HC Deb 25 October 2000 vol 355 cc357-64

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

11.58 pm
Mr. Joe Ashton (Bassetlaw)

I am grateful to have the opportunity to put the case of my constituents, and I would like to thank hon. Members, especially my hon. Friend the Under-Secretary of State for the Environment, Transport and the Regions, for staying up until this late hour.

My constituency of Bassetlaw in North Notts is where three counties meet—Derbyshire, Yorkshire and Nottinghamshire. I am surrounded tonight by hon. Friends with problems similar to mine. My constituency covers 300 sq m, has 38 parish councils and also a traditional coal, textiles, food, glass and farming industry base. Like many other regions in the area, it was devastated by pit closures between 1986 and 1993.

In 1997 a new Labour Government came in and granted enterprise zone status to Bassetlaw, giving substantial tax breaks and aid to certain parts of the constituency. In January the outlook was so promising that the Bassetlaw development agency confidently forecast that 12,500 jobs would be created in that area of north Nottinghamshire and north Derbyshire in the very near future. That was just 10 months ago. The Manton Wood regeneration site attracted Solway Foods, Haslewood Foods, Cacao's French Chocolate and other firms, and other expansion created 1,000 jobs. However, since then this millennium year has consisted of 10 months of disaster.

Last January, Deema Glass at Harworth, which employed 420 people, went up for sale because its order books were running out. That caused much despair and distress in the area. The good news is that the firm is being bought by Marlin Lighting and Sylvania International, but no one knows how many jobs will be saved or what will be done with the firm.

In July, Courtaulds announced 650 job losses resulting from Marks and Spencer's policy of buying abroad rather than in Britain. Factories controlled by Courtaulds and supplying Marks and Spencer are in future to be built in Morocco and Sri Lanka. Courtaulds is training workers there to earn £20 and £13 a week to replace British jobs. In effect, it is exporting British jobs abroad.

Why should such small countries be allowed access to the European Union market? That will simply create more profit for Courtaulds. Although those small countries need to be bolstered with aid and have in the past received concessions, the profit created for Courtaulds in Morocco and Sri Lanka simply puts more workers in Worksop on the dole.

It gets worse. In September, Coats Viyella said that 260 jobs would be lost in Worksop. We must remember that about 18,000 people are in employment in Worksop, so losing 1,000 jobs is pretty devastating. Moreover, the effect of the Coats Viyella decision went beyond Worksop; all of Nottinghamshire and Derbyshire is affected. Of the 3,000 jobs to go at Coats Viyella, 2,000 involved skilled workers in areas still reeling from pit closures.

On 29 September, the Worksop Guardian ran a story under the headline "Batchelors Bombshell". The sub-headline stated "450 Workers Face Axe in Factory Shock", and an article on the inside pages asked

How much more can a town like Worksop take? Unilever announced that the 450 jobs at Batchelors were at risk because Unilever had formed a merger with United States food producer Bestfoods, which gave that firm too big a share of the market. Batchelors makes Oxo cubes, mushy peas, chicken noodles and other basic foods. However, Unilever will have to axe 25,000 jobs over the next five years, many of them in places such as Worksop.

Factories and jobs based in north Nottinghamshire and north Derbyshire are being moved around Europe as though they were chess pieces or counters on a monopoly board. I am glad that my hon. Friend the Member for Mansfield (Mr. Meale) is present for the debate. In his constituency, Johnsons, a firm run from Cologne, closed with 550 job losses, even though it had received a grant worth £1.75 million from the Department of Trade and Industry in 1991. Other jobs have been lost at the local breweries and other plants, which will in future be relocated to Czechoslovakia. That country wants to enter the EU in four years time, and such jobs will attract wages of £50 a week.

The steel firm Corus has plants in neighbouring Rotherham, Sheffield and Scunthorpe. Almost 4,000 of its workers have been made redundant nationwide—more than at Rover. Another 700 jobs have been lost at the Biwater plant on north-east Derbyshire. I am glad that my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) is present for the debate.

Mr. Harry Barnesx (North-East Derbyshire)

I am glad that reference has been made to the Biwater plant. The situation there is disgraceful. The multinational company Saint Gobain has moved in to buy the plant and close it, so that the order book can be stolen and moved overseas. The jobs lost will go to South America, China and elsewhere, even though there is a viable industry in this country producing material for overseas.

Mr. Ashton

My hon. Friend is right, and he has hit the nail on the head. These are not bust and derelict factories that are going rusty because their trade has been exhausted. They are suffering from a deliberate policy of wheeling and dealing in jobs from the north midlands region. There is not a level playing field within the EU in that regard. It is much cheaper to close down plants and transfer jobs in Britain than in other EU countries. That is why ours are the first to go. Redundancy costs are cheaper here because often the Government, not the factory, bear the cost.

