improve the quality of life and employment prospects, the Prime Minister toddles along behind the American President, supporting him in his infamous star wars project while maintaining a deaf ear to those of us who have been urging action to halt the decline of British science. I am glad that the hon. Member for Rugby and Kenilworth, as well as my hon. Friend the Member for Coventry, North-East (Mr. Park), referred to the developments at Warwick. I shall enlarge on that in a moment.
The development and prosperity of the west midlands lie in the future development of industries based on science and engineering. We did not have a word about that from the Minister. Engineering of different sorts has been the basis of our prosperity in the west midlands. The progress that we have experienced, as everybody knows, was based on engineering. The famous names of the past, the pioneers of engineering and technical progress, made so many of our firms famous the world over. Sadly, many of those firms have now disappeared from the west midlands. Now we are losing some of our best university research students to America, where they are working in the forefront of science. America is getting the benefit of the work that they do—and those students were originally trained by us.
In 1965 the United Kingdom spent more on research than France and Germany, and twice as much as Japan. By 1980 we were spending less than France and three times less than West Germany and Japan. From 1965 to 1980 Japanese research grew by 17 per cent. per annum, West Germany's research grew by 14 per cent. per annum and that of the United Kingdom grew by only 3 per cent. There lies the miserable story of our decline.
In the United States basic research funding has grown by 40 per cent. during the Reagan Administration alone while here it has declined during the same period. Therefore, we are now seeing a prolonged period of massive decline in British research expenditure relative to the rest of the developed world. The Parliamentary Under-Secretary must take that on board. In spite of what the Prime Minister keeps telling us, we are becoming poorer relative to other developed countries.
In the west midlands we are continually being exhorted to place our hope in new technology, the generic term used carelessly and most of the time without real understanding of what it means in terms of investment, training, new building and marketing. One has to have all that to support, develop and market new technology. It can develop only as a result of research. It does not just materialise out of thin air. Therefore, less research spending undoubtedly means fewer new technology industries and a high level of unemployment, as we now have in the west midlands. The disaster that faces us if the present decline in research continues is very frightening.
If Japan's rate of increase of research expenditure continues at 17 per cent. per annum, as it has over the past 15 years, by 1990 her research expenditure will be 16 times ours. The situation is even worse than the figures imply, since 50 per cent. of United Kindom Government research is on — guess what? — defence. That is, of course, a far higher proportion than Japan spends on defence. The University Grants Committee has had its resources cut by this Government by about 15 per cent., and the Social Services Select Committee has reported to 579 the House on the serious aspects of that policy in connection with medical education. That also affects our standing and our policies for research and employment in that area.
So if we are to have any chance of reducing unemployment in the west midlands, more resources must be directed into science and engineering research. How much money will be directed into that? We are in a grievous position, because of the Government's refusal to understand these problems — although, goodness knows, Opposition Members have told them about them time and again. We have pressed the matter with the Secretary of State for Education and Science and with Ministers in the Department of Trade and Industry, yet we receive no response.
Our steel industry will continue to decline, beaten by low-cost producers abroad, and unless we produce newer, better, more sophisticated steels, car bodies for the remnants of our car industry will be made of plastics and car engines will be made from ceramics. Thus, without very strong research in plastics and ceramics, there will be no car industry in the west midlands.
Perhaps even more importantly, semiconductor materials such as silicon and new ones besides will be used to develop new robotics to build computers, cars and anything else that one can think of. Yet last year the Science and Engineering Research Council spent £50 million on nuclear physics research, £40 million on astronomy but less than £4 million on materials research. Only 1.7 per cent. of SERC's expenditure was on that. That miserable level of support for scientific research as a whole has meant the loss of many brilliant researchers, scientists and engineers, who have for the most part gone to the United States and are working for Reagan's benefit, not ours. That is absolutely crazy.
Only yesterday I received a letter from the Post Office Engineering Union in Wolverhampton, which covers the whole of the black country. It reminded me that British Telecom, along with the British telecommunication equipment manufacturers, had recently researched and developed the digitial exchange now known as System X. It is very good, and has been hailed throughout the world as one of the most technically advanced systems and as the foremost on its field. It has been welcomed as a technical success and for the benefit that it will bring to the British telecommunications industry and its export potential. Thus we are talking about a marvellous new technology development that we could export.
BT has recently announced its intention to invite tenders for an alternative digitial exchange system known as System Y. Guess who BT has invited tenders from? They have been invited from three sources—all of them foreign. They have been invited from Ericsson of Sweden, Philips of the Netherlands and Northern Telecom of Canada. If the Minister knows about that, he will no doubt say that they all have British subsidiaries here. But the important point is that the investment in research, and, even more importantly, in technological developments, will remain in Sweden, the Netherlands and Canada. That is absolutely scandalous.
Of course that union campaigned against the privatisation of BT and against the importation of the communications equipment of foreign competitors. During its campaign against privatisation it pointed out that we faced the danger that foreign equipment would be imported into Britain. There can be no guarantee of work 580 in the United Kingdom if such equipment is imported. The export potential from the continuing research and development of System X and advanced digital systems is dependent on a secure home market. That secure home market will disappear if important equipment is imported. It is scandalous to do such crazy, idiotic things when we have a lead in the new technology.
We spend substantially less then the United States, Japan, West Germany or France on research in higher education, industrial science and engineering. Our expenditure as a proportion of GDP is little more than half the average for those countries. That is the measure of our inability to compete.
The Advisory Board for the Research Councils has said, in its report on the science budget published last year, that it is vital that Britain's research infrastructure should be maintained in as strong a state as possible but that such research has been hit by Government cuts in the past few years and since 1980 a growing proportion of top grade proposals has gone unfunded. The loss of morale and the interruption of important research work has had a serious effect throughout the scientific sector.
In 23 important areas of science we publish well below 7 per cent. of world publications. It is extremely disturbing that with the exception of engineering, Physics, agriculture and food science and oceanography we fall below other countries in other areas of research such as pharmacy, cardiovascular research, paediatrics, surgery and acoustics. Clearly, that has implications for science-based universities such as Aston and for the Birmingham medical research centre.
Last Friday, I had the opportunity to see some of the pioneering work on cancer research at the university medical research centre in Birmingham, and I spent some time with the staff responsible for the animal research laboratories. There is no doubt at all that the work is hindered due to inadequate resources. Some of our leading scientists in cancer research work at that centre, but every penny has to be counted and their work is hampered by the constant battle for money.
Other Opposition Members have referred to Government support for the construction industry. We have had many representations, not just from the building trade unions but from the building employers' Group of Eight. The Government's neglect of that industry is astounding. As many of my hon. Friends have said, throughout the west midlands there are vast areas of old and substandard housing. Some housing in Wolverhampton was built under the earliest public housing legislation and is long overdue for replacement. The building industry constantly pleads for a more discriminating approach to public spending by the Government and for more investment in construction work to rebuild an infrastructure and thus to provide jobs. Every £1 billion spent on construction provides 100,000 jobs. It is the quickest way to inject life into our declining economy, so why do the Government not do it? Perhaps the Minister will tell us today.
Thousands of people in Wolverhampton live in poor housing. Only last Saturday, representatives of the Wolverhampton Tenants Federation came to my surgery and presented a manifesto to me and my hon. Friend the Member for Wolverhampton, South-East (Mr. Edwards). I have sent a copy to the Secretary of State for the Environment and I shall be interested to have his comments. Tenants want to be consulted about repairs. 581 They want more attention to be given to firms seeking modernisation contracts. They want no fly-by-night operators. Contracts should be given to modern firms with up-to-date equipment and a competent work force. The federation also supports the formation of housing cooperatives so that tenants can manage their own estates, control repairs and maintenance and thus reduce vandalism.
Those are all constructive, sensible ideas in line with Labour party housing policy. The National Home Improvement Council says that Britain is miserably housed, and that is certainly true in the west midlands. It also points out that public expenditure on housing today is worth only 35p in every pound compared with 1979. It states that housing has suffered the biggest cuts in spending and that there will be a shortage of half a million homes by 1986. We spend only 2.1 per cent. of GDP on residential construction. That is about a third of Germany's expenditure of 6.6 per cent. or France's 6.1 per cent. If the Government are serious about reducing unemployment and at-the same time improving the quality of life for many thousands of people throughout the west midlands, there is a comparatively simple and painless way to do so.
