HC Deb 13 May 1985 vol 79 cc148-54

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

2.33 am
Mr. Tom Pendry (Stalybridge and Hyde)

The words of Lord Stockton in another place in November last year echoed the thoughts of millions of people in this country when he said: it breaks my heart to see what is happening in our country today." — [Official Report, House of Lords, 13 November 1984; Vol. 457, c. 240.] Without any doubt, Britain is a divided country and becoming more so with this Government's divisive economic strategy that is superimposing new inequalities on the traditional regional disparities.

In 1979 the Prime Minister pledged to rebuild our economy and to reunite a divided and disillusioned people. In truth, the nation has never been more torn and separated than it is today. From the outset, I wish to make it clear that the social and economic deprivation rampant in our society are not confined to the north. When my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) and I toured the country as regional spokesmen for the Labour party before the last general election we saw problems in the south-east as great as any experienced in the north. In London, the Medway towns, the Isle of Thanet, Portsmouth, parts of the south-west and Cornwall, we saw those problems writ large. Nevertheless, the southern parts of the country have a significantly better deal than the areas in the north-west, the north-east, Yorkshire, Humberside and the midlands.

Both provinces—for that is, in effect, what they are — have approximately the same populations; 23.5 million in the north and 23.3 million in the south, namely, in the south-east, the south-west and East Anglia. But the economy of the southern province is significantly larger. Its GDP in 1981 was £13 billion greater than the GDP in the northern province. In total personal income terms, there is £7 million less in the north than in the south.

Low pay, compounded by unemployment, means that a southerner has £100 in his pocket for every £88 in a northerner's pocket. Male average weekly earnings in Greater London in April 1983 we're £200 whereas in Greater Manchester they were £160. The proportion of full-time male workers in Greater Manchester earning less than £75 a week was double the figure for Greater London in the same period.

Since 1979, the northern region has lost over 784,000 jobs, or 42 per cent., of total job losses in the United Kingdom. Today, there are more manufacturing jobs in the south than in the so-called industrial north. However deeply ingrained were the traditional problems of the regions prior to 1979, they have been intensified since then.

The scale of job losses has heightened the intensity of the regional problems. Since May 1979, 1.5 million manufacturing jobs have been lost, with an unprecedented level of redundancies. For every redundancy in the southern province during the conservatives' reign, there have been two in the north. The northerners have suffered 190,000 more redundancies than have those in the southern province. The north-west has been hit most of all, with 111,000 redundancies since 1979.

When the Conservatives came to office, the north-west had 1.1 per cent. higher than the national average unemployment rate. Today it is 2.6 per cent., and it is 6 per cent. higher than in the south-east. The problems of the northern region are further compounded by a tax on public spending imposed by the Government, much of which has been centred on housing. Between 1979 and 1983, the number of housing starts fell by more than 38,000, and 83 per cent. of those cuts were concentrated on the northern province.

Cuts in housing capital expenditure, also an element of regional injustice, have been compounded by cuts in housing benefit. About 1.5 million people have lost housing benefit completely and 4.5 million have been affected in some way. Again, the northern province has been pushed into another downward spiral.

In local authority expenditure, the Government's logic belies belief. Their understanding of need is, to say the least, puzzling. They say that the northern province is less in need than the southern province. Although 170,000 more people live in the north, it has 375,000 more pupils to teach, has vastly more poverty by any criteria, has more single-parent families, according to the Black report, and it has areas such as Tameside, one of the most deprived health districts in the country, and much more unemployment. Yet in the view of the Department of the Environment the local authorities in the north need less help than those in the south. I put it to the House that that is nonsense.

With the new Right at the helm, what chance have the poorer regions? I wish the right hon. Member for Cambridgeshire, South-East (Mr. Pym) luck with his Centre Forward group—he will need it. Very few Tory Members from the north and the north west seem to want to join that group and to redress the imbalance in our society. My own authority of Tameside is monitoring the activities of Tory Members in the north-west and the reports make interesting but disturbing reading, especially for those of their constituents who are living on or near the poverty line. Naturally, they will be rumbled before or at the next election, but in the meantime their actions merely widen the gap between north and south and make areas such as the north-west even poorer.

