§ Motion tnade, and Question proposed, That this House do now adjourn.—[Mr. Neubert]
2.30 pm§ Dr. Norman A. Godman (Greenock and Port Glasgow)Throughout my constituency there is a deep anxiety about the bleak economic and social circumstances of thousands of families of unemployed people. Unemployment is souring the lives of the young, the middle aged and the elderly. My constituency is not uniquely blighted. Unemployment in Scotland has doubled since 1979, with the closure of 1,300 companies and the loss of 174,000 jobs in the manufacturing industries. Manufacturing output is still below its 1979 level. Since that year, Scotland has lost one job for every six lost in Great Britain as a whole. Although there has been some growth in employment, unemployment in Scotland has worsened more than in Great Britain as a whole.
Unemployment rates vary among areas. Strathclyde has a current figure of 18.8 per cent., whereas Shetland has a current figure of approximately 5.6 per cent. Long-term unemployment is a major social problem—by that I mean unemployment of over 12 months' duration. It accounts for over 40 per cent. of all unemployed people in Scotland. The view of the Fraser of Allander Institute is, to say the least, gloomy. That institute says:
… "it is difficult to foresee any expansion of employment in Scotland that is likely to make any significant inroads into the problem of unemployment.It is against that national backcloth that I wish to outline the problems in Greenock and Port Glasgow. Under the terms of the old definition of the Greenock travel-to-work area, the number of people unemployed in October 1979 was 5,367, a rate of 11.1 per cent. In October this year male unemployment was 25.4 per cent. and overall unemployment was 21.4 per cent.There are over 10,000 unemployed people in the Greenock travel-to-work area, which embraces a small part of the constituency represented by the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley). However, over 8,800 of those people live in my constituency and of that figure 3,740 have been unemployed for more than a year. In the Greenock central area, male unemployment is above 35 per cent. and a similar figure obtains for parts of Port Glasgow.
I was given a graphic illustration of the bleak misery and poverty associated with being made unemployed last week in Port Glasgow. It concerns a constituent of mine, Mr. Andy Young, who lives in 36 Sunnyside Avenue, Port Glasgow—a euphoric name for an avenue in Port Glasgow at the moment. He was recently made redundant and told by the Department of Health and Social Security office in Port Glasgow that he would have to wait 10 to 14 weeks for his application for a single bed for his two-year-old daughter to be processed. His other child of six months is still sleeping in her pram. In addition, Mr. Young was given the princely sum of £5.49 by the DHSS office to provide for his wife and two children for one day. On the following day, which was a Saturday, the Giro payment promised by the DHSS failed to arrive and Mr. and Mrs. Young had to seek help from the emergency unit of Strathclyde regional social department. He received £10 288 to enable the family to exist through Saturday arid Sunday until he could seek assistance once more from the DHSS on the Monday.
Another case brought to my attention at 9.30 this morning by telephone concerned a young man of 20, employed by National Semiconductor. I am given to understand that that young man, who has completed two and a half years of a three-year apprenticeship, was told yesterday that he was to be made redundant. That is dreadful treatment, handed out by a firm that has had a good deal of financial assistance from the British state. Those two cases demonstrate the reality of unemployment for my constituents.
I return to the continuing decline of manufacturing industry in my constituency. The following firms have either closed down or drastically reduced the number of their employees in recent years. In 1979 Scott Lithgow dry dock closed, with a loss of 300 jobs. Cowal Engineering closed, with a loss of 81 jobs in the same year. In 1980 Paton and Baldwin closed, with a loss of 533 jobs. In 1981 the Kerr Group closed, with 477 job losses and in the same year VF Corporation closed, with 240 job losses. Charters Marine closed, with the same job loss in the same year. Kerr Electrical closed down with 294 job losses in 1983. Tate and Lyle reduced its work force by 84 in 1984. This year National Semiconductor has dismissed ever 500 people. British Shipbuilders, a major employer in my constituency for many years, has dispensed with 4,111 jobs since 5 August 1983.
There has been some growth as well as decline in Greenock and Port Glasgow, reflecting the economic developments and trends in Scotland. For example, IBM now employs about 2,700 people, and, despite the news this week of a temporary reduction in the output of its personal computer, there are to be no redundancies. On the principle that it may be easier to save than to create jobs, I should like to refer to the recent announcements by Scott Lithgow that it is the company's intention to make over 800 employees redundant and Clark Kincaid's announcement that 80 men are to be dismissed because of a lack of orders.