I hope that the Minister will tell us what the Government intend to do to help families who are living in rotten, substandard housing and to improve the quality of life of so many families throughout the west midlands. Something can be done, but resources will be needed. However, the Minister can console himself by the thought that if he invests those resources, he will reduce considerably the number of those who are claiming unemployment and supplementary benefit, and will provide jobs at decent rates of pay, which is what the west midlands wants.
§ Mr. Lewis Stevens (Nuneaton)
I have listened carefully to what the Opposition have said, in particular to the idea that 1979 was the magic date after which everything went wrong in the west midlands. It may be that everything started to go wrong for the Labour party in 1979, but that is not true of the west midlands.
I spent the first 20 years of my life in the heart of the black country. Since then, I have lived in various parts of the west midlands and worked in its industries. I remember the days when a great smoke haze hung over West Bromwich and Smethwick and never disappeared except on bank holidays. I also remember the industrial conditions of those days. Thinking of the steel industry, I remember the heat rising on the cold winter mornings and the smell of Woodbines being stamped out on the earth floor.
In those days, it was common for industry to use machinery and equipment that dated back in some cases to the 19th century. Tremendous changes were taking place in technology, but many industries in the west midlands failed to change their productive methods and their attitudes.
The west midlands possesses skills in a wide range of technologies, as well as the steel industry and plastics. People's skills are perhaps more flexible than in any other region. People can add to their skills with comparative ease, and comparatively little retraining is required. 582 However, throughout the 1950s and 1960s, the writing was on the wall for many west midlands industries. If they did not change, and change quickly, they would suffer when they had to face the pressures of competition and the market. They have suffered.
There were many reasons why things went wrong in the west midlands, as in some other parts of the country. One cannot blame everything on the policies or the strategies of the present Government. We in the west midlands got it wrong. We failed to plan for the future, and we have suffered for it. That is nowhere more true than in the car industry. In 1971–72, the United Kingdom produced 1,750,000 cars a year. We are now producing only about 1 million, yet the uptake of cars in this country is at record levels. We were not in a position to take our opportunity.
It has been said that it would be easy to put things right. It would not be easy. However, perhaps coincidentally, a development is under way that started at about the same time as the recession. It may be that the recession shook parts of industry into considering what they were doing. It was not until the mid-1970s that managements in many industries in the midlands and elsewhere began to realise that the people who worked in the industry as a whole were themselves the company and that participation was necessary among the whole work force. Some members of the trade union movement were equally obstinate and would not look at it as a joint venture. In the end, everyone relies on the results of progression, improvement and money.
The west midlands is now trying to change, but it is a slow process. Work is being carried out at Warwick, Aston and Birmingham universities, which shows the cooperation of the academic environment with industry and the community. Things are beginning to come together. Advanced manufacturing technology research is now taking place. This year at Warwick an advanced technology centre is being set up in conjunction with Austin Rover. Previously, that was a fundamental weakness in our industries. The concept of invention has always been good, but the concept of development and production has always been bad. Now, at least, Warwick university is studying advanced manufacturing technology. It may be too large a project for an individual company to develop, so the university input is needed to look at requirements for the future.
My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) and other hon. Members mentioned communications. I agree that they are vital to the west midlands. I understand that the Railway Development Society wants to reopen some of the rail network to improve communications. That deserves consideration, if not total support. I accept that there may be some snags, but it might be another way to help the communications network.
I do not minimise the effect of unemployment. My constituency suffers from unemployment as part of the Coventry travel-to-work area. Indeed, I believe that we have suffered more than other areas because this is the second time that local industry has been badly affected. Traditionally, my area relied on the railway and mining industries, but there are no longer any pits in my constituency. I remember coming to see a Minister at the then Board of Trade in the late 1960s to complain about the closure of the last pit.
However, the area recovered because the car industry was fairly buoyant. The town expanded in the late 1960s 583 and early 1970s because of the motor industry and allied trades. Yet we are now suffering unemployment again. One Opposition Member made a telling point in a debate recently. He said that no matter what the figures were, if a person wants work but is out of work, that is 100 per cent. unemployment for that person. I accept the tragedy of that statement.
My hon. Friend the Minister quite rightly said how much the Government are doing. It is wrong to ignore the effect of the intermediate area status, which will help the area. Many business people ask not for aid but only to be free of the negative effects of other people having aid. They want to compete on an equal basis. Now, at least, they will be able to do that, and that is terribly important.
Training initiatives have been brushed aside by Opposition Members. The Coventry section of "Labour Market Trends" gives a substantial list of skills in short supply. The training initiatives enable us to consider what trades are in shortage. The schemes are flexible and can help fulfil the needs.
The hon. Member for Wolverhampton, North-East (Mrs. Short) mentioned engineering and science research. There is a tremendous shortage of such graduates, but the same was true 30 years ago. It seems that successive Governments have pretended that the shortage does not exist and that industry does not care because there has been little pressure on universities to increase their number of science and engineering graduates. Indeed, many such graduates do not go into engineering. I do not know where they disappear to. Engineering should be given a high profile in education and financing. It is important that the west midlands has sufficient skilled graduates.
Warwick university has taken an initiative on an MSc integrated graduate development scheme, which has evolved with companies such as Serc, British Leyland, Lucas, Rolls-Royce and now British Aerospace, Short Brothers and Dunlop. Such involvement is a tremendous help.
I am not a protectionist, as protection will not cure the ills of the midlands, but the Government should be considerate towards companies that have spent money on development projects when they place orders. The Government also have much influence over orders—the hon. Member for Wolverhampton, North-East mentioned system X. The Government no longer have complete control over that, because British Telecom is now private. The House frequently debates where defence contracts should go. In our recent debate on the Royal Air Force, the Ministry of Defence was lobbied about basic trainers. The Government have much influence on where contracts are placed. Technical industries in the west midlands should be considered carefully and at least given some preference.
Local authorities also have a part to play with planning permission. Many parts of the black country are not pleasant. Some areas are derelict and have become available for development. The West Midlands county council and other councils should be lenient with planning permissions to enable industry to expand. The same is true for housing. Big chunks of land no longer become available for housing development — it comes in bits. Developers and councils must co-operate closely and consider how sacrosanct the fringes of conurbations near green belts should be. If we want the area to develop industrially and domestically, we must examine the procedure carefully.
584 The general concept that the economy of the west midlands will improve dramatically as production increases has long gone. Most people accept readily that the output of the new technologies does not automatically mean jobs. It may mean wealth, but it does not mean new jobs. We cannot create more jobs unless production is increased. The midlands industries must concentrate on productivity, because automatically, if productivity increases in an industry that has reasonable labour relations, more and better-paid jobs will follow.
There is still an enormous need to modernise the industries in the area, and firms must look for new ways of meeting competition. I applaud the enterprise allowance scheme, which allows the development of products that are in demand. That is what competition is about. We import so much that we must now examine carefully how our companies can compete with overseas companies. They can do it.
I am certain that the people of the black country and the west midlands are prepared to fight. They do not fight at football matches; at least when I have watched West Bromwich Albion there has not been a major punch-up. The tradition of the black country and much of the midlands is one of people working hard and earning good money, and they are prepared to do so again. They ate well and lived well. They had high standards of family life, and in the old days much of their money went on their families. The same character and determination are there. Given the opportunity, the black country and the west midlands could come out of the recession, but they need Government help in providing training, new technology and better communications. Much help is already being given, but the Government must continually develop and speed up that aid.
The west midlands was the industrial heart of England. Unless that industrial heart beats strongly again, the wealth of Britain will not increase. Without that heart beating strongly, Britain will not move forward as it should.
§ 1.7 pm
§ Mr. Dave Nellist (Coventry, South-East)
About three hours ago we heard a speech from the Under-Secretary of State for Trade and Industry which, had it not been about a matter so serious for hundreds of thousands of people in our area, would have been laughable. It was a cosmetic approach to the problems of the hundreds of thousands who are unemployed in the west midlands and of the many more people whose families must subsist at poverty levels.
Conservative Members have made many points during the debate but, given the time available, I cannot deal with all of them. I should tell the hon. Members for Rugby and Kenilworth (Mr. Pawsey) and for Birmingham, Northfield (Mr. King) that I, too, have a copy of the MSC report entitled "Labour Market Trends". If one examines the latter months of the nine-month period covered in the report, especially November, December and the first part of this year, one discovers that instead of vacancies in the west midlands increasing, they have started to decrease again sharply. It is wrong to try to paint so rosy a picture. Even if we took the report at face value, the present position is like the calm before the storm, or the last flush coming to a dying man's cheeks. All the serious examinations of the west midlands economy offer no hope to the hundreds of thousands who are out of work.
