HC Deb 02 July 1990 vol 175 cc832-40

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

2.25 am
Mr. David Hinchliffe (Wakefield)

Even at this late hour, I am grateful to have the opportunity to raise several matters relating to my constituency. The closure of the Denby Grange colliery, the last pit in the Wakefield constituency, means that the period of the present Government has seen the complete destruction of an industry which had been the backbone of the Wakefield economy for generations. Although this debate is prompted by that closure, I wish to widen the issue. The Government are obstructing Wakefield's attempts to replace lost jobs in traditional industries. I should like to explain what we in Wakefield believe is needed from the Government to enable us to move forward in the process of re-industrialisation.

I am grateful to my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) for remaining until this late hour. I hope that he will catch your eye later, Mr. Deputy Speaker, so that he can briefly contribute in support of my arguments. My hon. Friend has argued much longer than I have, and I appreciate his support tonight.

I have no desire to paint an entirely black picture of the economy of the Wakefield district. As the Minister is well aware, there are some positive factors. I commend Wakefield metropolitan district council on its efforts with job regeneration in recent years to offset the rundown in traditional industries such as coal. The economic development department of the local authority has fought tooth and nail for new industry, with considerable success. The Minister is familiar with some examples—the Coca-Cola Schweppes Beveridges and Nacanco development came to the Wakefield 41 site in 1988, creating 180 jobs, with a potential for 500 jobs. The Wakefield 41 business park, which opened in October last year, has the potential for some 1,200 jobs, and we hope that it will be the success that we expect. Asda's new distribution centre in the Normanton industrial estate has the potential for some 350 jobs.

These developments have been achieved entirely through local effort. Companies have recognised the tremendous potential of the Wakefield district. The Minister is familiar with Pioneer, the Japanese audiovisual company, which has been attracted to the Whitwood Common site in Pontefract and Castleford. We hope that it will create 500 jobs in the first phase, and the number is expected to double in the second phase. The Minister will recall some months ago meeting the four Wakefield district Members of Parliament, the local authority representatives, and representatives of the Yorkshire and Humberside Development Association. We pressed him to give Government assistance to bring Pioneer to Wakefield to create much-needed jobs. We had tea and biscuits and sympathy, but not much help.

All the developments that I have mentioned are specific to the motorway corridor of the M1 and M62. It is of particular concern to the local authority that future developments on the corridor will be restricted by limitations on land.

The Minister may point to the fact that official unemployment figures have fallen recently. I would argue that that fall has been due in large part to the efforts of Wakefield district council to attract local employment. It is also important to stress that the Government's changes in the unemployment count have had a direct bearing on the specific circumstances of Wakefield district. I refer in particular to the Government's 29th adjustment of the count, aimed at reducing the unemployment figure—the amendment of the redundant mineworkers scheme, which has relieved a number of ex-miners in the Wakefield area of the requirement to sign on. In an area where the coal industry is in decline, that is bound to have a huge impact on the number of people registering as unemployed.

The closure of Denby Grange colliery is a body blow to Wakefield's hopes of a revival in its economic prospects. It is particularly bad news for those employed at the pit, many of whom are known to me personally and have worked so hard to keep the pit going over a number of years during which its future has been threatened. It is particularly sad to note that a number of the employees affected had already experienced two or three pit closures before moving to Denby Grange. The numbers involved in the closure are worrying. About 200 contractors are losing their work at the pit because of the closure. About 620 miners are directly affected, as well as about 50 administrative and managerial staff. The bulk of the employees affected are under 30, so they will be seeking alternative employment. I know that the Minister has had a long hard day, but I must point out to thim that that brings the total of pit job losses in Wakefield under the present Government to around the 16,000 mark.

My hon. Friend the Member for Pontefract and Castleford will echo this point. The map for assisted areas was last drawn up in 1984, but the majority of job losses in the coal and related industries have occurred since then. In 1984, Wakefield had 16 collieries and 15,340 miners. We now have three collieries employing 2,690 miners. Those figures represent a loss of 13 collieries and more than 13,000 jobs in just five years, since the last assisted area map was drawn up. In the same period, job losses in mining-related industries have totalled nearly 3,000. Subcontractors have been directly affected and mining engineering in Wakefield has been badly affected, with hundreds of people losing their jobs.

