Industry and Employment (Dunstable) (Hansard, 27 July 2000)

§ Sir David Madel (South-West Bedfordshire)

It is three years since I had an Adjournment debate on the position of industry in Dunstable. That was in May 1997 and, while I did not expect immediate action in the first month of a new Labour Government, I hoped to put Dunstable's industrial problems at the top of Minister's in-trays and I think that I achieved that.

Three years on, however, industry and employment in Dunstable are again sliding backwards. By that I mean that there have been job losses and no improvement in the infrastructure, which harms local industry in Dunstable and the next-door town of Houghton Regis. Last year, the TRW steering group left the area, with almost 300 jobs losses. Of immediate concern to Dunstable and the surrounding area was an announcement on 4 July by Automotive Sealings Systems, BTR. In a press statement the company announced the closure of its Dunstable factory with the loss of up to 400 jobs. BTR manufactures rubber seals for car doors and windows for all the major European car manufacturers. The press statement went on to say that the company plans to set up a smaller plant in the Dunstable area which will employ up to 130 people. That was a bad blow for the town. The company followed it up with a request to me for three forms of action—three areas of financial assistance that would help. The first was relocation assistance in establishing a new greenfield site. The second was training grants in connection with the multi-skilling programme for the work force who are going to transfer to the new site. The third was local employment assistance for those people seeking alternative jobs as a consequence of the reduction in employee numbers—alas, 400 jobs are going.

Other auto-component manufacturers in the town are not finding it at all easy. One cause is the high value of the pound. One month ago in June, Mr. Richard Marton, the chief executive of Britax pic, made the most ominous comment on the sale of his company's automotive components business. On 26 June, he said: It's a very unpleasant industry. It's a beastly environment with some very unreasonable demands and pressures being put upon all the people that operate in it. Decoded, one could say that that means that there is strong global competition and car manufacturers are putting heavy pressure on components manufacturers to keep prices as low as they can.

The good news in the past 24 hours was the announcement of the new assisted area map, and I am grateful to the Minister for Trade, who is to answer the debate, and to his civil servants for keeping me informed as to local developments. The Minister says in his letter to me of 27 July: You will have been pleased— I am very pleased— with the confirmation yesterday that the European Commission accepted our proposals and for the first time these wards— 1385 three wards in Dunstable-Houghton Regis, Houghton South, Northfields and Icknield— qualify for Tier 2 funding. The company— BTR— may be eligible for grant-aid under the Regional Selective Assistance scheme subject to it satisfying that the intended investment meets the same criteria and European Union sectoral restrictions do not apply. That is good news, but when the company made its press announcement on 4 July it said: The company expects the factory in London Road, Dunstable to close by March 2001. The 42,000 sq metre site is likely to be re-developed. The site is not in any of those three wards; it is in the Priory ward. I do not know where the company will move. If it goes into one of the three wards that now have assisted area status, it will get help.

Also, I draw to the Minister's attention the fact that we want the London road site to be redeveloped, but for industry. I do not want another derelict site in Dunstable. I want someone to go to the London road site and provide jobs. If such a company needs help to restructure and alter the site, I hope that there will be a way of finding that help. BTR has said that it will have a new site locally, with 130 jobs. That is fine, but finding a new employer for the other site is equally important.

In our area, we are not merely sitting back and wondering what on earth to do after these employment difficulties. As I understand it, the East of England development agency is involved in an infrastructure benchmarking study—a fair bit of jargon, but I hope that it means that the development agency will help us in the Dunstable area to re-use a number of brownfield sites for industry.

If our assisted area status is to be of lasting benefit to south Bedfordshire, we must use this opportunity to make those sites suitable for 21st century usage. That means high-tech companies. However, as the study notes, infrastructure funding must also be provided. We need help from the EEDA on that problem.

Furthermore, we are considering a scheme described as an Oxford-Cambridge technology arc. That too is jargon; it means a proposal to build on the international reputation of Oxford and Cambridge universities to create an English silicon valley. It offers a possible way to spread the pressures and benefits of the Cambridge phenomenon sub-regionally to areas such as Bedfordshire, Luton and, of course, Dunstable-Houghton Regis by the provision of suitable infrastructure links.

The proposal is fine, but the EEDA has not yet agreed to part-fund the study. I hope that it will do so, because I think that our area can become a silicon valley between Oxford and Cambridge. When the Minister replies, will he say whether he can give the EEDA a shove forward?

I want to go into a little more detail on the infrastructure. There is a disused railway line between Dunstable and Luton. Detailed proposals for its conversion into a busway are on their way to the Government; work will be completed and submitted within the next few months. Do the Government think that it would better for us to restore the rail link between those two industrial towns? In Dunstable, there is strong opinion in favour of reopening the disused line. In one parish poll, 80 per cent, of people said yes. There will 1386 be another poll in the autumn. It would be helpful if the Government could give us their opinion during the next few weeks. In which direction—railway or busway—do they guide us?