The hon. Member for Northfield talked about Jaguar and the trade unions' refusal to accept the cheap labour 585 educational dustbin of YTS. I supported their opposition. They tried to do what Massey Ferguson workers did in Coventry — to get management to pay young workers a decent training rate. At Massey Ferguson, YTS trainees receive £74 a week and jobs are guaranteed for them at the end of the scheme.
In the same breath that the hon. Member for Northfield condemned the unions, he told us how much profit Jaguar had made and how successful the last year or two had been. Its profits run into tens, if not hundreds, of millions of pounds. That money could have been used to provide decent training allowances for youngsters. That company spent £50,000 on a toy Jaguar car for Prince William's second birthday. That money could have been used to double the training allowance for 50 kids on YTS. The fact that those kids do not earn reasonable money has nothing to do with the unions but with management decisions.
I shall paint a different picture of what has happened to the British capitalist economy in recent years. I do not choose Left-wing or Socialist sources. When attacking the Government, the best source is their newspapers. A copy of The Times in November carried the following words beneath the appropriate pictures:After the war Great Britain was the third largest steel producer. Now we are 10th.In 1900 Great Britain made 60 per cent. of the world's shipping. Today we make 3 per cent.Britain once exported motor bikes to over 100 countries. Now we import almost every machine we buy.After the war almost every car on the road was British. Now over half are foreign.Britain pioneered the world machine tool industry. Now our share is 3.1 per cent.Britain discovered the wireless. We now import 96 per cent. of all personal and portable radios.Britain made the first practical computer. Now we have 5 per cent. of the information technology market.We once made all the textile machinery in the world. We now make 8 per cent.That is an incredible advertisement. Since the Spanish empire collapsed 300 or 400 hundred years ago, no economy in history has declined faster than Britain's in the last 30 years.
Britain used to be known as the workshop of the world. The west midlands might have been called the fitting shop. Britain is now the warehouse of the world. Companies have had the opportunity to reinvest and improve productivity by investing in new machinery, but they have refused to do so. They have lost not only world markets but some major home markets.
Tories say that we should look to small firms for a solution. British Leyland at Canley axed 8,000 jobs about four years ago. The Tories talk about portakabins or garages to start people off in business. We would need thousands of such units to replace the factories that have closed in the last three or four years. In Coventry, 60,000 jobs in manufacturing industry have been lost in the last 10 years. That is a haemorrhaging of jobs in Coventry which is reflected in the region as a whole.
To stress so much the importance of small firms is nothing short of ridiculous. It is a joke. The quickest way to establish a small firm under this Government is to start with a large firm. That is how many small firms have been created in the last six years. Tory Members do not seem to understand. They lecture us on economics and say that 586 we do not have enough degrees to allow us to understand these issues. They do not understand that small firms are shock absorbers in a capitalist system.
If the economy is expanding, small firms will be set up to do the outwork for the bigger firms. As soon as the hint of recession comes, big firms cut their costs by bringing that work back inside and the small firms go down the drain. I predict that towards the end of this year that pattern will emerge again in Coventry and the rest of the west midlands.
Some hon. Members have said that the British economy is moving wonderfully. For the first time since Queen Elizabeth I, Britain is importing more factory-made goods than it exports—yet still Ministers paint a rosy picture of industry.
In April 1983, we were blessed with the appointment of the hon. Member for Coventry, South-West (Mr. Butcher) as the magic shadow to look after the west midlands. Since the day of his appointment as Under-Secretary of State, a job has been lost every 30 minutes in the west midlands under his so-called stewardship of decisions.
Figures illustrating the picture have been given by other hon. Members. Reference has been made to the 16.5 per cent. unemployment rate in the region as a whole, with 250,000 people unemployed. But those statistics do not take into account the kids on YTS, the unemployed men over 60 and the tens of thousands of unemployed women workers. In reality, almost 500,000 people in the west midlands region are now unemployed.
About 40 per cent. of the unemployed in Britain have been on the dole for over a year. In the west midlands, the figure is over 50 per cent. The Coventry unemployment rate, as my hon. Friend the Member for Coventry, North-East (Mr. Park), pointed out, is extremely high. In Hillfields, in the city centre of Coventry, the rate is 32 per cent.
In my area, 54 per cent. of people under the age of 19 have been out of work for over a year, and 61 per cent. of the over-45s have been unemployed for that length of time. That begins to give credence to the slogan that I recall seeing sprayed on subway walls in Coventry during the 1983 general election campaign: "Vote Tory. Retire at 16." That is how the youth of Coventry see the future under Tory rule.
Older workers are telling me that they are now part of the last in, first out, generation; that every time they get a job it lasts for six months to a year and that they are the first to be sacked.
Much has been said about apprenticeships. The Coventry Evening Telegraph carried a story yesterday saying that 12 trainee jobs announced by Talbot a fortnight ago resulted in applications from 350 youngsters and that 15 applications a day were still coming in. Naturally, most of those youngsters will be disappointed. That is true of other major factories in Coventry. Overall, there are a couple of hundred apprenticeships to be shared among a school-leaving population of 5,000.
In my area, there are people under 25 who have not worked since the present Prime Minister walked into 10 Downing street in May 1979. In other words, statistics supplied by the Department show that there are people in Coventry who have not been employed for six years. The chances of getting a job in the region are reduced by the 587 fact that, whereas in Britain as a whole 21 people are chasing every vacancy, in the west midlands the figure is 31, and in Coventry it is even higher.
I agree with hon. Members who say that the so-called panacea of assisted area status will not fundamentally alter the position for the unemployed. A few hundred jobs may be created — nobody will turn those away, especially somebody like me who spent three years on the dole before coming here; every time one goes to the jobcentre and looks on the board one is hoping to find a job—but it will not provide jobs for the 35,000 people in my travel-to-work area who are unemployed, or the 250,000 throughout the region who are looking for work.
Surveys have been done by various professional organisations to evaluate the problem. An organisation called Cambridge Econometrics Ltd. did a survey for the county council as part of the council's strategic review. It may be the last review to be commissioned by it if the Government have their way and abolish the West Midlands county council.
The survey produced by that Cambridge organisation showed that if the policies which the Conservatives have carried out in the last five years are continued up to 1991 — which we on the Labour Benches do not intend to allow to happen — there will be a further 30 per cent. fall in employment in manufacturing, 148,000 more jobs will be lost and there will be a 1 per cent. rise in service employment. The net effect of Government policies in the region in the coming five years will be another 144,000 jobs lost.
The county council has been doing its best — undertaking a finger-in-the-dyke operation—through the west midlands enterprise hoard, and by that means a few thousand jobs have been saved. We are pleased about that, but the abolition of the county council will, we estimate, kill off more jobs than the enterprise board has managed to save in the last two or three years, allowing for the targets that the Government have set for the abolition of the GLC and the metropolitan counties.
That action is political and has nothing to do with saving ratepayers' money or making services more efficient. That was best expressed by the Secretary of State for the Environment in an ITN interview 18 months ago. Having spoken about wicked Labour-controlled councils —of which the West Midlands county council is one he was asked by the interviewer:But, Secretary of State, if they do not like it, surely the people can vote them out?The right hon. Gentleman replied:Yes, but that has not been working very well recently.That is the real reason why the West Midlands county council, the other metropolitan councils and the GLC are to be abolished by the Government. They are Labour-controlled and the Tories wish to get rid of them without challenging the Labour party at the ballot box. We have lost 220,000 manufacturing jobs since the Prime Minister walked into No. 10. We have lost over a third of all manufacturing jobs in the west midlands. It is possible that this has been the most rapid deterioration in industrial employment that any region has suffered.
Statistics cannot describe the human misery of being on the dole. The rate of divorce is higher because of unemployment. Suicide is the second most common cause of death among young pople. There has been an increase in drug addiction, including heroine and other hard drugs. These are the social consequences of youngsters and older 588 workers being presented with the blind alley of unemployment and told that there is no real future for them.
