HC Deb 20 November 1995 vol 267 cc434-42

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

10.3 pm

Mr. Gyles Brandreth (City of Chester)

I am grateful to have this important opportunity to raise an issue that is of fundamental concern to every one of my constituents, to their standard of living, to their quality of life, to the way that they live now and to the way that they and their children will live in the future—employment in the city of Chester.

Only a few days ago, at the very outset of the debate on the Queen's Speech, I was privileged to be given the significant opportunity of extolling the virtues of my unique constituency. I touched on its 2,000 years of history. In tonight's debate, I want to consider Chester as it is today, and perhaps as it may be in the future. I want to look at its achievements, consider its potential and face up to some of the very real challenges that confront us.

Essentially, ours is a success story. In recent years, unemployment in the city has been falling and inward investment rising. It is perhaps worth examining the level of inward investment and its quality to see the lessons that we can learn for future potential increases in employment in our area.

One notable example of inward investment, which included the personal involvement of my right hon. Friend the Prime Minister and the wholehearted commitment of the Government's inward investment team in the north-west, has been the arrival in Chester of the Maryland Bank of North America. It is instructive to consider why MBNA and others have chosen to come to Chester.

Executives of the Maryland international bank examined sites across Europe and throughout the United Kingdom and the British isles before deciding to build the new headquarters for its financial services and credit card operation at the Chester business park. The bank's move to the 150-acre landscaped park is one of the largest American investments in the United Kingdom for a number of years.

Why did it come to Chester? Tom McGinley, MBNA's chief executive, said: We chose Chester because of the readily available workforce; a young and enthusiastic group of people of exactly the type we like to bring on board. The quality of the work force, therefore, is one of the reasons that firms come to Chester.

The arrival of MBNA adds to quite a long list of companies based in our city. We also host the headquarters of Marks and Spencer Financial Services, Shell Chemicals (UK) and BICC Cables. Financial services are a particular strength. The NWS bank—North West Securities—has been in the city since the 1950s. Pearl Assurance is also based there.

Our success is not only in the sphere of financial services. We have also been successful in enticing manufacturing businesses to our part of the world. Cacao Barry (UK) Ltd., a member of the Barry Group, opened a new factory three years ago on the 84-acre Chester West industrial and commercial site, after looking at 16 different locations in the north of England, which is where most of its market lies for the bulk of its production of high-quality chocolate for use in biscuits, cakes and confectionery.

The company says that the Chester plant, which was built in the record time of only five months on eight acres and which now employs nearly 100 people, is the most technically advanced chocolate factory currently in production. Marc Donaldson, its commercial manager, says that Chester best fitted the company's location criteria, partly because the city is within 45 minutes of the international airport at Manchester. It is within easy reach of good communications. He also cited the culture and quality of life in our community.

Two more American firms worth mentioning have come to us recently. Original Bradford—soapmakers—and NEBS Business Stationery are also located on the Chester West site. More recently, a firm called Strix has settled in Chester. It is a remarkable company, which I mentioned last week. It has invested £10 million and created a large number of jobs—upwards of 100 to date. One item that it makes is switches for electric kettles—for 70 per cent. of all kettles in the world, in fact.

Ed Layne, the managing director of Original Bradford, said: We considered sites throughout Europe. Manchester airport was a very strong factor in our decision. In fact, it clinched the decision in favour of the North West.

Mr. Andrew Miller (Ellesmere Port and Neston)

The House will know that my constituency includes part of the city of Chester, as does the constituency of the right hon. Member for Eddisbury (Mr. Goodlad), the Government Chief Whip.

The hon. Member for City of Chester (Mr. Brandreth) has mentioned the importance of Manchester airport twice. Does he agree that, as mentioned in the previous debate, rail links to Manchester airport and improved links on the west coast main line are desperately needed as part of the transport infrastructure? Does he agree with companies such as Shell and Kemira, which are both based in part in the city of Chester, which say that they could greatly improve their businesses and the environment through greater access to the railways?

Mr. Brandreth

I entirely agree with the hon. Gentleman. There is no doubt at all that having a quality transport infrastructure is essential to the continuing success of our part of the world. Indeed, I shall refer that in a moment.

The traditional twin pillars of retailing and tourism in Chester have been boosted by the emergence of a much-needed third pillar—commerce. Of course, retail and tourism remain vital to us. In the city centre in recent years, significant retailing investment has been made by Marks and Spencer plc—with more to come, I am pleased to say, on its Foregate street premises—by Little woods, C. and A., BhS, Argos, Grosvenor Estate Holdings, Liberty Properties Ltd., Refuge Assurance plc, Scottish Widows, as well as new arrivals such as HMV and the Virgin megastore.