In the short time allotted for an Adjournment debate it is impossible to set out all the arguments and to bring home the full impact of the Government's policies on the poorer regions. Until the Government recognise the need for a regional dimension in planning and public expenditure, and reverse their narrow monetary policies, the two parts of our nation will be pulled ever further apart.

If there was a crowning act of madness by the Government which would exacerbate the problems of the division still further, it would be to develop Stansted airport at the expense of Manchester airport. Is it really a priority of our nation to encourage the creation of 25,000 jobs in rural Essex where they are not wanted when all the logic calls for the development of Manchester airport where jobs are vital? I hope that the Minister will assure the House that the Government do not intend to take that course. I hope that he will also announce a change of course on the economic front, although I very much doubt it.

With your permission, Mr. Deputy Speaker, I should like to conclude my remarks at this point so as to allow some time for my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). No one in the House has spoken up more for the people of Tameside and the north-west than my right hon. Friend, and I hope that the Minister will heed what he says.

12.42 am
Mr. Robert Sheldon (Ashton-under-Lyne)

The House will have listened with great interest to what my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) has said about Britain being a divided country. That fact is becoming ever more widely accepted—and fact it is, as my hon. Friend so clearly showed. Not only are people becoming more aware of it. In the north they are becoming angry about it. That is the major change that has taken place.

In the 20 years that I have been Member of Parliament for Ashton-under-Lyne I have witnessed many complaints, but I have never before witnessed such a level of consciousness and of frustration as, day after day, people see on their television screens the kind of life being Lived in the more favoured part of the country.

The right hon. Member for Old Bexley and Sidcup (Mr. Heath), who represents a constituency in the south-east, put the matter very well when he said that the south-east was overdominant. That is the situation today. Up to 40 per cent. of the firms in my constituency have closed since 1979. The firms in my area are not large firms. They are small firms, which the Government are supposed to support. They are neither high tech nor low tech—just middle tech, but doing a valuable job for their employees, their customers and their town.

Those firms find themselves in great difficulty because of the enormous advantages enjoyed by the south-east. They watch with horror as Johnson Matthey Barkers receive £75 million while the firms in my constituency get nothing. They see with growing awareness the £12 billion a year that passes out of our country via the City of London to other countries. This money, which could and should have been used to expand our industrial base in the north, is used to finance other economies.

These firms know full well that the high value of the pound is a great disadvantage to the manufacturing sector. My area earns its living from manufacturing industry. It does not have the international banking or financial operations of the City. The people earn their living by making and selling goods. They see that the way in which the economy has been run has favoured financial rather than industrial operations. They note full well that this system has no particular bearing on the needs of the country as a whole.

I ask more Ministers to come to the north. If one gets out at Piccadilly station in Manchester and walks around the streets there, one sees the difference between that area and London and the south-east generally. One does not need statistics or facts to note that great difference; one can see with it with one's eyes. I have drawn attention to the fact that because of economic stringencies, certain roads in my area are not looked after in the same way as roads elsewere.

My hon. Friend the Member for Stalybridge and Hyde rightly drew attention to the discussions on Stansted airport. There will be extreme anger and dismay in the whole of the north-west if there is expansion in the more favoured parts of the country again. It is not just a matter of deciding where the airport should be. A whole area could use a successful airport based upon Manchester which used the initiative of the people of the north-west.

Britain is a divided country, and a nation cannot be operated in that way. There is a growing feeling that Britain is divided. Sooner or later, unless the process is reversed, there will be grave problems with regard to unity. I hope that the Under-Secretary of State will offer us some hope that this reversal will come about shortly.

12.47 am
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher)

It is legitimate for the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and the hon. Member for Stalybridge and Hyde (Mr. Pendry) to raise this topic in the House, albeit on the Adjournment. I am sure that they agree that the subject is huge, wide and complex. Perhaps, we should have more time to debate the complex reasons behind the discrepancy in the economic performance of the various regions of Great Britain.

A number of figures have been bandied around. I put it to the House and to those who are concerned about discrepancies in economic performance that there is something rather chilling in the following figures: in 1964, the United Kingdom had 14 per cent. of the share of world trade in internationally tradeable goods and services; by 1978 that figure had fallen to 8 per cent.