One in three households in the west midlands lives on or below the official poverty line. Among those in work, wage rates are declining rapidly. There are one or two who say that eveything will be all right in future. It was reported in the Coventry Evening Telegraph — that wonderful newspaper that gives workers good news — that Sir Michael Edwardes was promising 3,500 Dunlop workers that their future would be safe following the amalgamation with BTR. He said:I shall seek to obtain assurances that there will be no immediate intention to change existing employment arrangements.This is a bloke who will get a golden handshake of about half a million pounds for being at Dunlop for a few months. He received a golden handshake of about a third of a million pounds when he left ICI. He presided over British Leyland at a time when 85,000 jobs were lost. He is on £3,000 a week at Dunlop and he has the gall to tell Coventry workers that their jobs are safe. As an individual and in carrying out Government policy, he has done more to destroy car workers' jobs in Coventry than anyone else.
Coventry was a showpiece for British capitalism for about 80 or 90 years. It was the fastest growing and richest working class town in Britain. It enjoyed that prosperity until the late 1960s. Wage rates started to decline in September 1971 when the toolroom agreement in the engineering sector was lost. Coventry had some of the best wage rates in the country because 75 per cent. of its workers were trade union members and because shop floor organisation in the major factories was extremely tight.
Industrial employment in the city was dominated by firms such as British Leyland, and especially by multinational companies. We have seen them remove investment from the region and take it abroad. Investment has been taken to countries where wage rates are poorer and where trade unions are largely illegal. Examples are Argentina, Korea, Brazil and South Africa. About £40 billion of investment has gone to those countries over the past six years.
Of course, some companies are making profits hand over fist. One example is GEC, which was mentioned by the hon. Member for Rugby and Kenilworth. Over the past two years — I have been in this place for slightly less than two years—we have had redundancies within GEC in Coventry, South-East. It has been applying to the Government for the short-time working subsidy but it has £1,500 million — this has been derived from the company's profits — lying in the bank. It refuses to invest that money in the industry in Coventry and in other areas. It has refused to reduce working hours and dramatically to improve wage rates. In other words, it has refused to return the wealth that it has gained from exploiting its workers in the Coventry factory and elsewhere to the very people who created the wealth.
§ Mr. Nellist
No, I shall not give way. Others wish to participate in the debate.
The problems in Coventry in the 1980s were developing in the 1970s and they have their roots in the 1960s.In 1966, the profits after tax of the major car companies fell from £65 million in 1965 to £30 million in 1966. However, the same firms distributed £33 million in dividends to the 589 shareholders and declared a net loss of £3 million. That money should have gone into investment. The lack of investment in the car industry in Coventry since Canley was opened in the mid-1960s as the most modern car assembly plant in Europe sealed the fate of the workers. That has had social effects.
My hon. Friend the Member for Coventry, North-East referred to housing in Coventry. According to the Department of the Environment, there are in Coventry 1,000 unfit houses and 6,000 that lack basic amenities, such as an inside toilet or hot and cold running water. Imagine that happening in 1985. About 14,000 houses require repairs costing more than £3,000. About one in five houses in Coventry need some repair work. Last year the council estimated that, given the money then available, it would take 40 years to do that job. Since then, the money has been cut.
Last night and this morning I worked out what the Government have stolen during the past five years from Coventry city council. They have stolen 28 per cent. of the rate support grant, 38 per cent. of the capital allocation and 56 per cent. of the money that we would have had for housing if rates had been maintained at their 1980–81 levels. To put that in the language of bricks and mortar, more than £80 million has been taken from Coventry city council during the past five years alone. There are 8,000 people on the housing waiting and transfer lists. Four years ago, the city council built four council houses. This year and next year the council will not be able to afford to build a single council house, because £80 million has been stolen from the city. We shall demand that that money is returned to our local authority.
It does the Labour movement in Coventry no good when the city council, instead of fighting the Government's financial cuts on local authorities' expenditure — as Liverpool did last year — passes on the cuts in the form of closures of eight schools, as was recently announced. We shall look towards a battle in the year or so ahead to emulate Liverpool's actions in Coventry. We shall fight to get the £80 million stolen by the Tory Government returned to the city.
§ Mr. Nellist
I stand on my own policies and principles and shall defend them. Not one Liberal Member has attended the debate, and the Conservative attendance has been less than the Labour attendance, despite the fact that there are twice as many Tory Members of Parliament as Labour Members of Parliament. The Opposition do not have to apologise for the remarks that they have made today.
Young people and workers over 45 in Coventry have no future with respect to jobs. When the present Secretary of State for Employment was Secretary of State for the Environment he went to Coventry, including the Wood End area, and was shocked by the state of housing. Every year since then, the Tory Government have repeatedly cut housing money for the city. Solutions to our problems as a city and a region do not lie even with the suggestions put forward by Labour Members during this debate. Those ameliorations will be welcomed, but we cannot have an island of Socialism in a sea of Tory capitalism. To get jobs into Coventry in particular and the west midlands as a whole we need, first, the resignation of the Tory 590 Government and, secondly, a plan for industry, finance and the economy that can guarantee jobs to school leavers, reduce working hours and provide workers with early retirement and longer holidays. If every worker had holidays as long as Members of Parliament, half the dole queue would immediately be wiped away because new workers would be absorbed into the system. Plenty of reforms could be carried out to create jobs.
We shall be asked, "From where will the money come?" I believe that the money can be found in many places. If the Government had not spent £6 billion during the past 12 months trying to break the NUM, they could have built 60 new hospitals, 360 new schools and more than 60,000 new three-bedroomed houses—that would have gone a long way towards alleviating the working conditions of people in the west midlands. Instead, the Government chose to try to break the trade union. That lesson will not be lost on working people in the west midlands. We want the money that has been stolen from us and we need jobs. To achieve that, we need to get rid of the Tory Government.
§ Mr. John Forrester (Stoke-on-Trent, North)
The House is indebted to my hon. Friend the Member for Walsall, North (Mr. Winnick) for initiating this debate because the region has a continuing problem, although we wish that it had not. He pointed out the realistic future as the Opposition see it.
Conservative Members' speeches could be described as being of the "whistling in the dark" variety. If there is pessimism, it is because we have had six years of misery and promises from the Government. The Opposition speeches were in stark contrast to the Minister's optimism. However, we must be fair to him because he said that, despite all the sunshine, it had not been reflected in the unemployment figures. There are 30,000 people in north Staffordshire who would say amen to that. In naval terminology his speech might be described as long on flannel but short on hope.
One applauds the principles of the hon. Member for Birmingham, Northfield (Mr. King) and his "buy British" campaign. About 12 years ago a high-powered deputation of leaders of the pottery industry saw a Conservative Minister about the inadequate labelling of inferior foreign imports. During the discussion the Minister asked, "Why don't you set up a factory in south-east Asia?" To the credit of the leaders of the industry, when they had recovered they told him that they wanted to provide jobs for the people of Stoke-on-Trent. That Minister, who was then at the Department' of Trade and Industry, is now a member of the Cabinet. I hope that he will be successful in convincing members of the Government that we do not want to export capital and jobs, and that we want them here so that we can all buy British goods.
Those of us who live on the outskirts of the region have had a spin-off from its ailing giant centre in addition to our own problems. In the 1930s, people from north Staffordshire emigrated to Coventry and Birmingham to find work. Their sons, daughters and grandchildren should not come home, because we are in the same boat as they are. There is no sign of a fatted calf on the horizon with which to feed them.
Stoke is smarting from and confused by the Government's continuing refusal to grant us assisted area status. Outside London, Stoke shares with Preston — a 591 much smaller town — the distinction of being the only industrial area which has no Government inner city supported or assisted area status. We feel strongly about that.
Hon. Members will be aware of the 2,400 redundancies at Michelin in Stoke, which take effect in three or four weeks. The recent MSC report — whichever page is quoted to support a point of view—tells us that that one event will increase Stoke's unemployment rate by 1.25 per cent. this year. The report tells us that the knock-on effect will come in 1986. Unless something unforeseen happens in Stoke, we can look forward only to rising unemployment in 1985–86.
We are supported by the north Staffordshire chamber of commerce and trade when we say that the unemployment rate is completely false. After massaging all the figures—I shall not go into how that is done — we believe our unemployment rate is about 18 per cent.
Each area has its own unemployment black spots. I understand that the MSC will publish its figures in wards some time in the future. I hope that the Government will see that that is sooner rather than later because then we shall be able to identify those areas of special need and deprivation. I feel that we may receive some startling and unpleasant statistics.
