HC Deb 13 June 1991 vol 192 cc1054-63 4.12 pm
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley)

With permission, Mr. Speaker, I will make a statement about special support measures that the Government propose to make available for Cumbria.

Mr. Max Madden (Bradford, West)

On a point of order, Mr. Speaker.

Mr. Dave Nellist (Coventry, South-East)

On a point of order, Mr. Speaker.

Mr. Speaker

Order. Both hon. Members who are standing know that we take points of order in their proper place, which is after statements.

Mr. Madden

But the Leader of the House is leaving the Chamber, Mr. Speaker.

Mr. Speaker

He may come back.

Mr. Lilley

Barrow and West Cumbria suffer from a unique combination of geographical isolation and heavy dependence on single employers. Barrow is overwhelmingly dependent on the Vickers shipyard, which has recently announced a further 5,000 to 6,000 job losses over the next three years. The Copeland area is heavily dependent on employment at the major British Nuclear Fuels construction project, which is now nearing completion, bringing an end to about 5,000 local construction jobs over the next two years.

There is therefore an urgent need to help the area both to attract and to generate new jobs. Following consultations locally, my Department, together with a number of the local authorities and regional development agencies, funded a study to assess Cumbria's economic circumstances and prospects.

We received the report yesterday. It concluded that there were great strengths in the area, in particular the highly skilled local work force, but also serious weaknesses, notably in communications and in the availability of modern factory and commercial premises. The Government will, of course, be studying the report in detail, but in the meantime we intend to set in hand immediately many of the report's recommendations.

I am therefore proposing a package of new support measures. First, I am asking English Industrial Estates to undertake a major programme to provide factories and work space in the Barrow and Whitehaven travel-to-work areas. This will make modern premises available to house local firms and to attract new enterprises into the area. It will also make serviced sites available for private developers.

We expect the programme to provide over 300,000 sq ft of floor space and to make available about 30 acres of serviced land, at a cost of up to £15 million over three years.

Secondly, we are setting up a locally based action team to help projects stimuate new business activity in Furness and West Cumbria. The team, which began work on 1 July, will work closely with local agencies to ensure that our action is co-ordinated effectively with other local initiatives and to bring about effective delivery and promotion of Government and European programmes. The action team must be able to act and respond quickly. We are therefore making available to it funds of up to£1 million to be used to help projects that would not otherwise have gone ahead.

Thirdly, a high-level co-ordinating group is being established at regional level between Government Departments. This group will ensure that all Departments' programmes to tackle the area's problems are coordinated to best effect. It will monitor and evaluate the support programmes available locally and will liaise closely with other agencies. The group will provide further advice on the consultant's report and the Government will then see if other help for the area, within current programmes, is appropriate and feasible.

I have already ensured that details of the skills and technology available in the area, as well as the new factory building programme, are passed on to the Invest in Britain Bureau. It, in turn, will pass this information on to potential inward investors.

In addition to help from DTI, a number of Government initiatives are planned. The Department of Transport has a £32 million programme of works for the strategically important A590 in south Cumbria. Of more specific relevance to Barrow is the £12.5 million A590 Dalton bypass, which will be a key element in improving communications between Barrow and the M6. It is also proposed to improve the trunk road that will link Barrow to the bypass.

As for derelict land, the Department of the Environment is discussing with local councils further opportunities for land reclamation and noise and environmental improvements, with a view to improving the area's attractiveness to inward investors. The Rural Development Commission is also giving priority under its programmes and has invested over £1.25 million in Westlake science park and Moresby industrial park. To help the local work force acquire skills for future employment, the Cumbria TEC has been allocated an extra £1 million this year.

I am glad to say that the European Commission has recognised the difficulties facing west Cumbria, which is now eligible for European regional funds. We have recently submitted an application for Barrow to receive £2 million funding from the EC's PERIFRA programme. I am seeking clearance from the Commission for both the English Industrial Estates programme and the action team expenditure that I described earlier.

Cumbria faces severe industrial and employment difficulties over the next few years. The Government recognise that and are not prepared to let the region fall into decline. We shall consider further action in the light of the consultants' report but, in the meantime, the measures that I have announced today will provide an immediate response to the area's needs. They demonstrate the Government's faith in the local community and amount to a unique package of support to combat a unique combination of problems. They will provide support fast and effectively, and I commend them to the House.