A much bigger infrastructure problem for industry and individuals is the complete lack of progress on Dunstable's bypass and the effect that it has on industry. I have studied the glossy publication issued by the Deputy Prime Minister last week. I searched it until I was dizzy for a mention of Dunstable's bypass, but there is none, so I asked the right hon. Gentleman a question. He replied that a five-year plan will be announced after full representations have been taken by December. Those plans— that is, local transport plans— will make recommendations for bypasses and roads and I shall consider them. The crucial words in the reply are: Of course bypasses can play a part on some strategic routes in both rural and urban areas and I shall take representations from the strategic regional review bodies and the development agencies. All that will enable us to identify those roads over the next six months.—[Official Report, 20 July 2000; Vol. 354, c. 560.] Is there a chink of light there? Is it possible that, by December, the Government will nerve themselves to say that we can go ahead with a public inquiry into the Dunstable bypass-not least for industrial reasons? I cannot hold my breath until December, Mr. Deputy Speaker, or I shall pass away; a by-election in my constituency would not be welcome. However, I very much hope that, by December, the Government will agree to a public inquiry in Dunstable and that a bypass will be constructed.

I shall not seek re-election to Parliament at the next general election. After 30 of the happiest and most challenging years of my life, it is time for a new person to represent my constituency. It has been the greatest privilege for me to have served my constituents for those 30 years. While this Parliament continues, however, I am drawing up a list of leaving presents; not for myself—because I do not want to wreck my parliamentary career by having a row with the sleaze buster, or the Parliamentary Commissioner for Standards—but for my constituents. Here is one which I hope the Government will consider, and which I think will help us in our difficulties.

I refer to the final report by the Rover taskforce, which the Minister now has. The taskforce identified five areas in which action was needed to help industry in the Birmingham area: modernisation of the automotive base, diversification of the regional economy, regeneration and creation of new opportunities, support for the work force and support for families and communities. All of those apply to Dunstable and Houghton Regis. That is almost tailor made for our area in view of the industrial setbacks that we have had. There would need to be some modification. Those are five excellent aims that are just as relevant for us.

What I hope the Government can do—they will get my full support if they can—is to take Dunstable and Houghton Regis and the industrial area next door forward on the basis of those recommendations. We need to diversify our local economy. We need regeneration and creation of new opportunities. My goodness, we need support for the work force in view of what has happened 1387 in the last few years and support for families and communities, who are used in Dunstable and Houghton Regis to working for a thriving industrial base.

Therefore, I am reaching out to the Government and the Minister this evening, as this Session almost comes to an end, to ask him for help, because if the Government will give such help they will get a superb response from people in Dunstable and Houghton Regis, who want to rebuild their industry and economy and who want to go on doing what they have done for years—making a substantial contribution to the economy and well-being of this country.

§ The Minister for Trade (Mr. Richard Caborn)

I begin by congratulating the hon. Member for South-West Bedfordshire (Sir D. Madel). I did not know that he would be retiring at the next general election, but I can say—I believe, for many people in the House—that he is a man of great integrity, and a person who has fought very hard for his constituency and his constituents from the Back Benches. He will be sorely missed.

In his usual style, the hon. Gentleman has put his case extremely forcefully on behalf of his constituents, and one agrees with him that any loss of jobs is a difficulty for those people who lose them, and who, obviously, have the Government's sympathy. However, against the background of an ever-changing world, we must now consider how we can manage the change that is inevitable in an ever faster-moving world and in the continued development of the global economy.

say from the start that the Government are very supportive of manufacturing industry and, specifically, the automobile industry. In the automobile industry, especially around the Dunstable area, there are probably some of the best technicians, the best mechanics and the best designers. I believe that eight of the top 10 formula one teams are working in the United Kingdom—many around the area that the hon. Gentleman represents.

I agree with the hon. Gentleman that, in the wider context of manufacturing, it is important to put the automobile industry at the heart of our economy—the real wealth creation. To that end, since May 1997 we have been bringing forward a raft of initiatives to ensure that our manufacturing base not only continues but gets into the real value added and makes real use of the intellectual property that is in many of our academic institutions, in science parks and research centres.

I shall lay out a few of those initiatives for the hon. Gentleman. We have cut corporation tax to the lowest level ever. We have introduced a new 10 per cent, starting rate for small companies from April 2000, and that has benefited 270,000 companies. The temporary 40 per cent, first-year capital allowances for small and medium enterprises was welcomed; we have now made that permanent. We have introduced 100 per cent, first-year capital allowances for small businesses investing in information communications technologies.