All this gives cause for concern about our export record. Many of the mining engineering companies in Wakefield are major exporters and earners for Britain. Some companies are worried that the decline in the home coal industry makes it more difficult for them to market their products to foreign Governments. A recent study of the engineering sector by Leeds polytechnic said that Wakefield has an engineering industry structure which is unfavourably biased away from the relatively buoyant segment and in favour of a segment which is nationally experienced high relative decline. It is worth mentioning also that, since the Government came to power, Wakefield's other backbone industry, the textile industry, has lost about 5,000 jobs.

The Government's policy is obstructing Wakefield's attempt to re-industrialise, and the side effects of that policy have had a major impact on our continuing problems. High interest rates are a case in point. Last week, the Forum of Private Business, a lobby group representing 17,000 companies, conducted a survey suggesting that the Government's high interest rate policy had cost Yorkshire and Humberside almost 70,000 new jobs, a number of which would have come to the Wakefield district to offset the job losses in traditional industries.

We must also consider the way in which the Government have failed to invest in the infrastructure which would have encouraged renewed investment and employment in the Wakefield district. The most recent example of that is the Government's failure to invest in high speed direct rail links from the north to the channel tunnel. That makes the task of job creation in an area such as mine that much more difficult.

Government policies have led directly to the export of British jobs from areas such as Wakefield. That has a major bearing on our predicament, particularly in the coal industry. The privatisation of electricity generation has led directly to a huge increase in coal imports. The Government have actively supported private measures such as the Humber Ports Bill promoted by the Minister's Parliamentary Private Secretary which have been geared towards importing bulk cargos such as coal from countries such as South Africa.

Last month an Oxford economist called Terry O'Shaunessy said that the Government's policies will not only lead to further massive mining job losses but will increase the trade deficit by up to £1,500 million per year. In that respect, the Government's policies are economic madness, especially in view of the present huge balance of payments deficit. Obviously, such policies are a death warrant for what is left of the coal industry in Wakefield district.

I wish to pinpoint the two main areas which are of major concern to my colleagues in the Wakefield district and to Wakefield district council in seeking to create new jobs and industries in the area. We face those problems against a background of difficulties which in many instances are related to Government policies as we try to re-industrialise the area.

Wakefield has been included in the European Commission's RECHAR programme—an aid programme for coalfield areas. When it was announced, it appeared to be a major boost for the Wakefield district. Unfortunately, there is a nasty sting in the tail as a result of Government policy. The economic development officer of Wakefield described it as a poisoned chalice when I spoke to her yesterday.

I hope that the Minister will respond to that particular point when he replies. Because Government restrictions on local authority capital spending were determined before it was known that RECHAR funds would be available, in order to spend RECHAR money other planned projects have to be shelved or RECHAR has to be spent on projects that would have gone ahead anyway. The whole purpose of RECHAR projects is that they should result in additional schemes targeted on local problems such as those in Wakefield with the declining coal industry.

The British Government, however, are the only Government in the Community completely to undermine the intention of the RECHAR programme. That has enormous obvious consequences for places like Wakefield. One could say with regard to RECHAR, "The EEC giveth, and the British Government taketh away."

I wish now to consider assisted area status. The Minister is aware that in Wakefield we have been pressing for a long time for that status because the boundaries were drawn up in 1984 and they are now completely irrelevant for areas such as Wakefield. One way to overcome the Catch-22 situation that I have described with regard to RECHAR is for the local authority concerned to be designated an assisted area or urban programme area. That would extend the local authority's capital borrowing powers by the cost of whatever schemes are acceptable to central Government and allow EC finance to be set against the cost. Those are schemes in addition to the original capital programme and therefore fit the EC requirement. I plead with the Minister to listen specifically to that point, because without that secondary assistance RECHAR is largely irrelevant to many of the problems that we face in Wakefield.

In Wakefield—my hon. Friend the Member for Pontefract and Castleford will support me in this—we believe that there is no justification for the continued exclusion of Wakefield from assisted area and urban programme status. The changes in the employment base of Wakefield since 1984 mean that we should be included in the programme to do the job that our constituents want us to do. Wakefield must be unique, and it must be recognised by the EC for RECHAR, but it has had no recognition from the Government, although we have put our problems to Ministers time and again. This is my third Adjournment debate on the subject. My hon. Friend has been pressing the matter for years and has also had an Adjournment debate on it.

Regional assistance is now totally out of date and must be revised urgently. I hope that the Minister will appreciate these points, the efforts that we have made, and the fact that we have had some success in our task. We could have much more success with the kind of assistance that I have described.