The CBI tells us—and I am sure that we all believe the integrity of its figures—that for each 1 per cent. of loss in our share of world trade, Britain exported 250,000 jobs. From that one factor alone, we have exported 1.5 million jobs.

I ask hon. Members to consider other good, hard, data produced by the Labour party in its finance and economic affairs committee report in 1976, which, I am advised, pointed out that by 1980 there could be 2.5 million people unemployed in the United Kingdom. The committee cited all sorts of factors—the demographic factor, the loss of competitiveness, the erosion of the advantages that we gained through successive devaluations, and so forth. But, just as I agree with hon. Members that it is the manufacturing sector which has borne the brunt of Britain's decline in job opportunities through loss of world market share, the recession and other factors, I hope that they will agree that we have a very complex set of clauses on our hands and that it is disingenuous for any hon. Member to lay the blame for the totality of the 3.25 million unemployed at the door of the current Administration.

I leave those thoughts with the House only by way of inviting a further response by hon. Members when we discuss this very serious issue.

First, let me agree that there are differences between the economic situations of various parts of Great Britain. Of course there are economic differences, as there are geographical, social and cultural differences. They are by no means a new phenomenon.

Variations in, for example, unemployment rates and gross domestic product per head of population have existed for a long time. For many years, unemployment rates in the northern regions have tended to be higher than in the south and midlands. Since 1979, unemployment in the west midlands has also been above the national average, but the causes of the problems of that region go back well beyond that year. I shall come back to unemployment a little later in my speech.

Before I do that, let me look at some of the other aspects of this so-called divide. If we look at GDP, we see that the south-east is the only region with above average GDP per head. The region contains 31 per cent. of our population and contributes 37 per cent. of GDP. But, again, although there have been changes in the pattern of GDP per head in the past decade or so, there have long been significant differences between regions.

A further major point about the north-south differences is that the contrast between a depressed north and a prosperous south can be overstated. In saying this, I do not want to deny what I have just acknowledged in the generality. As a generalisation, there are significant and long-established differences, as shown by various methods of measuring economic wellbeing between the south and the north. Various remedies have been tried by successive Governments to solve the problem, and the evidence suggests that a lot of extra jobs have been created in the assisted areas—of the order of 500,000 by the early 1980s — but, despite this massive programme of assistance, the problem still persists. This is a reflection of the deep-rooted causes of regional economic disparities.

Regional economic problems used to be largely ascribed to dependence on low growth or no growth industries, and to peripherality—that is, distance from main markets. Over the last two decades there have been significant changes in the industrial structure of the assisted areas, in part as a result of the operation of regional policy, and the differences are now less marked. Nevertheless, in some cases the problems of an area can still quite clearly be attributed to the decline of a major industry in the locality. There is no preordained law which states which industries go into decline, and therefore it is folly to describe whole industries as sunset industries. In the words of my right hon. Friend the Secretary of State, there is no such thing as a sunset industry; there are only sunset managements. Differences in performance by companies in the same sector beg a whole series of questions, many of which are far too complex and perhaps controversial to be dealt with in an Adjournment debate.

With improvements in transport links, the nature of the peripherality problem has changed. Fast road links are more comprehensive than they were 20 and 30 years ago, though many business men in the east and west midlands would give their eye teeth for a cross-country route to match the Liverpool-Manchester-Hull motorway capacity. The peripherality problem today may rather be one of keeping in touch with the myriad decisions made by business contacts and maintaining awareness of market opportunities in the major commercial centres, most significantly in the south-east, but even in this area technology is coming to the rescue. The provision of telecommunications infrastructure is as important for today and for the future as the development of railways was in the 19th century, and the upgrading of the road network has been in the past decades.

More recently, academic research has pointed to the existence of other structural characteristics and perfomance measures which may help to explain variations in the economic performance between regions. There is evidence that, particularly in relation to the southeast, many of the assisted areas have a somewhat unfavourable rate of product innovation and an industrial milieu less conducive to successful new firm formation. Those features are thought to be related in part to he relatively low numbers of managerial and professional people resident in some assisted areas, and to a high level of dependence on manufacturing employment in branch plants owned by national or internatinal companies whose United Kingdom headquarters and research and development facilities are concentrated in the south-east. The low proportion of new firm starts in the assisted areas is particularly marked. In 1983, the four northern regions accounted for 29 per cent. of business starts as against their 36 per cent. share of working population.

