Rotherham and Mexborough

HC Deb 24 June 1998 vol 314 cc1007-12 12.30 pm

Mr. John Healey (Wentworth)

I am glad to have the chance to debate a decision by the Office for National Statistics to abolish the Rotherham and Mexborough travel-to-work area, a decision confirmed last month. I hope to raise concerns about the statistical reliability of that decision, and to highlight its potential economic consequences. I hope to persuade my hon. Friend the Economic Secretary to the Treasury that the ONS needs to do further work to overcome deficiencies in the data on which its decision was based so that a reliable review can be conducted later this year.

If the loss of our TTWA is confirmed, the area with the highest jobless rate in Yorkshire and Humberside, and with one of the highest rates in the United Kingdom, will be abolished at a statistical stroke. Unemployment stands at 10.2 per cent. in the Rotherham and Mexborough TTWA, and that will be hidden in the new Sheffield and Rotherham area, where the jobless rate is 7.5 per cent. Most seriously, the capacity for Rotherham and the Dearne to win badly needed UK and European funds for economic regeneration will be put in jeopardy.

The move is opposed by Rotherham council, by Rotherham chamber of commerce training and enterprise council, by Rotherham business link and by labour market analysts at Sheffield Hallam university and the university of Sheffield. In short, it is opposed by anyone who knows anything about historical and current labour market patterns in South Yorkshire. The move has no support from neighbouring local authorities, TECs or other agencies.

The ONS report on new TTWAs explains that the areas are important because they link workplace with residence", and they enable users to gain a better understanding of how their area operates as a labour market". They are also often used to monitor labour market programmes from both a national and local perspective". In other words, TTWAs are the principal unit for monitoring labour markets, and the most authoritative unit for measuring unemployment.

Regional selective assistance, the key Government fund for inward investment and local business growth, is based on TTWA jobless figures. Single regeneration budget 1, 2 and 3, rural development area status, rural challenge funds, city challenge funds and enterprise zone status are all UK regeneration programmes for which eligibility is heavily dependent on unemployment. Funds have been won from each of them in the Rotherham area over the past five years. European funding gives similar priorities to areas with jobless problems. Over the past 10 years, objective 2 funding, RECHAR and RESIDER have all provided funds for Rotherham that might not have been won without an accurate local unemployment measure.

I calculate that we have had around £100 million for regeneration from UK and EU grant programmes in recent years. We might not have won that money without our TTWA. I understand and accept that there must be statistical criteria to define travel-to-work areas. I understand and accept the two "self-containment" criteria used to define them. However, I should remind the Minister and the officials of the ONS that a travel-to-work area is a means, not an end. The huge new Sheffield TTWA covers more than 750,000 people, four local authorities, two standard Government regions and a range of diverse communities. As such, it will be of limited use for policy analysis or formulation, and it will mask substantial variations in unemployment.

For those reasons, the new TTWA received strong criticism during the review of the TTWAs. The review was based on the 1991 census, as updated by annual census of employment figures. Rotherham and Mexborough TTWA comfortably met the demand side containment criteria of having 70 per cent. of jobs in the area filled by residents of the area. However, the ONS calculated that our supply side containment—the percentage of all employed residents of the TTWA who work in the TTWA—fell below the 70 per cent. threshold, at 66.4 per cent.

My hon. Friend the Economic Secretary kindly agreed to meet me in March to discuss my concerns. I was grateful for the opportunity to put to her two separate arguments. The first was technical: the figures on which the decision was based were outdated, incomplete and distorted by heavy job losses in coal mining and steel immediately after the 1991 census was completed. The second was economic: the decision will put at risk efforts to regenerate our area after the heavy loss of coal and steel jobs. My hon. Friend stressed her own and the Government's determination to make the ONS more independent of the political process, with the aim of restoring the credibility of Government statistics after years of their being devalued by misuse by the Conservative party. She invited me to deal directly with the ONS, and to develop a statistical and technical case.

I accepted that challenge, with the help of Chris Mallender, the assistant chief executive of Rotherham council, and Glyn Jones, director of Sheffield Hallam business school. I believe that that challenge was met. We had a series of detailed discussions with Steve Hickman, the senior ONS officer in charge of TTWA review, and we reached agreement on several significant adjustments to key data sets, and to the self-containment calculations.

We agreed that the census of employment figures was incorrect for five of the six major industrial sectors; employment in our TTWA had not reduced in the years following the 1991 census; and the closure of 10 local pits since 1991, and large job losses in the steel industry, significantly reduced out-commuting levels, thereby increasing our supply side containment ratio. More recent figures for business start-ups, job creation and inward investment show strong growth in the Rotherham and Dearne economy, which reinforces the trends that began to be established soon after the 1991 census.