We have seen a growth in tourism. Six million people visit Chester. We have had many motorised visitors in the past few days because the Network Q Royal Automobile Club rally has been racing through Chester at a most bodacious speed.

How have we achieved our successes to date? Key elements are clearly the quality of the people, the place and the communications infrastructure, and the determination of the local community to see Chester thrive. The word "partnership" is used all too glibly by politicians these days, but in Chester we have a very real and active partnership. It has been developed over a number of years and is a partnership for the future founded on an understanding of Chester's special needs and a commitment to protect its interests while moving forward into the next century.

The partnership that has come together to work on the Chester action programme includes the chamber of trade, the chamber of commerce, the Chester, Ellesmere Port and Wirral training and enterprise council, the business club, the civic trust, the cathedral, housing associations, the economic development forum, the voluntary sector organisations, the environmental forum, the Chester hoteliers association, the Chester and Ellesmere Port enterprise agency, the Rural Development Commission, and, of course, the county council and the city council.

I underline the admiration that I and others have for all the people who are giving time and energy to that work— notably, from the city council, the chief executive Paul Durham and the head of economic development unit Barbara Mothershaw.

As well as the people I have mentioned, those involved with the partnership include a wide range of people involved in businesses of all kinds large and small. Under my chairmanship, we have been getting together at a series of meetings that we have called the Chester jobs summit. At those meetings, we have been looking at ways in which we can make our city even more successful and ensure more and better employment—sustained and real—for those in our community.

As a result of the Chester jobs summits, we have had a series of meetings with Ministers to tackle specific issues, ranging from the future of the Army pay and personnel centre at Queen's Park to the vital need to make rapid progress on improving the essential rail links between Crewe and Chester and beyond. I am glad that the hon. Member for Ellesmere Port and Neston (Mr. Miller) raised that issue, and especially glad that my right hon. Friend the Secretary of State for Transport addressed it head on in the previous debate on the Queen's Speech.

Earlier this year, as a result of the jobs summit initiative, we met the Minister of State, Department of Employment, as she then was—my hon. Friend the Member for Maidstone (Miss Widdecombe)—and my hon. Friend the Minister for Small Business, Industry and Energy, as he still is. The firms remain small, but his stature grows as the weeks go by. He subsequently visited our business link in Chester.

The issues we raised concerned employment opportunities in Chester in general, and employment training in particular. We want an extension in the training available for adults returning to work. We want an increase in employment training for disabled people, and we want more concerted action to deal with the particular problems of those who have been unemployed for a long time.

The Chester action partnership wants to establish an enterprise fund to help new and small businesses to develop, and to retain vital technological skills in our area.

I am delighted to say that, as a result of the meetings I have mentioned, a two-person team has been seconded to us by the Government office for the north-west.

Mr. Miller

The importance of technology in the area cannot be understated, and I hope that the Minister will respond on that point. Last week, I had the privilege of chairing a conference organised by CEWTEC, the local training agency which was referred to by the hon. Member for City of Chester (Mr. Brandreth). It encompasses companies from the Wirral and Chester which specialise in the development of information technology in their industry. Does the hon. Gentleman agree that we need greater emphasis on this part of Chester's potential from all players in the community, and, indeed, from the Government?

Mr. Brandreth

Yes, I agree with the hon. Gentleman. One of the developments I look to see is greater diversity in the economic life of the community. In that regard, I salute British Nuclear Fuels plc, which is looking at ways in which to produce the seedbed for allied small businesses. It is looking at different ways in which to extend its product development centre, IES, and other projects. I endorse what the hon. Gentleman says.

Another achievement of the Chester action programme and the jobs summit initiative is that we played a part in securing the single regeneration budget challenge fund for regeneration in west Chester. Already it has been a real success. There have been 14 new business starts, the creation of a community business and the creation of 10 jobs. Assistance has been given to 19 voluntary organisations and 300 or more students, and young people are benefiting from projects to enhance personal development.

At the most recent meeting of the jobs summit, the chief executive of the Chester, Ellesmere Port and Wirral training and enterprise council, Alan Moody, brought us his report on the economic prospects, as he saw them, for Chester and as a survey had revealed them to be. In general, the Chester area economy is the most vibrant of the three in the CEWTEC area. That reflects the concentration within it of the rapidly expanding financial services sector to which I referred and of tourism, which is benefiting from a growing trend towards short-break holidays and from the essential quality of a visit to Chester.

The manufacturing base in Chester has suffered, despite the high-tech focus. That reflects the dependence on the aerospace industry, which has suffered from the ending of the cold war and from the intense competition for civil aircraft orders.

Business confidence is generally high in Chester. Some 63 per cent. of the firms surveyed by CEWTEC expected turnover to be higher next year than this, against 7 per cent. who expected it to be lower. Some 48 per cent. of the businesses surveyed expected to increase investment next year, which is good news, whereas only 5 per cent. thought that they would reduce their investment levels.