Mr. Gordon Brown (Dunfermline, East)

We welcome the Government's recognition of the severe problems faced by Barrow and the whole of Cumbria. We also welcome the statement about the need for special measures and the Government's new view that what the Minister calls "special and support measures" are needed in areas of economic change and difficulty.

The Minister said that the programme by English Industrial Estates will cost £15 million over three years. Is that new money for regional policy from the contingency fund, meaning that his Department's budget is now increased by £15 million over three years, or has the money simply been taken from the Department's other budgets? Will he confirm that his contribution to the second central proposal—a locally based action team—is, as I have been told this afternoon, composed of two civil servants? If so, that is a generous definition of the term "team". Will the Minister confirm that his third central proposal, a high-level interdepartmental team, has already been set up and has been working for some weeks? As for the other measures from other parts of Government, will the Secretary of State confirm that each of them, including the transport programmes, have already been announced by other Departments, in some cases, many months ago?

The Secretary of State spoke of more help for Cumbria TEC, but will he confirm that, contrary to the impression he gave, Cumbria TEC is losing 6,000 training weeks this year, even as unemployment in the north-west worsens by 1,000 a week? Furthermore, its budget is to be cut from £18 million to just over £16 million—a 9 per cent. cut even after taking into account the £1 million that the Secretary of State mentioned, which was given in March.

If the Secretary of State wants to help Copeland, why are the Government delaying application for European regional development fund funding that has already been approved by the regional commissioner?

What does the statement mean for regional policy in the north and the rest of the country? Does it mean that the Secretary of State now believes in regional policy? Does it mean that he dissociates himself from the remarks in the pamphlet from the Minister responsible for regional policy and the No Turning Back group, of which he is a member, in which it is said that regional policy is a phoney activity for Government? If the Minister now recognises the problems for Cumbria, is he prepared to recognise the problems of other parts of the country facing the worst recession anywhere in Europe?

Is it not the case that, having cut regional aid in the north-west by 67 per cent. over the past 12 years, the Secretary of State is planning to cut it this year, next year and the year after in all parts of the country? Is he prepared to reverse that policy and consider the creation of regional development agencies, as advocated by the House of Lords Committee? Is he aware that, if he is to deal with the problems of the country county by county or region by region in announcements to the House, as he has set a precedent for doing today, hon. Members on both sides of the House will be expecting further statements on the problems of the midlands, of the rest of the north, of the south-east, of the south-west and of other areas? They will all want more commitment to genuine new measures and to new funds than we have seen today.

Mr. Lilley

I am grateful that the 'hon. Gentleman welcomed the statement, albeit rather grudgingly. He asked about the English Industrial Estates money. That money comes from its budget—that is what the budget is for. As to the action team, the people whom the hon. Gentleman mentioned will be joined by another from the local TEC, and they will be working with all the local agencies. Their function is to mobilise those local agencies, co-ordinate their initiative and make sure that the combined effect is greater than the sum of the parts.

The hon. Gentleman claimed that all the measures in my statement have been announced before, but that is not the case. The Dalton bypass announcement has not yet been made.

As to Cumbria TEC, it is clearly up to the TEC itself to decide how its money is to be deployed. We believe in devolving responsibility as far as possible to such local initiatives.

The hon. Gentleman said that the European regional development fund application had been delayed, but it has now gone ahead.

The hon. Gentleman asked, in rather a party political way, whether we believe in regional policy. Yes, we do, but we believe in focused, targeted regional policy, not the indiscriminate, wasteful and ineffective policies pursued to so little effect by the last Labour Government. There is no question of making statements about every region, county or city. The hon. Gentleman should surely be able to recognise the unique problems of the area, such as isolation and the dependency on two employers. They call forward this response, which is an appropriate one.