2.40 am
Mr. Geoffrey Lofthouse (Pontefract and Castleford)

rose—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. Does the hon. Member for Pontefract and Castleford (Mr. Lofthouse) have the consent of the hon. Member for Wakefield (Mr. Hinchliffe) and the Minister?

Mr. Hinchliffe

Yes.

The Minister for Industry (Mr. Douglas Hogg)

Yes.

Mr. Lofthouse

I shall be brief to allow the Minister to reply as fully as he possibly can.

I am grateful to my hon. Friend the Member for Wakefield (Mr. Hinchliffe) for allowing me to intervene in his Adjournment debate, and I congratulate him on being successful in the ballot. As my hon. Friend said, this is the latest of many debates to try to influence the appropriate Minister of the needs of mining communities, especially in the constituencies of Wakefield and Pontefract and Castleford. I probably sound like a parrot: I have explained the problem time and again, but, unfortunately, my words have so far fallen on deaf ears.

The Minister will recall that the Energy Select Committee published two major reports—one on the coal industry, and one on the privatisation of electricity production. Those reports highlighted the problems that have been and will be created by further pit closures in mining communities. However, to date, my constituents have not received any aid to attract alternative industry. As my hon. Friend has said, we have had some success with Pioneer and Coca-Cola, but that success was brought about by the efforts of the local authority. There has been no financial assistance from the Government.

We are approaching a serious situation because the rundown of the coal industry has not ended. In fact, the rundown will be rapid over the next two or three years and beyond, but there are no signs of any Government assistance.

At the time of the Denby Grange announcement, there was another announcement on the Allerton Bywater workshops in my constituency. Four hundred men lost their jobs. I went to the workshops a short while ago, and it was quite obvious that quite a lot of money had been spent there. Looking at the new buildings, one would think that capacity would last for years and years. One old-timer in the workshops said, "There's something going on up here. They're spending a lot of money. I'll bet they're going to flog it." I bet he is not far off. I bet that somebody will get hold of that wonderful workshop with all its equipment and put it into the private sector. In my constituency, 10,000 jobs have been lost since the miners' strike, and we expect many more to go.

I support all that my hon. Friend has said. I understand the difficulties about redrawing the intermediate area status map because they have been put to us year in and year out. It is ironic that we enjoyed intermediate area status until about 1981 when we had all the pits working in the constituency.

There are to be further rundowns, and the Government should provide assistance as soon as possible. When the time comes to redraw the map, I hope that the Minister will find a way to include Wakefield and the Pontefract and Castleford travel-to-work area. There will be great devastation as a result of the Government's deliberate policy of electricity privatisation. The decision last week to subsidise the nuclear power industry will also hit the coal industry. How can the Government justify the running down of a major source of energy and at the same time be prepared to subsidise another form of energy, the full cost of which is not known? Nobody is really concerned to find out the true cost, including decommissioning, of nuclear energy.

If the Government continue to wipe out the coal industry, they have an obligation to encourage alternative employment for men whose average age, as my hon. Friend the Member for Wakefield has said, is 30 to 33. Such men cannot be thrown on the scrap heap and if they are not provided with alternative employment there will be social unrest. I hope that the Minister will seriously consider our request.

2.46 am
The Minister for Industry (Mr. Douglas Hogg)

The hon. Member for Wakefield (Mr. Hinchliffe) has raised the question of the closure of the Denby Grange colliery and its implications for the Wakefield district. I fully recognise his concern about that. However, as I am sure he is aware, and he accepts, decisions on pit closures remain a commercial matter for British Coal. It is not for the Government to seek to intervene in these commercial decisions. They are for the management to make in the light of its costs and the relative competitive position of what it produces. One understands the uncertainty, worry and disturbance that this is bound to cause the miners involved, their families, and naturally the wider community.

As the hon. Gentleman will know, where jobs are lost, British Coal offers generous redundancy terms that are in line with the best available in British industry. To date, British Coal has managed the restructuring of the industry without the need for compulsory redundancies. Any miner wishing to stay has had the option of moving to another pit rather than taking redundancy.

The hon. Members for Wakefield and for Pontefract and Castleford (Mr. Lofthouse) concentrated on the effect that the closure will have on the Wakefield area. They commented on what they see as a shortage of Government assistance to help the area overcome problems caused by the rundown of the local mining industry. Both hon. Gentlemen, most notably the hon. Member for Pontefract and Castleford, called on the Government to give Wakefield assisted area status. I am afraid that I must make it plain that there is no prospect of granting such status in advance of any general review of the assisted area status map.