European competition laws demand that new buyers must abide by the Transfer of Undertakings (Protection of Employment) Regulations 1981. It means that they have to pay the same wages. However, not very long after the transfer has been made, the new owner has taken over and the dust has begun to settle, a restructuring is allowed if market forces demand it. So the downsizing starts, because people can easily prove that the market demands restructuring.

Pension rights are not covered. Unilever provides very good pension rights, but there is no guarantee that the new buyer will maintain them. The new owners will constantly rationalise the industries to get their money back, and jobs will go. Over the past 12 months, the forecast has been that north Nottinghamshire and north Derbyshire will lose 4,000 jobs, with only 1,600 being created. Unemployment could rise well over 5 per cent., and wages in our area are already £2 an hour below the national average.

The Government announced on 10 October that £800 million of aid would be given to the 88 most deprived areas of the country, yet unbelievably, although Bassetlaw is the eighth most deprived area in the east midlands development area, it was not included. I am not protesting about the fact that Bolsover—my hon. Friend the Member for Bolsover (Mr. Skinner) is here—Mansfield, Ashfield, Rotherham, Doncaster and Sheffield will all receive some of the £800 million of extra aid for the most deprived areas, but why has Bassetlaw not been included?

We cannot understand why the new neighbourhood renewal fund that the Secretary of State for the Environment, Transport and the Regions announced has a formula for inclusion that obviously does not include a place like my constituency, where unemployment has rocketed in the past 10 months. We have some very deprived areas; they were once thriving coal mining areas but sadly there has been nothing much there since the pit closures. We are seeing sweeping changes in north Nottinghamshire that are almost as bad as the pit closures in terms of the number of jobs lost.

There is chronic insecurity. Cottam power station, in my patch in Bassetlaw, has just been sold to London Electricity for £400 million. Seven hundred jobs are involved. What will happen to the people working there? Will there be redundancies? Nobody knows.

R.J.B. Mining, whose headquarters is at Harworth in my constituency, recently tried to sell the industry. Despite picking up a £75 million cash handout from the Government, it tried to do a deal with an American buyer, Renco.

We are all loyal supporters of the Government, and we accept that they are doing sterling work. They are doing marvellously well to bring in new jobs, but doing that takes at least two years from the planning stage to getting the grants, and the jobs are being lost virtually overnight. That is due not to redundancy but to the work being shifted to countries with cheap labour costs, such as Czechoslovakia or Hungary, which are trying to enter the European Union, or to existing EU countries where it is much more expensive to shut something down.

There must be some control of this wholesale wheeling and dealing in jobs. Lives, and even whole towns, are being destroyed by accountants, not because the industries are losing money but because they can make more money taking British jobs abroad. I am sure that I speak for my hon. Friends here tonight when I say that the workers cannot understand why the Government do not insist on some sort of EU regulation to stop this happening so easily and quickly.

12.9 am

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes)

I congratulate my hon. Friend the Member for Bassetlaw (Mr. Ashton) on securing the time for this important debate. He has set out clearly and with great feeling—as I would expect of him—the issues that affect and have an impact on people in his constituency and, more generally, in north Nottinghamshire and the wider region.

I agree with him that it has been disappointing to see the level of job losses and factory closures in Bassetlaw and the neighbouring area, especially over the past few months. Certainly, the Government recognise that the north Nottinghamshire area is going through some fundamental changes. As my hon. Friend said, some recent changes have had a considerable impact on the local people.

The role of the Government in addressing such issues is threefold. First, the success or failure of an area and the activities in it are dependent on conditions in the economy as a whole. I hope that my hon. Friends will agree that we have worked hard to try to ensure that the economy is stable, and that, in turn, has enabled investment to be made in all our regions.

Secondly, we need to address the imbalances that exist in people's lives and opportunities—not only between regions, but within them. It is because we recognise those imbalances and because we want to bring those who are most disadvantaged up to the level of the best that we have introduced a strong regional economic development policy through the work of the regional development agencies. I know that is very important for the development of the east midlands.

Thirdly, in some instances, the Government can take specific action locally, as well as regionally and nationally, to respond to particular and sometimes critical circumstances, such as those described by my hon. Friend. Regeneration, unemployment and so on have to be addressed nationally, regionally and locally. I shall touch on those aspects, while also trying to address some of the points raised by my hon. Friend.