Let me deal with Scott Lithgow first. I have been informed by senior management that the figure of 800 dismissals is contingent upon the company winning orders in the near future. In other words, if those orders do not materialise, more men will go. That is the blunt message that I was given. Therefore, it is essential that Scott Lithgow obtains Ministry of Defence orders in the shape of new conventional submarines. The Government could assist Clydeside communities by sending Ministry of Defence orders for surface vessels to Yarrow in Glasgow and submarine orders to Scott Lithgow.
May I inform the Minister of the new circumstances of Scott Lithgow? In terms of job flexibility, productivity and industrial relations, there has been a significant change in the company. In job flexibility, the yard is ahead of all other yards in Great Britain. The Secretary of State acknowledged the positive and welcome changes that have taken place at Scott Lithgow when he recently met a delegation from the Inverclyde district council.
I would happily invite the Minister, and his ministerial colleagues at the Department of Trade and Industry and the Ministry of Defence, to visit Scott Lithgow and meet the management and work force. If they were to accept that invitation, they would quickly perceive a new sense of realism that exhibits itself in collective bargaining.
289 I have several questions to ask the Minister, and I acknowledge that he may not be able to answer some of them today. In the light of the Cabinet's decision concerning the budget allocations for different Departments, will Scott Lithgow receive the orders, which are desperately needed, to build conventional submarines? I assure the Minister and his colleagues that those submarines would be built to first-class standards and would be delivered on or before the specified and agreed delivery dates.
Clark Kincaid— formerly John G. Kincaid, a very old and famous Clydeside engine builder—recently built the engine for the Cunard ship to replace the Atlantic Conveyor which was sunk in the Falklands conflict. Cunard was delighted with the performance of Clark Kincaid in building that engine. Clark Kincaid is now literally the last engine builder on the Clyde and the River Tyne. I was deeply and bitterly disappointed that the Cunard company chose a German marine engine builder to construct the nine engines that are to be fitted into the Queen Elizabeth II in a West German shipyard. Far too many orders go abroad, to the detriment of British industry. I should say "industry in the United Kingdom", because Harland and Wolff in Belfast or Clark Kincaid could have built those engines.
Large numbers of British industrialists and companies seem to have taken to heart Dr. Johnson's apothegm that patriotism is for the scoundrel only. Speaking as one such scoundrel, I say that orders should be placed nearer home. In that connection, I am deeply concerned at the behaviour of the members of the board of Caledonian MacBrayne and that company's chief executive. In the past 15 months, they have placed vessel orders with Humberside shipyards worth just under £10 million. Both Ferguson and Ailser of Port Glasgow and Troon and Hall Russell of Aberdeen, two excellent companies, are in desperate need of orders. Will the Minister comment on that disgraceful trend?
I received a letter recently from the Minister which seemed to accept the chief executive's claim that there was a substantial difference between the success of Humberside tenders and the unsuccessful Scottish bids. Since I received the hon. Gentleman's letter, two more orders have floated down to the Humber. Will he comment on those substantial differences? Is he concerned that Scottish yards are losing Scottish orders?
I should be grateful if the Minister would say a word or two about the circumstances surrounding the National Semiconductor company. Is he confident that it will escape from its current difficulties and expand in Greenock, as predicted by his right hon. Friend the Secretary of State for Scotland?
I and many of my constituents would be interested to hear what the Minister has to say about the Inverclyde initiative. Can he give me an assurance that the Inverclyde district will obtain a fair share of the jobs generated by the Locate in Scotland unit? There are those in Scotland who believe that the new towns benefit from positive discrimination in the creation of jobs by that unit. If that is a myth, I am sure that the Minister will be pleased to blow it away this afternoon.
During a speech last Friday evening in Greenock, Mr. Ian Wilson, the chief executive of Inverclyde district council, said: 290
Inverclyde is at an economic crossroads. I believe that we can turn along the road of economic recovery. The road will be uphill and the effort required will be great, but it is not beyond our capabilities.I share his anxiety, his faith in the community and his hopes for the future. However, a great deal rests with the Government, in the shape of the Scottish Office.I am looking not for charity, but for assistance. Among other things, we need MOD orders for Scott Lithgow in the shape of conventional submarines—the SKK2400 type. We need a much larger state investment in the Inverclyde initiative; the state is not putting enough into it. The Scottish Development Agency must do a great deal more, rather than being brought in as a rescue agency when job losses are reported on the front pages of newspapers. We want a more sympathetic and constructive response from the Scottish Office towards those developing community businesses, self-help agencies and others seeking to promote both services and jobs in our communities. The Government must give assistance now.