Unemployment in Wakefield and Dewsbury currently stands at 7.3 per cent. compared with the Great Britain average of 6.2 per cent. The average for all intermediate areas is 8 per cent. and the average for all development areas is higher at 11 per cent. I had the pleasure of meeting both hon. Members some time ago when they came to see me about a particular inward investment. At that time we discussed the prospects of giving assisted area status to Wakefield.

The plain truth is that the number of registered unemployed in Wakefield and Dewsbury does not justify according the area assisted area status—certainly not now. Moreover, as I explained to both hon. Gentlemen when they were good enough to see me, we do not intend to redraw the map during the lifetime of this Parliament. Therefore, there is no immediate prospect whatever of Wakefield being given assisted area status. However, when the map is reviewed, the position of Wakefield will be considered. What both hon. Gentlemen have said will be taken into account.

Mr. Lofthouse

Although the Minister has given the figures for Wakefield and Dewsbury and compared them with the national figures, he has not referred to the figures for the Pontefract and Castleford travel-to-work area, which are much higher. It is one of the blackspots. It is a mining community within the Wakefield metropolitan district area. The Government will find, if my figures are correct, that unemployment is about 11 per cent.

Mr. Hogg

I make two points in reply to the hon. Gentleman. First, the Castleford and Pontefract area is probably too small to attract assisted area status. The matter could be examined but it is probably too small on its own. Secondly, we do not have it in mind to redraw the map during the lifetime of this Parliament.

Mr. Lofthouse

But Pontefract and Castleford is a travel-to-work area which previously enjoyed intermediate area status. The boundaries were extended out into the rural areas at about the same time. That brought unemployment down. Some people may have thought that that was a deliberate policy. Nevertheless, the area is a travel-to-work area. It enjoyed that status before, and it was considered large enough to have intermediate area status then.

Mr. Hogg

Whatever the force of the hon. Gentleman's point that it is a travel-to-work area, we do not propose to redraw the map during the lifetime of this Parliament. The hon. Gentleman knows that because we discussed it when we had the pleasure of meeting some months ago.

I now wish to turn to several issues which were directly or indirectly raised during the debate. The Government have been criticised for doing insufficient to assist the development of employment in the area. I do not agree with that criticism, but before I come to the detail of what the Government are doing—withal the time permitted to me—it is right to say that British Coal provides considerable assistance in the mining areas of Yorkshire which have been affected by the pit closures. British Coal Enterprise Limited was set up in 1984 to help create employment opportunities in the coalfield regions. It provided loan finance to businesses setting up, expanding or relocating in mining areas. In the Yorkshire region alone it provided loans of £8.9 million to 415 businesses. That led to the creation of over 5,000 jobs. I understand that approximately 30 per cent. of these jobs relate to the Wakefield metropolitan district council area.

British Coal Enterprise has also provided financial sponsorship to the Wakefield enterprise agency and funded managed workshops and small business units. These schemes aim to provide new employment opportunities for anyone in the coal industry.

Another aspect of Government activity, which I must mention briefly—I have only two minutes left—is the effect of the consultancy initiatives operated by the Department of Trade and Industry. As the House will be aware, the scheme aims to encourage small and medium-sized businesses to recognise the need for, and benefit from, the use of outside expertise. My Department provides 50 per cent. of the cost of such consultancies in the Wakefield area. To date, over 70 companies in the Wakefield area have taken advantage of it.

My Department also runs the research and technology initiative under which there are several schemes to encourage collaborative industrial research projects. Firms in Wakefield are eligible.

I should mention that Wakefield has an enterprise zone, at Langthwaite Grange. It has also been accorded the status of a derelict land clearance area. This means that public sector reclamation schemes qualify for derelict land grant—

Mr. Hinchliffe

Will the Minister give way?

Mr. Hogg

I shall not. I have only one more minute of my reply.

This means that public sector reclamation schemes qualify for derelict land grant at a rate of 100 per cent. of eligible costs, and private sector schemes at a rate of 80 per cent.

I am glad to say that since 1985 Wakefield has received more than £2.3 million in derelict land grant, and as part of the council's three-year rolling programme a further £650,000 has been allocated by the Department of the Environment for the financial year 1990–91.

The Government's small firm service has also been—

The motion having been made 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 five minutes to Three o'clock.