When the Government came into office they deliberately put up inflation so that they could bring it down again, and no one saw that as sensible. The charge against the Government is that with continuing unemployment and economic decay, they have done nothing. Sometimes they do things that make it worse. We hope, but not with a great deal of justification, that the Chancellor will give us a Budget on Tuesday that will at least increase some employment.
When I was young I thought that a Tory was a person who conserved his assets for the future. But this Government are busy selling off assets and spending money as if there were not going to be any tomorrow. Perhaps there is not for the Government, but who knows?
I think that everyone agrees that those who have been off work the longest will have the greatest difficulty in finding work in future. In Stoke 10,800 people have been off work for more than 52 weeks. In the west midlands the percentage is slightly higher than ours. I think that it is 46 per cent. and ours is 43.5 per cent. or thereabouts. In the United Kingdom it is only just over 39 per cent. Now our chamber of trade and commerce tells us that of those 10,800 people more than 6,000 have been off work for two years or more.
What is the future? We now realise that the traditional skills that people had are being replaced by new machinery and techniques. We know that the newer industries require totally different skills, yet at this critical time the Government are reducing their training programme and training opportunities. All of us have heard firms say to us, "We have jobs for XYZ skills, but we cannot get the people". That is crazy. If we do not make provision for training people for those jobs or other jobs in the future, we shall never be able to take advantage of any economic recovery, if it comes.
The problem of derelict land and underground dereliction in the west midlands affects many areas. If there is underground dereliction, before one develops the land one has to spend a great deal of money on site investigation. Those faults do not appear on National Coal Board records, certainly not on all of them, because many 592 of the activities underground took place long before nationalisation and in the last century. If one has underground limestone workings—there are some in the west midlands—I understand that one can get money for renovating the land, but grant-aid for coal mining areas is specifically excluded. In Stoke it takes an extra £60 per square metre to put up a building because of the need to compensate for the possibility of subsidence. All houses have to be built on a concrete raft approved by the NCB. One new factory has sunk 12 inches in the past 12 months. A constituent of mine is trying to sell a house. He has made inquiries about it at the coal board and discovered that there is a pit shaft underneath his lounge. No one will buy that house from him. Therefore, we are desperate for the Government to take some action on the Waddilove report on subsidence. We ask them to take a realistic look at the problem of underground dereliction, which is so serious for many of our industrial areas.
Most of the large, older conurbations have a decaying urban environment and obsolescent infrastructure, and Stoke is no exception to that. I do not accuse the Government of being solely responsible for the deterioration of 80 or 90-year-old houses or for the collapse of Victorian sewers. We have 99,000 houses in Stoke, a quarter of which were built before 1914, and 15,000 of which are substandard, with one or more of the basic amenities missing. A high proportion of those houses are privately owned by either pensioners or low-income families. That restricts the local authority's ability to carry out comprehensive improvement schemes or maintenance. I heard the Secretary of State for Wales say the other day that authorities will not spend money on building new houses. If the Government give us the money, or allow us to spend our own capital receipts, we shall build the houses in Stoke to provide the accommodation that is urgently needed by elderly and single people. That would provide work for the construction industry, renew our housing stock and overcome some of our social problems.
It is debatable how much violence and vandalism is due to social conditions. Many factors are involved and sometimes there is no reason whatsoever. However, it is much more tempting for vandals to attack that which is dirty, ugly and obsolete rather than that which is clean, attractive and new.
In the long run, it is not in anyone's interest to allow our cities to stagnate and decay. Some Government will have to come along to pick up the pieces and the consequences of today's neglect. The Government bear a heavy responsibility, because the cost then may be exorbitant and quite unacceptable. I, too, acknowledge that the people of the west midlands are the salt of the earth. But do not let them be sacrificed on the altar of the Government's dogma.
§ Mr. David Gilroy Bevan (Birmingham, Yardley)
I am grateful to you, Mr. Speaker, for calling me, and I apologise for the fact that I was unable to be in the Chamber at the beginning of the debate owing to constituency work. I came straight here by train.
But I should point out that until a moment ago, during our whole five-hour debate, with excellent contributions from hon. Members on both sides of the House, not a single member of the Liberal or Social Democratic parties was present. Not one had come to take part in this important debate. I hope that the people of the west 593 midlands will take note of that and bear it in mind when the representatives of those parties go round proclaiming their diligence and support with regard to such important issues.
Together with the hon. Member for Coventry, North-East (Mr. Park) I was a member of the West Midlands county council for eight years. Unlike the motion, I do not decry its passing, because it regrettably did many counterproductive things during its lifetime. It was abrasive, and did many things to cause warring factions between the district councils in the area. Of course, one regrets that unemployment has been bad, but I am not full of the alarm, gloom and despondency that has been voiced today by Opposition Members about the economic, social and housing conditions to be found in the west midlands. At one stage they could not have been worse, but they are considerably better now.
When I remember that inflation was running at about 26 per cent. under the Labour Government, that the productivity rate was once on the floor, that the policy initiated by a Labour Secretary of State in 1945, which brought about assisted area status, ground exceedingly surely against the west midlands for 40 years until it inevitably brought us down, and when I remember the policies that forbade the west midlands to put one brick on another for many years in terms of denying industrial development certificates and directing them to other areas, I can well understand why the area suffered so much that it found it difficult to retrieve its position. However, it is retrieving it.
Indeed, I thank the Government for introducing legislation on defective housing which will do much to help. I also thank them for backing the proposal to sell council houses to tenants, who undoubtedly want to buy them. But my hon. Friend the Minister should not forget the Smith houses, although the Boots and Waites houses have been dealt with. We want fairness, equity and justice for the Smith houses as well.
I regret the passing from my area of factories such as Lucas. I regret the passing away of the Wilmot Breedons and the grassing over of factory sites. I also regret that in the rationalisation of Land Rover those factories should go, although only to just outside my constituency. Indeed, I am sure that my constituents will still be employed.
At one time, looking round the constituency, there were 22 British Leyland plants. Many have regrettably gone, but let us not forget that we poured a lot of money into BL but lost because of the regrettable actions of the unions there. Because of the unions and sometimes the management and the clapped-out plant, we lost more than the assisted areas gained in terms of subsidy. Indeed, I do not recognise the terms in which the car industry has been spoken about.
The hon. Member for Coventry, South-East (Mr. Nellist) criticised the Government for attacking the miners, but some of us believe that a faction of the NUM was responsible for substantially jeopardising the position of workers in the west midlands by deliberate and progressive attempts to subvert the economy.
The greatest job creator and entrepreneur in the west midlands has been tourism, especially business conferences and business tourism. The hon. Member for Coventry, South-East smiles. Clearly, he is not interested in that, but the national exhibition centre has created 4,000 594 jobs. As a result, Sheldon ward in my constituency has 11 per cent. unemployment while the other two wards have more than 18 per cent. The exhibition centre, Birmingham International airport and station and the freeport have all played their part. I hope that my hon. Friend the Under-Secretary of State will note the great acceleration in that sector of the economy and its implications for employment potential and productivity in the area. I hope that he will note, too, that the spend for a business visitor is twice as much as for a holiday tourist—£56 compared with £23 per day—with an average of £350 a business visit.
I hope, therefore, that my hon. Friend the Minister will do everything possible to encourage Government subsidy for the Birmingham convention centre, which will require about £54 million in addition to its own input and that of the Common Market. Even if the car race in Birmingham has to be temporarily denied, I hope that the Government will ensure that the 80 acres of dereliction are assisted so that 2,000 or more jobs can be created with great economic benefit to the area as a result of support being provided for the convention centre.
§ Mr. Robin Corbett (Birmingham, Erdington)
It gives me no pleasure to say that Conservative attempts to paint a rosy picture are monstrous. Between January and February this year unemployment in the west midlands increased by 2,100. The Government are deliberately preventing the creation of jobs in Birmingham and the west midlands. I shall give one brief example.
Birmingham has 42,196 pre-war houses, six out of 10 of which—a total of 25,000 — are in urgent need of repair. At the present rate of progress, due to the Government's failure to fork out the money or to allow the city to spend its own money, it will take 622 years to deal with the pre-war housing alone. In addition, there are monstrous problems with the 400 tower blocks—not just relatively minor inconveniences, such as damp and condensation, but water penetration into the blocks which poses serious doubts about their structural safety.
I put it to the Government in all seriousness that if they do not intend to help Birmingham and the west midlands, they should get out of the way and not hinder us.