Is it the Government's intention to increase the financial resources required for the renovation of Scotland's decaying council houses? Greenock and Port Glasgow, as two communities, are in desperate need of such financial assistance. If a decision to give that sort help was taken, that would improve the health and welfare of the tenants and would create more jobs.
§ The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram)I am grateful to the hon. Member for Greenock and Port Glasgow (Dr. Godman) for taking this opportunity to raise a matter of some concern to his constituents, and which is also of concern to Government and non-Government agencies, which, as I am sure he realises, are working hard to alleviate the unemployment problems of the area that he represents.
The Government share the hon. Gentleman's worries about the level of unemployment in his constituency. I am sure that we all appreciate some of the problems that he so graphically illustrated in terms of individual cases. He raised a series of important questions and I shall try to answer as many of them as possible in the time available. Any that I am not able to deal with will be answered in writing.
The hon. Gentleman's last question related to housing. I am sure he is aware that last year, on the housing revenue account allocation, an increase of nearly 25 per cent. was made available across Scotland. I understand that Inverclyde benefited considerably from that increase. I am sure that, in fairness, the hon. Gentleman will appreciate that that increase has been of considerable benefit to his constituency.
It is important to understand the special combination of circumstances which has brought about the situation which the hon. Gentleman has described in his constituency. It is not a new phenomenon, and certainly not one which has magically appeared since 1979. A look at the background to the problem will reveal its underlying causes and complexities and why it cannot be resolved by the simple expedient of throwing more and more money at it.
The Inverclyde area has a long history of employment difficulties. Between 1971 and 1981, during a period which saw little change up or down in the employment 291 position elsewhere in Scotland, the area lost substantial numbers of jobs. These job losses were the early signs of a basic weakness in the local economy and its vulnerability to the effects of the fundamental structural changes which were beginning to work their way through the British economy at large. The weakness, of course, is the area's dependence on a narrow manufacturing base and on shipbuilding in particular.
Manufacturing has been in steady decline since the 1960s, but the rate of contraction has accelerated as a result of the loss of our international competitiveness—the competitiveness which the Government's economic policies are designed to restore and which we are beginning to see restored. In 1981 the manufacturing sector in Inverclyde accounted for 39 per cent. of local employment, compared with 25 per cent. for Scotland as a whole. For this reason alone, the area was particularly exposed to the chill winds of international economic change.
There were other weaknesses in Inverclyde's economic structure. One of these was, and still is, the area's reliance on the fortunes of just a few large companies, notably Scott Lithgow, IBM and National Semiconductor. In 1981 establishments with more than 200 employees provided 57 per cent. of Scottish manufacturing output, whereas in Inverclyde the figure was a decidedly risky 83 per cent. Of course, the reliance of the local employment scene on three large companies brought substantial benefits to the area, which must be recognised. Indeed, while shipbuilding may have been of much reduced importance in recent years, it still provides substantial employment. Electronics, the other main source of manufacturing employment, has, until very recently at least, had a very favourable impact on local employment trends. Over the years these large industrial units have made available a wide range of employment opportunities which might not otherwise have existed in a town which saw its original locational advantages largely disappear with the decline of North Atlantic maritime trade and passenger traffic.
The danger, however, has always been that a setback suffered for whatever reason by one or other of the big three and causing it to shed labour would be felt keenly throughout the community. Because of the world recession in merchant shipbuilding, Scott Lithgow has shed jobs in the past three and a half years. Having said that, even with the recent redundancies at Scott Lithgow, the present level of employment is about what was envisaged for the long term when Trafalgar House took over the yard. Despite what the hon. Gentleman has said, this is surely better than the total closure which seemed to be on the cards in 1984. For the future, the yard must continue to bid for orders in competition with other yards at home and abroad.
The hon. Member for Greenock and Port Glasgow referred to submarine orders. A decision on the submarine order must await completion of the detailed assessment of tenders, which inevitably takes some time. The Government's decision must of course be based on sound economic criteria.