The major single constraint on the development of businesses in Chester is the shortage of suitable finance. Interestingly, that was cited by 32 per cent. of the 202 businesses surveyed, and we must address that issue.

Many firms in the survey with financial constraints appeared not to have business plans. Such plans must be seen as an obvious prerequisite, not only to identifying the amount of finance required but to raising that finance. This could well be an area in which business link and CEWTEC can play a role, and I know that they want to see that possibility developed further.

There is no doubt that, in common with many cities— but perhaps contrary to the popular image of the city— Chester has pockets of high long-term unemployment, particularly male unemployment. This is a matter of concern to CEWTEC, the Minister and me. There is no doubt that we need to attract more development and create jobs for men in particular, as well as for managers and mature professionals. We need to encourage young men to come on to the job market with greater skills.

It is worth pointing out that CEWTEC told me that, in terms of foundation skills, the achievement of young people in Chester is better than the national average. CEWTEC deserves to be saluted for what it has achieved in recent years. From being one of the lowest-performing areas in 1990, our area has grown into one of the most successful, with end-of-year results showing significant increases in skill levels achieved through training. A total of 1,352 young people, an 8 per cent. increase, and 1,770 adults, an increase of one third, achieved NVQs, so I hope that we are moving in the right direction.

Comparative performance figures issued recently for the 81 TECs across the country showed substantial improvements, particularly in achieving value for money. The figures showed that CEWTEC is among the best. There has been a 36 per cent. improvement in the number of school leavers obtaining NVQs through local training schemes, and CEWTEC helped 28 per cent. more adults to learn new skills and earn qualifications through its training for work programme.

CEWTEC is working with a wide range of people. To cite one would be invidious, but I do so nonetheless. One company in the area—Barratts of Chester—has recruited five trainees after being unable to take any in the previous two years. Those trainees are being provided with work through the Construction Industry Training Board, which is helping Chester construction companies to ensure that there is an adequate supply of properly trained people. There are currently 14 Chester trainees on their first-year programmes at the Mowlem training centre in Birkenhead and the West Cheshire college. Last year, there were only two trainees, so we are moving in the right direction.

We face challenges, and we have exciting opportunities. But Chester does not operate in isolation, and our achievements must be in the context of the national economy. There is no doubt that part of our achievement is in the context of our being in a world of sustained growth with low inflation. That is a real achievement, and allows businesses to plan to expand. One of the reasons for short-term attitudes to financing is uncertainty about the future.

If one lives in a world of high inflation and fluctuating interest rates, how can one plan for the future? One of the greatest achievements of the Government under this Prime Minister and this Chancellor has been to transform the situation, and that is one reason why I have such hope for the future.

I do my very best to avoid party politics at the jobs summit, but I am not so constrained here. One of the concerns put to me by people in my community— particularly those in the retail and tourism industries—is the threat that they foresee from the social chapter and the minimum wage. They see those measures as a threat because they have not been given any hard and detailed information from Opposition politicians about what they might involve, so all they can see is the worst of them.

Sir Rocco Forte understands the hotel industry, and he has excellent hotels serving my part of the world. He points out: The essence of a healthy tourism industry is flexibility in the use of its labour force so that it can serve the customer effectively and charge prices which are competitive in the international market. In this respect the UK has great advantages over its Continental neighbours. Social security costs make labour 50 per cent. more expensive in France and Germany and 100 per cent. more expensive in Italy. The introduction of the Social Chapter and the imposition of a national minimum wage would have a devastating effect on the flexibility and competitiveness of this industry, which is one of the largest providers of employment in the UK. I am seriously alarmed at the prospect of something that would have, in the words of someone who knows and has been brought up in the hotel industry, "a devastating effect" on employment in my community. That is the prospect of the down side.

The up side is simply that Chester is a unique asset to the north-west and the United Kingdom. We have a proud record in inward investment. We have the best people in the country in the best city in the country. Our prospects for the future are exciting indeed.

10.25 pm
The Parliamentary Under-Secretary of State for Education and Employment (Mr. James Paice)

It is a rare treat for the House to be reminded twice in one week of all the great features that Chester has to offer. I congratulate my hon. Friend the Member for City of Chester (Mr. Brandreth) on the juxtaposition of the two speeches, but also the way in which, in the first speech that we all enjoyed last week, he looked back at the great history of Chester.

I must admit that I was slightly relieved that he did not embark on that again tonight, not least because I might have been forced to wax lyrical about the city of Ely in my constituency, which has a history just as illustrious. I also congratulate him on the way in which he has seriously dealt with the many issues tonight. I am sorry that, on last week's occasion, the House was packed because it was the Queen's Speech, but tonight it is less full because of the Princess's speech.