Mr. Cecil Franks (Barrow and Furness)

It is sad that the Labour Opposition have neither the grace nor the stature to recognise and accept good news when they hear it. On behalf of my constituents, I thank my right hon. Friend the Secretary of State for the measures that he has announced. They are good news for Barrow, and his statement is an excellent example of how the machinery of government can work quickly and effectively. The job losses in the shipyards in Barrow were announced on 20 March. On 25 March, the Under-Secretary visited my constituency. A report was commissioned, and a little over two months later, we have this statement.

I should be grateful if my right hon. Friend would clarify several points. First, will he ensure that the action team to be based in Barrow has seconded to it someone with experience of planning procedures and of the compass of machinery of local government? Secondly, can he at this stage give some apportionment of the 15 million allocated to English Industrial Estates as it relates to Barrow and to Whitehaven? Thirdly, will he confirm that Barrow's application to the European Commission for the PERIFRA programme is ranked No. 1 in the Government's submission?

Fourthly, will my right hon. Friend recognise that inward investment, if it is to be successful, requires good communications, especially roads? Is he aware that the A590, the only trunk road linking Barrow with the M6 over one hour's drive away, at one stage literally goes through a farmyard? Can he elaborate on the proposals to improve the A590? Can he also clarify his reference to the Dalton bypass, which was first requested by the then local council 54 years ago, in 1937?

Finally, may I place on record my deep appreciation of my right hon. Friend's role in co-ordinating the initiative and especially of my hon. Friend the Parliamentary Under-Secretary for Industry and Consumer Affairs in his role as regional Minister? I am especially grateful to him.

Mr. Lilley

I am grateful to my hon. Friend for his thanks and for his especially well deserved tribute to my hon. Friend the Under-Secretary of State. I want to pay tribute to my hon. Friend the Member for Barrow and Furness (Mr. Franks) for his diligence and persistence on behalf of his constituents and those in neighbouring areas. He has persisted with great effect and he has left no stone unturned. I hope that he and his constituents recognise that the Government, as he said, have endeavoured to respond as speedily as possible.

My hon. Friend asked whether someone with experience of planning and all the problems that that poses locally would be in the team. I can assure him that a senior official with at least 10 years' experience of those problems will be in the team. I agree that that is extremely important in getting things moving.

My hon. Friend asked about the apportionment of the £15 million English Industrial Estates money between his constituency and neighbouring areas. We expect that the apportionment will be roughly 50:50, although that will depend very much on the final judgment of English Industrial Estates. My hon. Friend also asked about the ranking of PERIFRA applications. There are a number of applications and we will pursue them all as hard as we can —not least that in his constituency. There is no specific ranking.

My hon. Friend was right to say that good communications are the key to an area that is geographically so isolated. We have recognised that. The Dalton bypass will go out to tender in August and I hope that construction can begin this September. I know that there are other improvements to be made of the roads in the area. That is catered for in part by the measures that I mentioned in my statement.

My hon. Friend knows that his constituents largely depend for their livelihood on constructing nuclear submarines. He is aware, as I am, that the problems would be manifoldly worse if we had a Labour Government who cancelled the fourth Trident submarine. It was significant that the Opposition Front-Bench spokesman, the hon. Member for Dunfermline, East (Mr. Brown), did not mention that. I call on him to clarify whether Labour would—as I believe it would—cancel the fourth Trident submarine.

Mr. Eric Martlew (Carlisle)

Does the Secretary of State realise that Carlisle is in Cumbria? He has not mentioned my constituency, and there will be a great disappointment among the 3,500 people on the dole there. Will he join me in congratulating Barrow council and Cumbria county council on their efforts in lobbying him? May I congratulate the Secretary of State personally on the massive U-turn that he has made? He used to be known as a dry Minister; he is now obviously very wet. Many of us suspect that this is all to do with saving the job of the hon. Member for Barrow and Furness (Mr. Franks) and not with helping the unemployed in the county.

The Minister must be aware that the new money announced today is old money and Cumbria TEC is abandoning its employment training schemes since the money is not available because the Minister cut it. It is obvious that the Minister has been on the road to Damascus, but has he been on the road to Barrow lately? We have had a Conservative Government for 12 years, but they have done nothing about the Dalton bypass. Now that it looks as though we are coming up to a general election, they talk about getting the work started, but it is too little, too late, not only for Barrow, but for Cumbria. How many jobs does the Minister plan to create through the plans announced today?