Throughout our dealings with the ONS, and in the supplementary data that I have prepared, I have been very conscious of the ONS's concern that any case for the retention of our travel-to-work area will be closely and publicly scrutinised by others. At no stage, therefore, have we exaggerated our case or inflated any of the statistics. Based on that agreement, Mr. Hickman, in a fax dated 5 May, stated: From these calculations, taking best estimates, the self-containment of the 1994 Rotherham and Mexborough area reaches 69.2 per cent. That is less than 1 per cent. variation from the threshold and a level at which the discretion that Mr. Hickman had already made it clear the ONS could use should properly have been exercised. However, he continued: This should ideally be 70 per cent. and I do not propose that the former Rotherham TTWA is reinstated.

Mr. Denis MacShane (Rotherham)

I took this matter up under the previous Government. My hon. Friend has put forward much more convincing arguments in a statistical demolition of the Whitehall position, but it appears that no amount of facts will allow Whitehall to change its mind. As the Member for central Rotherham, I know that the borough of Rotherham, with its 250,000 people, is quite different economically and culturally from Sheffield. No other unit of 250,000 people in Europe would be merged with a wholly different giant city conurbation. I know that it is difficult for the Minister when she has to present her Department's line, but I ask her to reconsider and send some of the statisticians up to Rotherham to see for themselves. One good visit in situ is worth a thousand econometric and statistical analyses. This unacceptable decision will outrage everyone in the borough of Rotherham.

Mr. Healey

My hon. Friend makes important points about the local identity of Rotherham and resistance to its being subsumed within a Greater Sheffield TTWA.

I was disappointed, dismayed and puzzled by the conclusions that the ONS drew, and by the decision to press ahead with the abolition of our TTWA, especially as there remain a number of unresolved data questions. First, there is the level of self-employment growth and the fact that no adjustment for commuting into the TTWA has been made. Secondly, there is the degree of growth in local jobs; further corrections of the census of employment data are required. Thirdly, new jobs created in our area have mainly gone to part-time women workers. The ONS confirms that such workers tend to have shorter commuter distances".

Fourthly, there is the negligible impact of developments in the lower Don valley, particularly Meadowhall, which opened in September 1990 with a full complement of stores before the 1991 census was conducted. Fifthly, increasing local jobs growth and decreasing out-commuting are trends that have strengthened since the mid-1990s snapshot which we developed jointly with the ONS.

I have two fears if the abolition of our TTWA is confirmed. Technically, I fear that the ONS is committing itself to boundaries that relate to an historic labour market that was radically changed after the 1991 census by a profound one-off collapse of mining and steel. Economically, my fear is more serious. Rotherham's recent success in winning the lion's share of regional selective assistance, attracting large inward investors such as Ventura, with 1,750 new jobs promised for the Dearne, and in generating a rate of VAT registrations and business start-ups well above the national average, could be choked off. The technical exercise of redrawing travel-to-work area boundaries could have profound economic consequences for Rotherham and the Dearne.

Mr. Kevin Barron (Rother Valley)

I represent a seat wholly inside the borough of Rotherham. My hon. Friend knows that much of my area is not covered by the Rotherham TTWA, while some parts are covered by the current Sheffield TTWA. I have evidence over many years of the disadvantage that I have had. The idea that the closed coal mining communities that I represent in the southern part of my constituency have anything to do with the economics of Sheffield city centre is farcical. It seems that the north of my constituency is to be as disadvantaged as the south has been for many years.

Mr. Healey

As ever, my hon. Friend makes a powerful point.

Will the Minister confirm what her senior official, Mr. Steve Hickman, at the ONS promised my colleague Chris Mallender: that the ONS will keep our TTWA under review for the next six months and will discuss with us further the deficiencies in the data? That is a constructive way forward and a proper approach if we are concerned both with the statistical integrity of our travel-to-work areas and with the economic purposes to which they are put. I hope that she will endorse that in her response.

12.45 pm

The Economic Secretary to the Treasury (Mrs. Helen Liddell)

I congratulate my hon. Friend the Member for Wentworth (Mr. Healey) on securing this debate on an issue that he has pursued with great vigour, and on his generosity in allowing the involvement of fellow local Members.

My hon. Friend made the case for reinstating the Rotherham travel-to-work area clearly. I am happy to agree with his final point that there should be further contact between the Office for National Statistics and him in further evaluation of the statistics. I shall deal with that in more detail later.

As the Minister responsible for the Office for National Statistics, I am glad to have an opportunity to explain the new travel-to-work area map and why it does not contain a separate Rotherham TTWA. I will also explain how the ONS intends to consult users about future statistical needs, and what statistics will be available for the Rotherham and Mexborough area.

