Cleveland: Employment Prospects (Hansard, 6 March 1991)

§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)
My Lords, in 1989 there were an estimated 1,700 new registrations for VAT in the County of Cleveland. The net increase was over 600, or 6.5 per cent. That is a faster rate of increase than the national average. Early indications are that nationally there was a continuing net increase in 1990.
There are no recent employment figures for Cleveland, but in the Northern region as a whole the number of people in employment rose by an estimated 21,000 in the year to September 1990. There are no projections of future changes in any of those figures.

§ Lord Gisborough
My Lords, I thank my noble friend for that Answer. It is good news for an area which has experienced exceptionally high unemployment. Can my noble friend say what contribution is being made by the Teesside Development Corporation?

§ Viscount Ullswater
My Lords, the Teesside Development Corporation has been very successful. There have been 109 successful projects since September 1987, when it was created, resulting in a total of over 3,000 jobs. That is forecast to rise in due course to 7,000 jobs.

§ Lord Rochester
My Lords, have the Government sought advice from any well-run companies in the area regarding how more new jobs might be created?

§ Viscount Ullswater
My Lords, yes. Cleveland is covered by the Teesside Training and Enterprise Council which has been fully operational since 27th April 1990. The TECs play a vital part in the national training network. It is their local knowledge which is important in devising the change of skills in older companies and industries needed for the new and more modern industries that are developing in Cleveland.

§ Lord Dormand of Easington
My Lords, the Minister was almost right. Is he aware that the Teesside Development Corporation has already created 3,082 jobs? When the projects already committed to the area are completed a total of 7,500 jobs will have been created in the area. As the deputy chairman of the corporation, I do not wish to boast, but does the Minister agree that that is a commendable record achieved over the short period of 1386 three years that the corporation has existed? Will he accept that Cleveland County Council's imaginative proposals for a light rail transit are commendable? Will the Government look sympathetically at the Section 56 application from the council when it is received?

§ Viscount Ullswater
My Lords, I take this opportunity to pay tribute to the noble Lord for the work that he has done for Teesside Development Corporation. I hope that that indicates the support of his party for development corporations. He is correct; a further 84 projects are planned to create a further 6,700 jobs. I understand that 60 per cent. of the activities involve inward investment especially from Scandinavia and the United States. That is a very good plan. I shall bear in mind his second point and draw it to the attention of my right honourable friend.

§ Lord Carr of Hadley
My Lords, will my noble friend agree that one additional reason for the relatively satisfactory situation in the North East as a whole, as well as Cleveland, is due to the activities over the past 10 years and more of organisations such as Business in the Community, local enterprise agencies and all the other activities which have encouraged business generally to play a larger role in the community?

§ Viscount Ullswater
My Lords, my noble friend is correct. Business in the Community launched the Teesside Tomorrow team to provide a focus for economic and social development in the Teesside area, and to complement the initiative of the Teesside Development Corporation. Cleveland City Action Team received £350,000 additional funding from the DTI. It now has a budget of £1.1 million, which is the largest in the country.

§ Lord Bottomley
My Lords, is the Minister aware that when I was the Member representing Middlesbrough, Cleveland was one of the most flourishing areas in the country? Alas, it is not so today. However, thanks to the Teesside Development Corporation prospects are looking brighter.

§ Viscount Ullswater
My Lords, I agree with everything that the noble Lord says.

§ Lord Mackie of Benshie
My Lords, in view of the gloom in the rest of the country, will the Minister consider putting the Teesside Development Corporation in charge of the whole country?

§ Viscount Ullswater
My Lords, it is the Government's express desire to bring those benefits to the whole of the country.

§ The Earl of Lauderdale
My Lords, the Teesside Development Corporation was one of the first bodies in Britain to instruct small companies to treat their accounts not as a tax dodging enterprise but as a management instrument. Does the Minister agree that that was effective in Teesside?

§ Viscount Ullswater
My Lords, I am not entirely aware of the facts which my noble friend brings to my attention. The figures I gave in my original Answer indicate that it is not only the Teesside Development 1387 Corporation that has been successful in creating businesses; a large number of small businesses have been set up in the locality.

§ Lord Williams of Elvel
My Lords, while we always appreciate the efforts of my noble friend Lord Dormand in all his works, is it not worth bearing in mind that the unemployment rate in Cleveland in January 1991, on the Department of Employment count, was 13.9 per cent. of the active population? Does the Minister agree that it is worth bearing in mind that the Cleveland County Council itself says that, based on past trends and current knowledge, it expects to have about 150 new companies coming to Cleveland next year but, because of job losses in large companies, there will be zero net growth in employment in Cleveland?

§ Viscount Ullswater
My Lords, the noble Lord is correct in part. The unemployment rate in Cleveland is one of the highest in the country. However, Cleveland has had a history of even worse unemployment figures when the industries that had been established there were wound down and before new industries were brought into play. Unemployment in Cleveland has dropped from 40 per cent. between 1986 and the present day. That indicates that there is room for improvement and a history of job creation in that area.

§ Lord Williams of Elvel
My Lords, does the noble Viscount agree with Cleveland County Council that the increase in employment in 1991 will be zero?

§ Viscount Ullswater
My Lords, that is pure speculation. I have indicated that in 1989 there was an increase of 21,000 jobs in the area.