Mr. Tom Normanton (Cheadle)

There can be no doubt on either side of the House that there has been for a long time growing concern about what is called the north-south syndrome. Is it not true to say two things? First, to describe the north as a wilderness dying is a complete distortion of the reality of the facts. In that context, I quote the example of Stockport where, until a year ago, successful efforts were made by the Conservative-controlled council in attracting new and expanding industries. Secondly, is it not wrong to categorise the north as being beyond hope? There are many prospects for expansion of the new types of industry. These are the ones about which we are talking, and we should be bringing the national and European interest to be more aware of them.

Mr. Butcher

I recognise the long-standing and distinguished work that my hon. Friend has put in on behalf of the north-west region as a whole. I agree that it is ludicrous to categorise a whole region in a particular way. Within any region there may be significant areas of dynamism and growth. Labour Members have made a political point tonight and seem to be conniving in a campaign mounted by the Thameside borough council to target north-western Conservative Members of Parliament. Therefore, I have to respond in kind by saying that if the Stockport idea, were to be adopted, in some of the Labour-controlled local authorities there would be grounds for more optimism about attracting more business for existing firms within those localities.

Mr. Tony Lloyd (Stretford)

rose—

Mr. Butcher

If the hon. Gentleman had come in earlier, we might have been able to come to an arrangement, but I have much information to respond to, and there have been two contributions from the Labour Benches.

I shall look particularly at the issue of the great divide as it has been described by a report published and put together by the Tameside district council. I believe that I am quoting accurately the leader of that council, Councillor Oldham, as he in turn was reported in the Ashton-under-Lyne Reporter on 17 April, as follows: 'This Government, aided by people such as our own North West Tory MPs, has damaged the fabric of the North to a greater degree than the South. To a certain extent that tends to give the game away, that that report is mainly a propaganda exercise. It seems to be short on economics and long on politics. The leader of the council was further quoted in the newspaper as follows: 'Places like Tameside have ratepayers who are suffering as a result of this. If we can stop it, and expose it, it will be to their benefit, because they will pick up the extra cash and support that is due to them That is very cynical nonsense. If we look at the record, we find that, for example with block grants, the rate support grant system does much to compensate the differences in wealth and social problems between the north and the south. If block grant were paid on rate bills, some £3 billion would go to the north—in this case including the east and west midlands—and £5.5 billion to the south. However, it is distributed to compensate areas with lower rateable resources and higher incidence of needs. In practice nearly £5 billion goes to the north.

Similarly, when we talk of doing down the ratepayer, we should look carefully at the Tameside record. It did not do too badly out of the 1985–86 rate support grant settlement. While it gained only a 1 per cent. increase in its spending target, its block grant entitlement for keeping to target this year— about £47 million— was slightly more than it received in 1984–85. However, the council has decided to overspend its target by 3.3 per cent. and will therefore suffer grant loss or penalty of about £5 million. As a consequence, the council had to increase the rates by 10 per cent. The rise could have been lower if Tameside had kept to the Government's guidelines. In so doing, it could have looked after the interests of the commercial and industrial ratepayers in the borough.

Even more spectacular than that, we have to note a figure that has been accepted in the past in recent debates. Since the general election in 1979, when this Administration first took power, some £2,700 million in industrial assistance has gone into the four regions that we can define as the north of Great Britain, in terms of the motion. That is an act of massive generosity by any stretch of the imagination. With block grants, there has been a similar and significant incidence of positive discrimination.

I notice that there was a reference in the report, "The Great Divide", to the discrepancy in Arts Council grants. If one takes out of the equation support for national arts companies such as the Royal Shakespeare Company, the Royal Opera House or the English National Opera, the highest per capita spend on regional arts associations is in the northern region. Northern Arts received 58.4p per head of population, whereas the Southern Arts Association received 20–9p. When we discuss such an issue, if it is seen to be relevant to the report published by the council, surely we can get our facts right. I am afraid that the basis of the Tameside borough council report is spurious, but I am grateful to it for kicking off a debate on reasons for discrepancies and differentials in performance between the regions.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at three minutes past One o'clock.