The message given by my right hon. Friend the Secretary of State for Trade and Industry to the Birmingham chamber of commerce in August this year emphasised that the Government have an industrial policy based on three clear principles. First, we are trying to put in place the building blocks for the future—to enable industries to obtain the skills they need in their work force and to access the new knowledge bases that they need; and to ensure that they have the necessary communications infrastructure so as to create a strong enterprise culture in Britain.

Secondly, we are creating a modern regulatory framework that helps innovation and encourages growth and increased productivity. Modern economies are complex. Governments take a huge range of decisions that have an impact on industrial success. Our role is to ensure that sustainable wealth creation and business growth are at the heart of those decisions in Britain.

Thirdly, we are trying to provide world-class, forward-looking business support for businesses to expand at home and overseas—helping manufacturing and services. We are promoting innovation and providing opportunities for emerging industries and markets.

The core of that strategy is that we are trying to help industry and businesses to look to the future as the only way of ensuring sustained growth and employment. However, as a Government, we also have to consider the present. My hon. Friend is quite right to direct our focus on events currently occurring in his area. As industries restructure and the economy changes, some industries are facing traumatic change.

It is important to point out that we are not in the business of stopping change in industries that need to modernise. Propping up old ways of working and inefficient processes is not the way forward. However, we also need to help established industries in the regions to modernise and compete in new markets. We are trying to support people and communities through what are sometimes difficult periods of change.

We are investing in training and skills to ensure that those affected by such changes can find new, quality jobs. We are trying to encourage enterprise—to support new firms that have the potential to grow. We are stepping up our work on attracting new investment in growth industries, as well as helping companies in the supply chain to innovate and to adapt.

Cash injection can only ever be a partial solution, although it has a limited application. There have been some cash injections locally, to which I shall refer. However, we also need new instruments focused on giving companies the knowledge and capabilities that they need to succeed.

My hon. Friend laid great stress on what he felt was the impact of the potential for companies to move businesses—and therefore take jobs away—from this country to other parts of Europe and indeed the world, and he is right to identify the fact that there are global challenges to many of the businesses that are in this country. We have a very limited remit in respect of some of those challenges, as Government can have only a limited impact on the potential for companies to respond to opportunities elsewhere in the world. We are not unmindful of the issue, but the potential that we have, either alone or through Europe, to create what my hon. Friend called a level playing field is quite limited. However, I do recognise that those are real issues that companies in his area and elsewhere are facing.

Mr. Alan Meale (Mansfield)

I understand what my hon. Friend is saying, but obviously there are instances in which the Government can act—for instance, as my hon. Friend the Member for Bassetlaw (Mr. Ashton) intimated, regarding Czechoslovakia. That country is making an application to join the European Union and is basically giving away large sites, pre-built, for companies to move from western Europe before it enters the European Union, at costs with which, clearly, we cannot compete.

Secondly, we have policy in relation to the Department of Trade and Industry, which is paying, and has paid, huge sums of money to multinational companies to come to coal mining areas such as north Nottinghamshire. In the instance of Johnson Control, £1.7 million was given to that company, and at the same time was refused to local companies that wanted to expand. Companies come in, make a fast buck and then sell out on to the open market and move overseas and make money there. Obviously that is not a sensible policy in terms of countries that want to join the European Union, over which we have control in terms of the directives that we can oppose. We could also say that we will not be any part of the Treasury policy in future.

Mr. Hughes

I take the points that my hon. Friend makes. I would simply put it to him that we cannot make such changes in European regulations and directives unilaterally. Such changes have to be made through processes at European level, and there are wider issues. This is a difficult thing for my hon. Friends to hear, and I understand that, but there are wider issues pertaining to the reasons why we want, and are encouraging, certain countries to join the European Union. I understand what my hon. Friend is saying about the way that he feels—that some of those countries are using their pre-entry position to entice businesses, but that is something that, in terms of our own internal national policy, is very difficult for us to regulate.

Mr. Meale

I understand where my hon. Friend is coming from, but there is a difficulty. We can influence directives. We can oppose them at the Council of Ministers. Clearly Britain is being affected prior to these countries' application. The textile industry in Britain is being riven by companies moving from this country abroad. The car industry and the glass industry are similarly losing out to Czechoslovakia. We can say through the Council of Ministers that we are sorry but we object to these directive concessions.

Mr. Hughes

Well, we can, and we could in theory, but that raises some fundamental issues that must be dealt with across government. It is not simply a DETR question; it is not simply a DTI question. My hon. Friend is raising—I understand why, and he is right to do so—very fundamental questions, which would have to be decided at the heart of government and at the highest level. I am afraid that, as he knows, I am not in a position to give him a response on that here tonight, but I will ensure that the views that he has expressed on these issues will be heard and will go to the relevant Departments.