Mr. Lilley

I am grateful to the hon. Gentleman for reminding me of his constituency. If it were appropriate, I would echo the words of my hon. Friend the Member for Barrow and Furness (Mr. Franks), to whom the primary congratulations are due.

The hon. Member for Carlisle (Mr. Martlew) made some strange remarks about this being a wet or interventionist measure. There is no question of us going into the business of picking winners. We shall not establish a quango such as the defence diversification agency which the Labour party proposes, but of which it is so ashamed that the hon. Member for Dunfermline, East (Mr. Brown) did not mention it.

An extra £1 million has been allocated to TECs. That is a substantial sum for the district and meets the criticism of the hon. Member for Carlisle. The hon. Gentleman said that the action was too little, too late; I received the report from the consultants yesterday, and I am acting today.

Mr. Michael Jopling (Westmorland and Lonsdale)

Is my right hon. Friend aware that his statement is most welcome? He deserves the warmest congratulations for what he has done so quickly and should not be subject to carping criticism from the Labour party.

Will my right hon. Friend look again at the communication problems to which my hon. Friend the Member for Barrow and Furness (Mr. Franks) referred? Will he consider what he can do to press for improvements to the A590, particularly at High Newton, because that bit of the road is likely to become a major bottleneck? Will he arrange meetings with British Rail to see what can be done to improve the abysmal connections with the main line from Barrow? Finally, will my right hon. Friend make some positive assessment of how much greater the problems of Barrow and west Cumbria would be if the Labour party, with its policies of curtailing the overall nuclear programme in relation to nuclear power and the fourth submarine, were ever to come to power? Would not that be totally disastrous for that part of the world?

Mr. Lilley

I am grateful to my right hon. Friend for his remarks. He is absolutely right to focus on the communications issue, which is the key. I shall certainly press his point about the High Newton bypass, which has yet to go through planning procedure. The necessary criteria will have to be met, and it is important that they are met as rapidly as possible. The consultants' report mentions a number of measures relating to communications that are not included in their list for short-term, immediate action. We shall study those measures and consider them for additional action later. I shall take up with my right hon. and learned Friend the Secretary of State for Transport my right hon. Friend's point about improving the quality and calibre of the service provided to the district by British Rail.

My right hon. Friend mentioned the impact on employment in the district which the Labour party's defence proposals would have on the district were they to be implemented. Those proposals would have absolutely terrifying and disastrous results for the district. A single, nuclear submarine takes 16 million man hours of work to produce at Barrow. The cancellation of the fourth submarine by the Labour party would be a disaster. I do not think that it is honest of the Labour party to ignore that question and fail to say anything. The last Labour party conference passed a resolution which would have the effect of cutting defence spending in this country by about £9 billion. One can be certain that the impact of that on Barrow, and on many other parts of the country, would be devastating.

Mr. Alex Carlile (Montgomery)

While the Secretary of State's announcement is welcome, will he be more specific and tell the House how many of the 11,000 or so lost jobs he expects to be replaced as a result of his proposals? Will he confirm that emphasis and priority will be given to creating jobs in the manufacturing sector, of a kind that people who have worked in the construction and shipbuilding industries will feel that they can fill? Will the Secretary of State say whether Cumbria's former coalfield community is due for any help under the European Community's RECHAR programme? If so, when will the Government stop blocking those funds by refusing to comply with the conditions that the Community lays down?

Mr. Lilley

I am grateful to the hon. and learned Gentleman for welcoming my statement. We cannot estimate how many jobs will be created by such a measure. It is designed to create the conditions that will attract business and create opportunities for local businesses to establish themselves and to expand. The outcome will depend very much on the response of business locally, from the rest of the United Kingdom, and worldwide—because we will be advertising the facilities and the high skills offered by the labour force through the Invest in Britain Bureau to potential inward investors overseas.

The hon. and learned Gentleman asked whether the effort will be primarily or specifically aimed at manufacturing jobs. Yes, it will. The factory building is obviously of that nature, and is geared to take up the slack and to use the skills of the people who live in Barrow and the surrounding constituencies.