I recognise that the closure of the coal mines and steelworks in the early 1990s in the Rotherham area will have affected commuting patterns and, potentially, the shape of the TTWA map. I say that with feeling, because my constituency is similar in its history of iron, steel and coal mining.

As my hon. Friend knows, TTWAs are designed to approximate to self-contained labour markets —areas where people not only live but work. As he said, the previous TTWA map was based on commuting patterns that were measured by the 1981 census of population. In 1981, Rotherham was sufficiently self-contained to be a TTWA in its own right. However, when commuting flows from the 1991 census were analysed, Rotherham was no longer sufficiently self-contained to meet the TTWA criteria, and formed a much larger TTWA with Sheffield.

That was true not only for Rotherham and Mexborough but for several 1981 travel-to-work areas. That reflected a general trend towards increased commuting and fewer TTWAs. To put the problem into context, TTWAs used to be the smallest areas for which the ONS published unemployment rates. That was because TTWAs were sufficiently self-contained to be regarded as local labour markets. However, the ONS now publishes unemployment rates for areas that are much smaller than TTWAs, such as districts. That is in line with the new ONS approach to local labour market statistics, which consists of publishing information down to the lowest reliable level. The ONS is also investigating the feasibility of producing unemployment statistics that go right down to ward level, which will enable users to identify areas of high unemployment far more clearly.

That answers the point made by my hon. Friend the Member for Wentworth about the unemployment in his area being subsumed in a more positive figure for the new overall TTWA. It is important to have accurate statistics at local level, which will enable my hon. Friend and the colleagues with whom he has worked so hard on this issue to make the case for economic development in the area. It might help to reassure my hon. Friend if I make it clear that labour market statistics for the 1981 TTWAs will continue to be made available for at least the next two years.

As my hon. Friend knows, when we jointly met the TTWA review leader from the ONS, we had a full and detailed discussion—indeed, my hon. Friend earned great respect for the reasoned way in which he argued his case. He argued that Rotherham was borderline, because the closure since the census of the steelworks and the coal mines outside the Rotherham boundary had affected commuting flows, and the self-containment criteria could now be met. We agreed that the case required further examination and that the ONS would work with Rotherham metropolitan borough council to evaluate whether the Rotherham and Mexborough area was now sufficiently self-contained to meet the TTWA criteria.

I understand that my hon. Friend and the assistant chief executive of the borough council subsequently met ONS officials and supplied further information, and I am informed that the ONS examined it in some detail. However, the ONS had to conclude that there was still insufficient evidence to demonstrate that commuting flows had changed significantly enough for Rotherham to meet the self-containment criteria. That is why Rotherham and Mexborough could not feature as a separate TTWA on the recently published map.

I know that my hon. Friend is concerned about his area. Every Member of Parliament has a particular responsibility to his or her constituency, but I am sure that he will recognise the importance of the ONS maintaining a consistent approach and treating all users equally. For that reason, any change to the draft boundaries that did not comply with the ONS decision criteria—however marginal the deviation might be—would need to be supported by clear and incontrovertible statistical evidence to maintain the integrity of the map. In the case of Rotherham and Mexborough, the ONS had to conclude that the statistical evidence did not meet the criteria to which it works.

That is not the end of the process. I assure my hon. Friend and the House that the ONS is continuing to listen to the views of users on the new TTWAs and the need for local area statistics. I know that the ONS and Rotherham metropolitan borough council are continuing to investigate data on current commuting flows. The ONS is also working on providing a wider range of data, including unemployment rates, for local authorities and for even smaller areas, possibly even wards. It is intended that, over the next few months, the ONS will listen to user reaction to the new map and work with users to address their statistical needs. Any proposal for changes to the map has to be considered in the context of what positive and negative feedback on the boundaries is received, what other statistical information becomes available and how users' needs develop.

I am happy to give my hon. Friend an undertaking that the ONS will again meet my hon. Friend, once a further six months of statistics have been collected, to allow further evaluation. I hope that that answers his point about outdated statistics. I can tell my hon. Friend the Member for Rotherham (Mr. MacShane) that there is at least one meeting in the diary for next week to allow my hon. Friend the Member for Wentworth to meet officials of the ONS. I am sure that the ONS would be happy to arrange as many meetings as necessary. The geographical location of those meetings is up to the officials and to the hon. Members involved.

I hope that my hon. Friend will accept that offer. I commend him for his diligence and expertise in respect of this matter and congratulate him again on securing the debate. The diligence with which he, his local authority and Sheffield university have pursued the case, and the rigour with which they have argued it, do great credit to all of them. I hope that my colleagues in the ONS will be able to meet them and allay their fears.