It was 120 years ago that Joe Chamberlain, a radical Tory lord mayor, used ratepayers' money—there was no rate-capping; he raised the rate deliberately—to buy the gas company, the electricity company and the tram company and to build Corporation street and the Elan valley dam that was to guarantee supplies of fresh water for Birmingham. He and his supporters saw the need for Birmingham to be prepared for the 20th century. A similar job needs to be done now to prepare Birmingham for the 21st century.
The Minister knows very well about the state of housing in Birmingham. Specifically, I should like to ask him about the recent discovery of faults in the 1,400 Boswell houses in my constituency and that of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker). Will the Minister undertake to consider sympathetically an application for Government aid under the housing defects legislation?
As well as creating jobs and the proud Birmingham of today, Chamberlain and his supporters created the art galleries, the museums, the parks and the open spaces. If the Government do not want to help us, I again urge them to get out of the way and to let us do the job ourselves. 595 Getting out of the way means letting the city spend the money raised through the activities of the council and the investments of previous years. The Government should stop pretending and leave us be. We are not concerned about MI. To my constituents, the M1 is at the bottom of the M6 and it leads to a place called London. They are not very fond of it. The M3 goes down the other side and leads to the English channel.
My constituents are not interested in such matters. The people of Birmingham, Coventry and the black country fuelled and fathered the first industrial revolution. Those skills were passed on and inherited. The blockheads on the Treasury Bench cannot understand that one learns such things at the kitchen table. One picks them up in conversations with one's parents. Of course, the skills must be re-applied; of course, we must learn lessons and develop new skills; but we have the basis on which to build. We can do it. The Government must not mess about. If they do not intend to give us proper development aid, if they mean to deny us the right to spend our money, let them leave us be and forget all about Birmingham. We did it before, and we will do it again.
§ Mr. Bruce George (Walsall, South)
I thank my hon. Friend the Member for Walsall, North (Mr. Winnick) for initiating this debate, and I thank the handful of my colleagues who have each spoken for less than 20 minutes.
I do not wish to sound the last post on behalf of my constituency. I wish only to make a few points. Five years ago, my constituency was relatively prosperous. Unemployment was about 5 per cent. The passage of five or six years has transformed the situation. Despite the rhetoric from the Conservative Benches, unemployment is now over 16 per cent.
That catastrophe is epitomised best by the small town of Darlaston. I was fortunate enough to be able to devote the very last Adjournment debate in the 1979 Parliament to Darlaston. The debate was relatively encouraging in the light of what had happened in the previous five or six years compared with what might have happened. A survey that I had undertaken among firms in Darlaston showed that there was a degree of optimism about the future.
The City of London managed to sell London bridge to the United States. However, when one visits Darlaston now, one sees great holes where factories used to be. Factories springing up in the rest of the world are testimony to what has happened in the town. The roll-call of dead and dying companies is terrifying — GKN, Rubery Owen, Charles Richards, Eaton Axles and F H Lloyd. My hon. Friend the Member for Walsall, North and I pleaded with NEI last week to save the Wellman Cranes factory in my constituency. That plea fell on deaf ears. One of the few remaining employers of more than 200 people in Darlaston is Servis, which manufactures washing machines. The receiver is in at Servis, and the people of Darlaston must wait with bated breath over the weekend to find out whether that company will join the long list of defunct companies.
The situation is devastating. It is not that one major company has collapsed, leaving the town without its one industry. Dozens of companies have bitten the dust. A petition circulating in Darlaston has been initiated not by politicians but by the Darlaston council of churches, which is pleading with the Government to help Darlaston to get out of an appalling hole. I ask the Minister to speak to his 596 colleagues. I hope that they will look at the petition and see that small town as a microcosm of the collapse and failure of the west midlands. We must get back on to our feet.
The Minister made an incredibly optimistic speech. Even the speech writers in the Kremlin would have blushed at its failure to touch reality, even on the edges. It reminds me of a visit that I made three years ago to Disneyland. The Minister's speech was about as real as Disneyland. There is no optimism in the west midlands. The problems are acute, and I know that the Minister, in reality, must be aware of that.
We want a mixed economy to emerge—not one that is wholly Socialist or wholly private. We must get our economy out of crisis so that we can give our constituents a degree of hope. The hope that they had some years ago has evaporated.
§ Dr. John Gilbert (Dudley, East)
I apologise for not having been here throughout the debate, but I returned from Germany only in the middle of the morning, having cut short my attendance at a conference.
I hope that the Government are aware of the appalling position in the black country, not least in my constituency which has an unemployment level of well over 20 per cent. Therefore, there must be some estates in my constituency where the rate is well over 30 per cent. We have had such figures for the past couple of years. No one has been spared; both large and small companies have gone under —for example, Round Oak at Brierley Hill and small firms employing only a handful of people. The position is not yet stable. Almost every day of every week the front page of the Express and Star reports job losses —perhaps 100, 200 or even 500, some to be lost immediately and some within a few weeks. I cannot recall seeing reports of jobs being created in my constituency. The position is the same both inside the enterprise zone—
§ Dr. Gilbert
I agree with my hon. Friend. The position is the same both within and outside the enterprise zone. The recession has hit farms, modern buildings, and new small industrial estates as well as firms in traditional manufacturing industries in the heart of Dudley and Netherton. Not only metal firms, such as boilermakers, have suffered; so, too, have the textile and service industries, bakeries, petrol stations and the freightliner terminal. The list is endless. There has not been a form of economic activity in Dudley that has not suffered.
It has all come upon us recently. I remember that only four or five years ago Dudley was a relatively prosperous community, with the lowest juvenile unemployment rate in the country. Now there is no prospect of hope for the future. It is not as though expenditure is not necessary. We have a new general hospital at Russels Hall, which cannot be completely opened. Hundreds of houses, both owner-occupied and tenanted, have been affected by subsidence. The people living in those houses have no idea of what the future is for them in their homes. There is an appalling backlog on the council house waiting lists. I am sure that all my colleagues hear of similar problems week in and week out through correspondence and at their surgeries.
Some of the council houses which are in an appalling state of disrepair were built not many years ago. The state 597 of our schools is also appalling. I have been around nursery and secondary schools with dampness, windows that will not open and disgraceful toilet and washing facilities, all of which are crying out for repair, but the Government will not spend money or let Dudley council spend any.
We have derelict land crying out to be converted to playing fields or new changing facilities. Most basic of all, we have a 19th century sewerage and drainage system which floods winter after winter, but the council is not allowed to spend the money necessary to take care of it. Moreover, only a couple of days ago, the Government announced that they are closing our training centre. That is unbelievable and there is no excuse for it. Its places are filled, it is making a profit and it is ensuring a throughput of trainees, but there was not the slightest sign of the Government being prepared to change their mind.
We have, in the Minister with responsibility for the west midlands, a very pleasant young man who, no doubt, is doing his best. He is useless as a Minister, but that is not his fault. He is not allowed to do his job because he has no money to do it. All he can do is receive deputations, smile at them blandly and say how sorry he is. We are all sorry, but he is not doing anything.
Black country people are extremely resilient. The industrial revolution on which the country's wealth is founded was started and carried on there. It is still the greatest reservoir of skilled manpower in the country. We are now paying the price for being generous when other regions had heavy unemployment. We kept quiet about ours and were happy to be throttled by the need for industrial development certificates and all that bureaucratic paraphernalia. But we must now tell the Government that it is time that they recognised what an industrial desert they have created in the heartland of British industry. We are now suffering as much as any other region. We are asking not for charity but for a fair crack of the whip—and now.
§ 2.2 pm
§ Mr. Geoffrey Robinson (Coventry, North-West)
I also congratulate my hon. Friend the Member for Walsall, North (Mr. Winnick) on securing this debate. It is timely, and other Opposition Members will try to repeat it in later Sessions.
The debate takes place against the background of recently published figures which show that, contrary to what the Minister said with such perverse logic, unemployment is again on the increase in the west midlands. As my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) said, it has increased by 2,100 since 1 January. The number of vacancies has dropped and the number of people chasing them has increased. In the west midlands, no fewer than 35 people are chasing every vacancy. No fewer than 1,500 redundancies were announced in January and West Midlands county council has put up a list of another 12 companies which are announcing redundancies in February and March.