As to the RECHAR programme, the hon. and learned Gentleman may know that I had a useful meeting with Commissioner Millan on that subject, and I am pressing him to be more flexible and to remove the objections that he operated until recently.

Mr. Richard Holt (Langbaurgh)

Will my right hon. Friend accept a small reminder from me that the policy that he announced today is not a precedent or anything new? It is not dissimilar to that which was operated in Corby and Consett after the steel shutdowns. Teesside has seen regeneration as a consequence of Conservative policies under the development corporation, and the work and investment that has been brought to the area are all the result of the Government's specific and directed regional policy. However, I suggest to my right hon. Friend that he pays some attention to the situation in respect of ICI.

Mr. Lilley

My hon. Friend never misses a chance. He is right to remind the House of the successful precedents of Corby and Consett. We have worked on the basis that targeted and focused support is much better than general, across-the-board subsidies that largely go on dead weight cost. Recently, I visited Teeesside and saw some of the fruits and results of the regeneration to which my hon. Friend referred.

As a Government, we can create the infrastructure and framework within which the economy can respond. It is because we have followed overall policies that are attractive to business, and which have, among other things, attracted more inward investment to this country than any other in western Europe, that we have been successful in tackling many of the problems that previous Governments found intractable.

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

Although such statements are always welcome to the areas concerned, does the Secretary of State have any early plans to treat other regions in a similar way. I refer to the north Yorkshire region and to its mining communities, which have been completely wiped out. My own area has lost 20,000 jobs since 1986 and has not received one penny of Government assistance.

Mr. Liffey

As my statement mentioned, the area in question is unique in two respects—its geographical isolation, and the fact that such a high proportion of its population is dependent on only two employers. For example, 45 per cent. of the population in Barrow are dependent on Vickers.

Mr. Michael Brown (Brigg and Cleethorpes)

; Does my right hon. Friend recall that 12 years ago, when I represented Scunthorpe, I was confronted by a situation very similar to that faced by my hon. Friend the Member for Barrow and Furness (Mr. Franks)—a single-industry town that was over-dependent on a particular industry? Does my right hon. Friend recall also that his predecessor took exactly the same decision that he has, particularly with regard to English Industrial Estates? My right hon. Friend is right to emphasise the representations made to him by my hon. Friend the Member for Barrow and Furness regarding English Industrial Estates because I predict that in 12 years' time, as a result of my right hon. Friend's statement, my hon. Friend's constituency will find that it has a massively diversified and successful industrial base. A close parallel can be drawn between the situation there and Scunthorpe.

Mr. Lilley

My hon. Friend makes a good point. Diversification is the key. The concentration exclusively on nuclear work followed nationalisation of the shipyard by the Labour Government. It is a problem that they created which we are having to solve.

Mr. David Clelland (Tyne Bridge)

Is the Secretary of State aware that many Opposition Members find it bizarre that the hon. Member for Barrow and Furness (Mr. Franks) can talk about good news when 11,000 people are to lose their jobs? Is he further aware that it is now some four months since I and two other officers of the northern group of Labour Members of Parliament met the Under-Secretary of State for Industry and Consumer Affairs, when we drew attention to the fact that the problem was arising and it was many months previous to that that the matter was drawn to his attention by the Northern Development Company? Will he confirm that, despite his announcement today, many thousands of people in the area will lose their jobs and may never work again because of the Government's neglect of the area during the past 12 years?

Mr. Lilley

That is rather a carping response to an effective and generous set of measures. The hon. Gentleman significantly does not mention the Opposition's policies on civil nuclear energy and what effect they would have in aggravating the problems in the areas which he affects to wish to help.

Mr. Richard Page (Hertfordshire, South-West)

My right hon. Friend will be aware that I have in the past had the privilege to represent a constituency in Cumbria and am therefore aware of the difficult industrial structures that pertain to the area. I therefore welcome the sensitive Government package to help deal with the problems, in particular the £15 million to be spent on industrial buildings through English Industrial Estates. However, when English Industrial Estates comes to construct those buildings, I hope that it provides a wide range of building sizes, particularly for small businesses and the smaller units, because in the past the mistake has been made of building far too large units and there has not been the start-up and growth of small businesses in the area available to fill them. That is a valuable point to take on board.