The starting point for Government policy, and the point to which my hon. Friend referred, is the Government's belief that jobs are created only by profitable businesses which produce goods, products or services at a price and quality that a consumer wants. The Government's role is to regulate at the minimum level necessary commensurate with reasonable business and employment standards.

It is for that reason that unemployment in Britain is now less than in Germany, France, Spain or many other countries in the European Community. It is why, as my hon. Friend rightly reminded us, the Government have stood resolutely against the social chapter.

It is important to remind the House, my hon. Friend and his constituents of the absurdity of the notion asserted by the Leader of the Opposition last week, that he would sign up to the social chapter but would not necessarily go along with everything that was within it. The simple fact is that the social chapter involves majority voting. Once Britain signed up to it, we could be outvoted and forced to go along with burdens and regulations on employers. The Government's role is to create the right environment and framework for businesses to prosper. My hon. Friend has reminded us of the excellent state of the economy. I will not go through that again.

One matter to which my hon. Friend did not refer is our industrial relations record. It has been transformed. I am sure that we all forget, until we sit down and spend a little time reminiscing, how seriously bad it was in the late 1970s. Since then, Britain has been transformed into a paragon of industrial relations for the rest of the world. On top of that, we have slashed red tape and placed great emphasis on the growth of small businesses. We have developed a network of support organisations, to which I shall refer.

My hon. Friend referred to INWARD. I am grateful to him for acknowledging that INWARD, together with strong support from the local agencies was instrumental in persuading MBNA, the financial services company to which he referred, to locate in Chester. That is a tremendous success for Chester. It is the company's first operation outside the United States of America. It is a massive investment, with a substantial number of jobs. Most importantly perhaps, it is a tremendous success because the investment was won against strong international competition. It was helped, but not conclusively, by a Government offer of £7 million of regional selective assistance. Perhaps most importantly, in the words of the company, it selected Chester for the right people and education infrastructure, high quality business environment, and first class transport and communication links. My hon. Friend referred to the unemployment situation. Sadly, it is higher than the national average, but it is changing fast. Indeed, since the peak in December 1992, unemployment in the United Kingdom has fallen by nearly 17 per cent., but Chester can beat that. Over the same period, unemployment there has fallen by more than 23 per cent., and it fell substantially again last week. The jobs summit that my hon. Friend convened—I salute him for his initiative in doing so—is going a long way towards tackling the needs of businesses and how to create those new jobs in the Chester area.

The single regeneration budget, to which he also referred, is playing a central part. A bid of more than £2 million for the Chester action programme will be used to create new jobs, more qualifications, new businesses, to enhance the achievement of more than 5,600 pupils and to build 100 new dwellings. It is an excellent example of the public, private and voluntary sectors working together.

My hon. Friend and the hon. Member for Ellesmere Port and Neston (Mr. Miller) referred to the Chester, Ellesmere Port and Wirral training and enterprise council—CEWTEC. My hon. Friend will know that, as Minister responsible for training and enterprise councils, I take a great pride in their achievements and in the way in which they have all improved their performance. I recognise and pay tribute to the improvements that CEWTEC has made, of which my hon. Friend reminded the House. This year, in the Chester area CEWTEC is providing 50 business start-up places, 1,400 adult training places, and 75 modern apprenticeships.

The survey to which my hon. Friend referred showed that 50 per cent. of companies in the Chester area had no training plan for their work force, and only 40 per cent. had provided any training in the past 12 months. That is why the Investors in People standard is the most important of all the initiatives and programmes run by CEWTEC.

Mr. Miller

Will the Minister give way?

Mr. Paice

No, I am afraid that I have not got time. I would happily do so otherwise.

The fact is that six businesses in the area are recognised as investors in people, and another 30 are committed to achieving the standard. As my hon. Friend said, the business link organisation is also helping to develop new businesses and jobs.

My hon. Friend referred to the threat of the national minimum wage. The one question that its advocates have never answered is on differentials. If we upgrade the skills of the work force of Chester and everywhere else in this country, those skills must be recognised by adequate differentials in their pay. If one raises the lowest pay, one has to raise differentials. The inflationary consequences are staggering, and the Opposition have not dealt with that problem in their advocacy of the minimum wage.

My hon. Friend was entirely right to draw the attention of the House to the threat that the social chapter poses to jobs in Chester and the United Kingdom. He has done a great service to his constituents by bringing to the House full recognition of what has been achieved and of the great success in developing the economy of Chester and the surrounding area. I congratulate him on the way in which he did so, and on the way in which he represented his constituents here—

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

Adjourned accordingly at twenty-seven minutes to Eleven o'clock.