We have introduced a research and development tax credit from April 2000 to boost the level of R and D undertaken by small firms. As the hon. Gentleman said, it is important that we encourage our small and medium companies to get involved in more R and D.

1388 We have revisited the whole of the skills base of the nation and, after wide consultation, we have introduced the Learning and Skills Council. I hope that it will work in conjunction with the university for industry, which is now being developed, and will reach out to many of the employees and companies to which the hon. Gentleman referred.

We have neglected in the past few years the need to sharpen up our ability to export. That is why we have created a new organisation called British Trade International, which is a marriage of the Department of Trade and Industry and the Foreign and Commonwealth Office. It is designed to give exporters the best possible service. It will make directly available to those who want to export the knowledge and information that the 200-odd embassies and high commissions around the world hold. We shall do that by electronic as well as other means. We have to be seen to be managing change, which is inevitable. We have to see how we can equip the people to whom the hon. Gentleman referred and many others with the necessary skills to go into high-tech industry.

I have looked at the statistics for the hon. Gentleman's constituency. While I accept that when individuals are declared redundant, they and their families suffer, since 1997 unemployment has been brought down by 30 per cent, in south-west Bedfordshire, which is a considerable achievement, as a result of the Government's policy not only to tackle the problems of unemployment, but to manage change further along the supply chain, where real value is added.

As the hon. Gentleman knows, we are also trying to adopt a more sensible approach to regional selective assistance. Within the stringent constraints set by the European Commission, we have tried to make sure that all the facilities available to assist industry are used to best effect. That is why the hon. Gentleman welcomes the fact that 90 per cent, of the population in his constituency is covered by the assisted areas map. I hope that he and his constituents will use that facility in the most effective way. It can be used to do exactly what the hon. Gentleman was asking for—to assist companies that want to bring new investment into the area. There is a facility there that can aid and abet that.

The hon. Gentleman referred to his regional development agency. He is a sensible Member, so I hope that he will tell some of his Front-Bench colleagues not to propose to scrap the agency in the event of their gaining power. That is a long way off, but to undermine the development agencies in the job that they are doing would not be good for the region or the problems of Dunstable. So we have developed the regions and business-led boards that can look strategically at some of the problems to which the hon. Gentleman has referred.

I suggest that some of the ideas for development in Dunstable and the surrounding area are brought before the development agency. I am sure that not just the financial facility of assisted area status, but the agency's wider powers will be utilised. Last week, the comprehensive spending review showed clearly that the Government have confidence in the regional development agencies both by the amount of money that we are dispensing to them to carry out social and economic regeneration in their area and by providing flexibility in budgets, which my right hon. Friend the Chancellor outlined and discussed with the RDAs last Friday when he met all the chairmen of 1389 the agencies. In the lifetime of the comprehensive spending review, the RDAs will have about £1.7 billion a year to dispense in a fairly flexible way.

The Small Business Service is now coming on stream along with the local learning and skills councils. The RDAs will be influencing them, so they are important bodies with which the hon. Gentleman ought to set up a dialogue to tackle the specific problems that he has raised this evening.

I am not able to answer in detail the hon. Gentleman's questions on transport links, but I assure him that I will convey his concerns to my right hon. Friend the Deputy Prime Minister. I can refer him to what my right hon. Friend said when he answered the hon. Gentleman's questions during the statement on the Government's plans for transport. Clearly, the answer offered a chink of light in terms of restoring railway links and taking a sensible approach to bypasses.

I assure the hon. Gentleman that, when my right hon. Friends the Deputy Prime Minister and the Chancellor of the Exchequer met the chairmen of the regional development agencies, the wider issue of the economic well-being of the region was discussed. My right hon. Friend the Deputy Prime Minister told the chairmen that he wanted them to become involved in the decisions that 1390 we shall take on transport and land use planning issues. Their advice will be factored into the decision-making process in the Department because my right hon. Friend recognises that it is extremely important that land use, transport and economic planning work together. If they do, we shall achieve the best results. Therefore, the RDAs will have a major influence on how the money is dispensed and, more important, on the evolution of land use and planning issues.

The hon. Gentleman referred to a site that might be vacated as a result of a company's reorganisation. That site could well be considered by the regional development agency, and I hope that it will be able to find a better use for it.

The facilities that the Government have put in place will assist in managing the change that is inevitable and necessary in the hon. Gentleman's constituency. I believe that that change can be managed. Reducing unemployment by 30 per cent, in the constituency in the past three years is not a bad result. The hon. Gentleman's constituents will be better-off in terms of their disposable income and they will have a future to which they can look forward.

Question put and agreed to.

Adjourned accordingly at seventeen minutes past Nine o 'clock.