I wanted to touch on what the Government are trying to do to assist at the regional level and to tackle imbalances between regions. All my hon. Friends will be aware of the work being done by the East Midlands development agency, with which they have all had contact. It is trying to deal with some of the problems that they have raised tonight.

As a result of this year's comprehensive spending review, Government support for the regional development agencies will increase from £1.2 billion a year now to £1.7 billion in 2004. Clearly, some of those resources will go to the east midlands to try to tackle some of the issues that have been raised.

Mr. Barnes

The problem is that many areas face immediate difficulties that will not be dealt with by developments that will make changes in the future. Emergency action needs to be taken in certain areas. At the Labour party conference, my right hon. Friend the Secretary of State for Trade and Industry said that

when there is real pressure and difficulties in areas like textiles, coal and steel and in specific plants like Biwater in Clay Cross—we must not stand to one side. We won't walk away. In the case of a viable firm, such as Biwater in Clay Cross, reference should surely be made to the Competition Commission, because it has the right to say that certain moves are hitting exports, creating unemployment and distorting industry in various areas. Therefore, action can be taken to stop such moves. Such action is required.

Mr. Dennis Skinner (Bolsover)

rose—

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. The Minister must reply to one intervention before she gives way to another.

Ms Hughes

I will deal with the specific points that my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) raised, but I am perfectly happy to hear my hon. Friend the Member for Bolsover (Mr. Skinner) and give a composite response to their questions.

Mr. Skinner

The Government have decent intentions, but the two years of Tory spending plans did not help and we have lost a lot of time. The pits were closed in most areas and the women in many pit villages worked in textiles. They were the breadwinners, but they have now lost their jobs. In many constituencies jobs have been lost, and in Bolsover alone in the past seven months, 800 jobs have been lost and most of them were held by women. They feel that no one is helping them.

We have made a proposition for massive infrastructural changes. They will need a bob or two, but the Government are not short of money. Development at a junction just off the Ml would provide about 9,000 jobs and a link between the Ml and the Al would make the area just like Corby. Remember Corby? The steel industry went but a link road was built. The net result was that the whole area blossomed in terms of industry. Similar action is necessary in my area and it must be done sharpish. We have got to save the Clay Cross Biwater plant, too.

Ms Hughes

In terms of a hard-edged response to some of the local issues, I am a little surprised that my hon. Friend did not mention the rapid response fund. The Government-led response group was established to help the workers affected by large-scale redundances and the closure of the Coats Viyella factories throughout the east midlands, including in Worksop. I am sure that my hon. Friend will know that rapid response funding of more than £1 million for people affected by the closure or scaling down of Coats Viyella sites in the area has taken place. That money will help people to retrain and it relates to the points that he made about the need for money to help people access jobs by improving transport links or by enabling them to develop new skills.

At Courtaulds, £300,000 of rapid response funding has been agreed to alleviate difficulties caused by the closure of its factory in Worksop. At Johnson Control Automotive (UK) Ltd. in Mansfield, I understand that a bid for rapid response funding is to be made shortly and that it is likely to be for more than £250,000. Similarly, in south Yorkshire, which borders the constituency of my hon. Friend the Member for Bassetlaw, rapid response funding of more than £1 million has helped redundant workers to find jobs.

I understand that change has impacted in many ways on family members, particularly in the textile industry. My hon. Friends will know that, in response to the industry-led textile clothing strategy group's report, in June this year my right hon. Friend the Secretary of State for Trade and Industry unveiled a plan to help the textile industry adapt and improve to meet global changes in the sector. It offers a number of practical measures to support the industry directly through its supply chain and retailers. The point about the need for a new junction on the M1 to help people to access jobs is important. My hon. Friend the Member for Bolsover will know that the matter is progressing and I hope that there will be a favourable outcome.

Difficult decisions had to be made concerning the neighbourhood renewal fund. The top 50 authorities that scored on any one of the six measures of deprivation received the funding. As has been said, they included Mansfield and Bolsover, but not Bassetlaw.

I hope that my hon. Friends accept that the Government are trying in a number of ways to address the problems that their areas face. However, the Government cannot change the situation locally without the kind of partnerships on the ground that I know my hon. Friends want to support. We recognise the many real difficulties that people face, and we are trying, nationally, regionally and locally, to create opportunities whereby local partners can begin to turn the situation around.

I recognise the many difficult issues that have been raised tonight and, as far as I can, I shall take those up with the Departments within whose remits they lie. But I hope that my hon. Friends will accept that at those three levels the Government are trying to address the problems that they have rightly outlined tonight and that we recognise.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Twelve o'clock.