Since the Government came to power, we have lost more than 300,000 jobs in the west midlands, 265,000 of them in manufacturing industry. We take no joy in those figures. Indeed, they cause us far greater sadness and give us far greater concern for action than they evidently do any 598 member of the Government or Conservative Member. Labour Members cannot be accused of publicising bad news. It is our duty as an Opposition to oppose the policies that have caused the problems.
A few days ago, I was in Geneva, where I spoke up for the British motor industry and preached the achievements of Jaguar, Austin Rover and Land Rover. That is what we do when we go abroad, but to come to the House and pretend that we do not have other than a tragic waste of resources, a tragic level of human misery and a dangerously declining manufacturing base in the west midlands is to turn the world on its head. We cannot be expected to do that, and we will not do that. We shall continue to show the Government and the Departments concerned the error of their ways until they come to see it.
I pay tribute to the many excellent speeches from Opposition Members. My hon. Friends will understand that in the short time available to me I cannot speak to all of them, but I hope that it will not be invidious if I mention one or two during my speech. In allowing the debate to go as far as we have, we succeeded, despite an inordinately long speech by the Minister, in allowing everyone who wished to speak the opportunity to do so. My hon. Friends will be grateful for that.
The debate has ranged more widely than purely industrial matters. Many hon. Members have mentioned housing, and there is no doubt that the Government's record on housing, as on industry, is one of the worst of any Government who have taken office since the war. It is a simple fact that, despite the pick-up in private sector starts and the small pick-up in private sector completions, fewer houses are being started and completed now, in the private sector as well as in the public sector, than when the Government came to office. Housing has had the same savaging as industrial and regional policy have had at the hands of the Government.
During the six years of the Government's tenure, they have produced a record second to none in terms of destructive achievement. Despite that, to listen to some Conservative Members—I exclude the hon. Member for Nuneaton (Mr. Stevens)—it would all appear to have been the fault of previous Governments, especially the Labour Government. Does the Minister not yet understand that the Government have been in office for no less than six years? How long does he want? No doubt he would like 16 or 60 years, and if we gave him that time he would probably achieve even more destruction. Six years is a long time to prove a point, and it is too long for the dangerous experiment on which the Government have embarked.
When the Minister asks us to consider the Government's achievements at the end of those wretched six years, he says, "Exports are reaching new records in volume and value terms." We notice the nice difference that he wishes to make there. He says that GNP is at a record high and that manufacturing output is higher than it was when they came to office. Those claims amount to nothing more than the fact that we dug an almighty hole and that we are slowly beginning to return to where we were before we dug it. That is the Government's achievement.
It is not enough to say that exports are at a record high when, during those six years, the Government have created a massive deficit on manufacturing trade, with which a future Government — a Labour Government— 599 will have to deal. Oil is a finite resource, and it will run out. After oil, the country will have to live off its manufacturing base, which was and shall be again the west midlands. On net exports, the Government have turned a surplus into a massive deficit of between £4 billion and £6 billion.
Of course, GNP has grown by 4.5 per cent., but it has done so in six years. I asked the Under-Secretary of State to say what other country comparable to Britain can boast such a pathetic achievement. There is none. Every other Government have done better.
Manufacturing output is still below its 1973 level. Which other Governments have increased their manufacturing output by such a small amount? The Minister said that he could not answer that question. Perhaps he is not interested in it. I shall give him the answer. No other country has managed to achieve so little. No other country has done as badly as we have in terms of exports, the balance of trade on manufactures, GNP or investment. That bad record applies particularly to the west midlands and to manufacturing.
The Under-Secretary of State made a disgraceful speech. We do not expect that of him, because we understand that he cares about manufacturing. The speech was deplorable in its irrelevance. The Under-Secretary will not face up to the simple truth that his Government's record is appalling and worse than that of any other Government in the OECD.
Over 50 per cent of the unemployed in the west midlands have been out of work for more than one year. Nearly 60 per cent. of those over 25 have been unemployed for over a year and 61 per cent. of those over 45 have been unemployed for more than one year and will probably never get another job in their lives. That is the stark human tragedy that the Minister tries to dress up as economic success. That is why I say that his speech was disgraceful.
It is often said that we have no policies to put against present policies. The sooner we stop present policies, the better. We have the skills in the west midlands. We have the money that can be invested in the west midlands. The massive car industry needs to be backed by the Government. It needs more money. Will the Under-Secretary undertake to respond to any call for further support from the Land Rover and Austin Rover divisions of British Leyland? Will he assure us that he will not allow either division to pass to Japanese control? If he cannot support them, will he ensure that they do not pass to Honda or any other foreign country? What about the small engineering firms investment scheme? That has made an important contribution to the re-equipment of manufacturing industries in the west midlands.
Why is British Telecom ordering a system other than system X after we put so much effort into developing a standard British system to meet BT's requirements, its specifications and costs, which would give us a home market from which we could export? We could accept it if the job were put to competitive tender, but Plessey and GLC in Coventry were excluded from tendering. May we have some answers?
What does the Minister intend to do about Spanish imports, which could have a dramatic impact on the ability of Austin Rover to supply the home market? Many Government Members have pushed the Minister about that.
600 We need a positive policy. Under this Government, 230,000 jobs have been lost. Soon that will be 300,000. Youth unemployment has trebled, liquidations are at a record level and housing starts are still down on what they were when they came to office. Over 60 per cent. of housing is substandard and 30 per cent. of our capacity has been lost. Investment in manufacturing industry is still 25 per cent. down. Output is still below its peak in 1973. Since the Government came to office, 1,200 factories have been closed.
The Government have no policies. Hope for the west midlands will come when the west midlanders vote to put a Labour Government into power.
§ The Parliamentary Under-Secretary of State for the Environment (Sir George Young)
I have listened with interest to what has been a good debate. I appreciate the concern of hon. Members who have spoken with feeling about the issues which face their constituents. In no way do I underestimate the difficulties that the region has faced and is facing as a result of the economic recession in recent years. However, we must not allow ourselves to become overwhelmed by the problems and fail to recognise the variety of possible solutions.
From the debate, two distinct images of the west midlands have emerged. One was painted graphically by the hon. Member for Walsall, North (Mr. Winnick) and substantiated by some of his hon. Friends. That depicted a region full of self-pity, even despair, devoid of hope and looking increasingly to Whitehall for the resolution of its problems through the injection of substantial sums of public money.
The other image to emerge was that painted by my hon. Friends the Members for Rugby and Kenilworth (Mr. Pawsey), for Birmingham, Northfield (Mr. King), for Nuneaton (Mr. Stevens) and for Birmingham, Yardley (Mr. Bevan). That showed a region full of determination to tackle its problems, facing them with self-confidence, enterprise and a recognition that the region's capacity to change, modernise and invest is more likely to re-create the prosperous future which we all want to see, rather than a solution based on massive injections of public money.
From my visits to the west midlands—I have visited most of the cities represented by hon. Members who have spoken today—it is clear to me that the picture painted by my hon. Friends has been more representative of the traditions of the area and of the views of those I met on my visits than the picture of despair painted by Labour Members.
The hon. Member for Coventry, North-West (Mr. Robinson) said that, given a choice, the people of the west midlands would vote for his policies. In 1983 those people were offered the very solutions that we have been offered today by Labour Members, and we won more seats in the west midlands than we had ever won before, and two of my hon. Friends who won seats at that election have spoken in this debate.
§ Sir George Young
Threats of electoral retribution do not cut much ice.
The hon. Member for Coventry, North-West said on several occasions that my hon. Friend the Under-Secretary had made an appalling speech and that the Government's 601 record was appalling. My hon. Friend produced a whole range of statistics to substantiate his view. The hon. Gentleman produced not one, nor was he able at any point to challenge any of the information that my hon. Friend adduced.
§ Mr. Geoffrey Robinson
I am challenged and I feel bound to respond. The Minister asks what figures I quoted to contradict the figures given by the Under-Secretary. I quoted figures specifically about exports, which are at a record level, but that is not the issue. The Minister must understand, even if his hon. Friend did not, that it is a question not just of exports but of net exports—that is, the state of our balance of trade on manufacturing—and that has deteriorated terribly.
I spoke about GDP output. The Under-Secretary spoke at inordinate length very early in the debate, which we did not expect him to do, and he did not adduce an argument on the GDP point that I made. What sort of achievement is a 4.5 per cent. increase in GDP in six years? Is that not worse than for any other comparable country in the OECD network?