The hon. Gentleman also mentioned the recent Calmac orders for two ferries. The ordering of these two small ferries was within the delegated authority of the Scottish Transport Group, and the decision on the contract is based on its commercial judgment.
I shall now deal with the electronics industry. We regret the current downturn in demand for silicon chips and semiconductors, but, given that circumstance, it is all the 292 more important that companies remain committed and receive our support to long-term investment in the latest equipment. This provides the best protection for employment and we must give these companies our wholehearted support. In the course of this year there have been difficulties facing the industry as a whole, in the US and in Europe. We in Scotland have not been immune from those difficulties, but it would be perverse in the extreme to ignore the brighter long-term prospects for the electronics industry and the leading position which Scotland has established as a major European centre for the manufacture of integrated circuits. The difficulties at National Semiconductor are disappointing, but, taking a longer perspective, as we must, it is encouraging that the company's massive investment programme remains in place. I am glad that the company remains committed to that programme and our commitment in the Government to supporting National Semiconductor should match that of the company.
The announcement earlier this week in the press that IBM is to cut production but not jobs must be looked at in an entirely different light. The scale of its difficulties is completely different and is minor by comparison. Effectively, it is adjusting production to match a fluctuation in its market. I am sure that I do not need to remind the hon. Member of IBM's contributions to the world economy, and in particular to the west of Scotland, where at Greenock it has its most consistently profitable plant in Europe. We believe that there are still major opportunities in electronics and in the silicon technology which is fundamental to success. I am glad to say that this is not just a Government view, but is backed by companies as significant as Digital, NEC and Hughes, all of which have announced very substantial investment programmes.
§ Dr. GodmanI share the Minister's sentiments about IBM. I thought I had made it clear that I had confidence in IBM and that I had no worries on that score.
§ Mr. AncramI am grateful to the hon. Gentleman. It is important to underline that point, because it is essential to confidence within his area.
I have taken some pains to point out that the picture of employment in Inverclyde is not as black as the hon. Member has painted. For example, since May 1979 offers of selective assistance in Greenock and Port Glasgow have amounted to nearly £22 million to bring on projects worth over £463 million, creating and safeguarding over 7,000 jobs, and if we look at Renfrewshire this year, we see that companies have committed investment or won contracts totalling well over £76 million—over £7.5 million every month. Nevertheless, I do not pretend that there is not a serious problem to be tackled.
Our priority is to achieve a healthier balance between the manufacturing and service sectors. The latter, which has been relatively buoyant nationally and holds out some of the best prospects of future economic growth, is underrepresented in the area, where it provides only 55 per cent. of jobs locally, compared with 62 per cent. in Scotland as a whole. In addition, services in the area have grown more slowly than their Scottish counterparts. Contraction of the area's manufacturing base has led to a loss of markets for industrial services, and population outflow has impeded the growth of consumer services. I am therefore surprised that out of 8,500 applications for our better business 293 services and better technical services schemes only a handful have come from Greenock—Port Glasgow or indeed Inverclyde in general.
A deep-rooted economic imbalance of this kind cannot be rectified overnight. The hon. Gentleman is aware that the Government believe that the long-term solution to the problem lies in the Inverclyde initiative, which is being promoted by the Scottish Development Agency, as the main vehicle for measures to assist the area. Its object is to provide new, permanent jobs through the regeneration and diversification of the economic base—an aim which cannot be faulted. The hon. Gentleman would like the Government's cash contribution to the initiative to be much higher, but I assure him that increasing the financial input would not have the effect that he seeks. The Scottish Development Agency is giving the initiative high priority, but rightly insists that expenditure must be on viable schemes which give a return to the local economy. At the present stage the main need is not for vast sums of money but for viable projects. It may well take some time to 294 develop these and they will require the wholehearted and active support of the community and the local authorities. I cannot overemphasise the importance of that.
The hon. Gentleman is aware that there are many other important initiatives within his area, not least the venture groups, and it is only time that precludes my dealing with them.
I am sure that the hon. Gentleman and others in the House will agree that the Inverclyde initiative is a comprehensive, imaginative and above all logical action programme which ensures that resources will be deployed to maximum effect in accordance with the carefully identified needs of the area, both present and future. It is certainly a more sensible approach than a purely speculative injection of large sums of money, and holds out the best hope that there is of rebuilding the area's economic base on sound foundations. I think that that will provide a more secure future for the hon. Gentleman's constituents.
§ The Question having been proposed at half-past Two 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 o'clock.