Mr. Lilley

My hon. Friend makes an important point. English Industrial Estates has learnt that there is often demand for small businesses and start-up units, and I hope that it will include them in the range of building programmes up there. I shall take that point up with it and confirm that that is the case.

Mr. Bob Cryer (Bradford, South)

But is not the Secretary of State's statement a complete admission of the failure of the Government's policy of relying on market forces without any intervention? Are not the Minister and his two right-wing cronies here today collaborating in a complete U-turn on Government policy? Is he really trying to tell the House that the only way that the Government can keep jobs is to spend massive sums of money on nuclear submarines for nuclear weapons? Does not he know that the Government are, by treaty obligation—the United Nations nuclear non-proliferation treaty—committed to reducing dependence on nuclear weapons? Why did not they look ahead and plan to secure some of the jobs? Lastly, did not the right hon. Gentleman hear the Secretary of State for Transport only last week talk about shifting goods from road to rail? What will he do about that? There is not even a mention of railways in his statement. It is a complete negation of everything that the Secretary of State for Transport said.

Mr. Lilley

If the hon. Gentleman really thinks that the application of these long-standing measures, in accord with our long-standing philosophy of tailoring, focusing and targeting our aims, represents a change, he is severely mistaken. If he thinks that it is a change to the Labour party's policies, he does not understand his own party's policies. It proposes all sorts of intervention measures which would waste a lot of money and which would not work and I am certainly not going down that route.

Mr. Churchill (Davyhulme)

I thank my right hon. Friend most warmly for his statement today. It will be very much welcomed in the north-west of England. Is he aware that the cause of the difficulty at the heart of the problem is the 40 per cent. cut in the United Kingdom submarine fleet, a situation which would be made infinitely worse if ever the Labour party were elected, given its commitment to scrap the fourth Trident submarine, its commitment to large-scale defence cuts and its commitment to destroy jobs in the civil nuclear industry on which the north-west of England is so enormously dependent?

Will my right hon. Friend make absolutely certain that he does everything in his power to ensure that the Labour party never has a chance of gaining control of the levers of power once again? Will he also have a word with my right hon. Friend the Secretary of State for Defence and point out to him that if the Ministry of Defence were to place an order for a new category of nuclear-powered hunter-killer submarine, for which there is a requirement, that would also be a great help to the people of Barrow?

Mr. Lilley

My hon. Friend is absolutely right in his analysis of the origins of the problem in Barrow and of the consequences that would flow from the cancellation of the fourth Trident submarine. Had the Leader of the Opposition had his way—still a member of the Campaign for Nuclear Disarmament and elected in 1983 on a programme to get rid of the whole of the Trident fleet—there would not be a single job in Barrow-in-Furness in the shipyards.

Mr. Dennis Skinner (Bolsover)

Is not the truth of the matter that, for the past 12 years, the Government have been ripping the guts out of manufacturing and industrial capacity throughout Britain, including Cumbria, and the Secretary for State in particular has been one of those little snobs who has believed that market forces and the philosophy of monetarism can solve everything? Now that the Government's policy is in ruins and the Minister has that pained look on his face as he tries to twist and turn and juggle a £1 million, not new money but of old money. Why does not he do something for the Sunderland shipyards, for every coalfield in Britain and for those areas where the textile and steel industries have been hammered by the Government? If he cannot do any of that, he should get out of the way and let someone else do the job.

Mr. Lilley

No, Mr. Speaker.

Mr. Alan Haselhurst (Saffron Walden)

As someone with long-time family connections with Cumbria, I give more than a grudging welcome to the concentration of measures that my right hon. Friend has announced today. I am sure that they will he welcomed in Cumbria and in west Cumbria in particular. Does my right hon. Friend agree that the retention and recruitment of able people to revive the economy of west Cumbria depends on communications? Will he not forget that the A66 could also do with some improvement if west Cumbria is to be connected to the east coast ports and the EC?

Mr. Lilley

I certainly agree with my hon. Friend's points. The consultants reports contains proposals for additional measures beyond those which I mentioned in my statement. We will be looking at them seriously in the light of the consultants' reports and possibly taking matters further in future.