§ Sir George Young
The hon. Gentleman asked that rhetorical question halfway through my hon. Friend's speech, but my hon. Friend did not speak only about exports. He talked also of investment, the increase in output and a whole range of economic indicators.
During the debate, my hon. Friends have drawn on evidence from the MSC. All of that substantiated our case that there are signs of an upturn in the economy in the west midlands. It does Opposition Members no credit to ignore the statistics simply because they do not like them.
The private sector has responded well to some of the opportunities that my Department has offered — for example, urban development grants; 34 schemes have been approved involving grants of £17.5 million, which has produced in its wake private investment of £88.4 million, and a significant number of applications are in the pipeline.
Progress in the region's two enterprise zones is encouraging, and I do not recall any Opposition Member referring to those.
§ Sir George Young
Almost all the sites in the Telford enterprise zone have been taken in the 14 months since its designation.
There is evidence that the private sector of housing is prepared to tackle the unpromising sites and estates in partnership with local authorities and to build attractive homes at prices that people can afford. We should not forget the satisfaction that my hon. Friend the Member for Birmingham Yardley, (Mr. Bevan) mentioned of the 70,000 former council tenants who have bought their own homes and realised a major ambition in so doing.
Nothing that I have heard today leads me to change my view that the Government are right to pursue their resolve to abolish the West Midlands county council. The WMCC has carried out some economic development work that has been of benefit to its area but the district councils in the area are already supporting impressive economic schemes. It is right to give the primary local authority economic development role to district councils. If they wish to do so, 602 they will be able to enter into joint voluntary working arrangements with one another and to set up enterprise boards. The Government have actively sponsored the setting up of the West Midlands industrial development agency, which has an important role to play in these matters.
Several Labour Members have defended the West Midlands county council. I remind them that the hon. Member for Birmingham, Perry Barr (Mr. Rooker), an Opposition Front Bench environment spokesman, said that he would not lift one finger to save the county council. [Interruption.] That is an environmental issue and we should attach some weight to his remarks.
I shall try to deal now with some of the issues which have been raised in the debate. If I do not deal with them all, either my hon. Friend the Under-Secretary of State for Trade and Industry or I will try to write to those concerned. My hon. Friend the Member for Rugby and Kenilworth mentioned some good news from GEC, Jaguar and British Leyland. He referred to Talbot and Iran and said that Iran appeared to be a slow payer. We shall take up that issue and do what we can to resolve it.
The Government's car service has supported the car industry in the west midlands in a modest way. I am happy to say that the service buys all its cars from British manufacturers. Last year it bought 42 cars from Austin Rover, some of which were produced by west midland workers.
A successful development such as the Warwick science park should be able to attract private sector investment to augment the public resources which have been provided by local authorities. I commend the approach of the Birmingham city council, which brought in Barclays bank as a partner in the Aston science park venture.
The hon. Member for Coventry, South-East (Mr. Nellist) talked about local government. He advocated policies of confrontation in local government from which the leader of his party, the right hon. Member for Islwyn (Mr. Kinnock), has already dissociated himself. These policies are being abandoned by the hon. Gentleman's friends who are in control of some local authorities in the west midlands.
§ Sir George Young
I wish to try to make progress and deal with some of the issues which have been raised. I have spent about 180 hours with the hon. Gentleman debating local government in Committee. That has been quite enough and I do not want any more of it now.
§ Sir George Young
My hon. Friend the Member for Northfield mentioned buses and Metro-Cammell. My hon. Friend will know that demand for buses has been falling for some years as demand for bus services has declined. Our proposals may result in some difficulties for manufacturers, at least in the short term. I shall pass on my hon. Friend's suggestion to my right hon. Friend the Secretary of State for Transport. However, the longer that the Government fail to tackle the underlying problems, the further the decline of the bus industry will go and the harder it will be to reverse it.
Transport has been discussed during the debate, especially the black country route. The Government have 603 given unequivocal support to the black country route, which is a major scheme which will cost about £42 million. We named the scheme in April 1984 for transport supplementary grant purposes. In December 1984 the transport supplementary grant settlement of the West Midlands county council made special allowance for the black country route to allow swift progress. The scheme has been designated as a project of regional or national importance, which means that the resources for it are ring-fenced. We have supported the WMCC's application to Brussels for regional development fund grant for the scheme, which has been successful.
We should have regard to the entire housing picture instead of concentrating on public sector starts or improvements. The hon. Member for Coventry, North-West, who wound up on behalf of the Opposition, told us that the figures for private sector starts and completions show a steady increase. That should be contrasted with the decline in the number of public sector starts.
Public sector starts are down because local authorities are rightly switching their resources to modernising, improving and converting stock we already have rather than building new accommodation for rent.
§ Sir George Young
The problem of the Boswell homes has only recently been drawn to my Department's attention. The Boswell house is a possible candidate for designation under the Housing Defects Act 1984, and the case is being considered by my Department.
My hon. Friend the Member for Yardley asked about Smith houses. Because of his representations, we carefully considered the case for designating Smith houses under section 1 of the Housing Defects Act but concluded that this was not possible because it appeared that the use of colliery shale as an infill material had caused the particular problems in Birmingham. I understand the concern of owners of Smith houses in Birmingham. I am sorry that the city has taken no action to designate these houses in a local scheme under section 12 of the Act. The city and my hon. Friend may take some comfort from what my right hon. Friend the Secretary of State said in the debate on Wednesday when we considered HIP allocations for next year. He recognised thatsome authorities have difficulties in meeting their obligations under this Act in addition to their other commitments.He said that, in response to representations, he wasprepared to consider sympathetically requests from authorities that cannot otherwise meet their obligations under the Housing Defects Act for additional allocations towards the cost of repurchasing or reinstatement grants."—[0fficial Report, 13 March 1985; Vol. 75, c. 348.]That point was aimed specifically at the houses that have been designated by the Secretary of State rather than the houses under any local scheme. If Birmingham has houses that are already designated, that might offer some comfort. [Interruption.] I am trying to deal with all the questions. The more I am interrupted, the less able I will be to do so.
The Opposition did not mention the fact that, in the west midlands county as a whole, spending on grants has increased from £8.8 million in 1981–82 to £25.6 million 604 in 1982–83 and to £56 million in 1983–84. Forecast expenditure for the current year is expected to be about £49 million.
§ Sir George Young
It will be more than the £5 million which the Labour Government spent in 1979–80. These are impressive figures and mean that a great deal of Valuable repair work has been carried out.
I was asked about some of the difficult-to-let estates. This is a priority for my Department, and I was pleased to note that our consultants under the priority estate projects are active in the west midlands, for example in Coventry and Sandwell, giving advice and informal help to authorities that are seeking to launch their own intensive management projects.
Hon. Members asked about derelict land and the land registers. In the west midlands, the land register holdings contain more than 10,000 acres of vacant and underused land on 1,100 sites. Since the registers were published, nearly 3,000 acres have been removed from the registers, enabling valuable land to be brought back into productive use. I shall examine two specific questions raised during the debate where it appears that there has been some difficulty in obtaining derelict land grant.
Grants under the European regional development fund have been available to certain districts since 1984. Since November last year they have been available to the much wider west midlands assisted area. A total of 61 schemes have been approved, with nearly £22 million of grant aid.
A number of development grant schemes which are getting under way in the west midlands enable the public sector to put some money up front and bring in private sector funding behind it. On my visits to Wolverhampton recently, I came across excellent urban programme schemes. The Chubb building, a Victorian lock factory, has been converted to new enterprise workshops, one of which houses an individual who is setting up an electronic engineering business. I came across also the narrow boat project which is run in conjunction with the probation service. It provides youngsters with skills in the metal industries. The end product — the narrow boat — is used to give mentally and physically handicapped young people the enjoyment of canal trips. A small amount of public money has been used to give wide benefits.
We have heard a great deal about hon. Members' anxieties and the issues. I hope that my hon. Friend the Under-Secretary of State for Trade and Industry and I have shown the House that the Government take seriously the problems facing the west midlands. We are prepared to play our part. I have outlined a number of schemes that my Department has put forward through the urban programme, urban development grant, and derelict land grant. There are now signs that local authorities recognise the value of such schemes. They are taking them up with my Department. A number of worthwhile jobs have already been created through the use of such schemes. The best help that local government can give industry and employment in the west midlands—
It being half-past Two o'clock, the debate stood adjourned.