HC Deb 08 November 2000 vol 356 cc87-93WH 12.30 pm
Mr. Ronnie Campbell (Blyth Valley)

It was interesting to hear the back end of the previous debate. If we had some work in the north-east, there would be no need to build towns in the south-east—an argument that has been advanced by some hon. Members who represent southern constituencies.

This has been a torrid month for job losses in Blyth Valley. During the past two months, we have lost more than 500 jobs—530, to be precise. Courtauld's Ladieswear closed a few weeks ago, with the loss of 300-odd jobs. The rapid employment force is trying to find jobs for those people, but I do not know how many have been fixed up. I hope that the number is big, but I am not sure whether it will be. Valeo Security, a car component firm that makes locks, has also closed. Both firms were lost to foreign competitors. The managing director of Courtauld's told us that the stuff that was made in Blyth Valley was 70 per cent. cheaper to make in Sri Lanka, so the company is off there to make its ladies garments. Valeo Security decided to go to Czechoslovakia. I understand that at least two of the workers who were recently made redundant by Valeo went to the new location to train the local workers on how to work the line, as the saying goes. It is ironic that the company is establishing a factory abroad but the workers have to be trained by our people after they have lost their jobs. Unfortunately, that is the way things are today. At the time of the relocation, I asked the managing director whether the decision related to the single currency or the pound, but he said that although the pound was a bit high, such matters were not the first priority. The argument of both companies was that they could do it cheaper abroad. Obviously, that was our problem: cheaper wages abroad.

On top of those losses, during the past two years we have lost Wilkinson Sword to Germany and Cramlington Textiles has gone into liquidation. Somebody wanted to buy the factory and machines and to employ at least 80 workers, although there had been 300. However, the liquidator sold the machines to someone who sold them abroad. Blyth power station, which lies in the constituency of my hon. Friend the Member for Wansbeck (Mr. Murphy), closed completely in January. Half of our job losses occurred in the Port of Blyth, where several hundred workers have been paid off during the previous year.

In total, there have been 3,000 job losses in Blyth Valley and only 1,000 gains in two years. That is a significant loss, but until now we have not grumbled or complained. However, we have had a right rough couple of months in which 530 jobs have been lost and we have received no help at all. The employment force is trying to get these girls and boys fixed up with jobs, but I do not think that it is being very successful.

Mr. Denis Murphy (Wansbeck)

I congratulate my hon. Friend on having secured this important debate. Does he agree that high unemployment over many years, which has led to severe economic problems, has meant that car ownership is among the lowest in the United Kingdom, and that public transport is therefore more important? Does he agree that the single biggest improvement to public transport within the constituencies of Wansbeck and Blyth Valley would be the reopening of passenger rail services of the Blyth and Tyne line? That would bring huge economic benefit to not only our two constituencies but, the whole of southeast Northumberland. Will he join me in pressing the Government to give a firm commitment, in principle, to agreeing the scheme before the next general election?

Mr. Deputy Speaker (Mr. John McWilliam)

Order. I remind the hon. Gentleman that interventions should not be mini speeches.

Mr. Campbell

I do not mind that, as my hon. Friend made the valid point that the rail link would also come through my constituency. I am all in favour of that. I do not know whether the money for the rail link will be forthcoming; we will have to wait and see. Perhaps the Minister could answer that question when he replies to the debate.

My hon. Friend has prompted me to talk about two areas in south-east Northumberland—Blyth Valley and Wansbeck, which have 12 wards. Eight of those wards are among the most deprived 10 per cent. in the country, and five of them are in Blyth Valley. Wansbeck is the 18th most deprived constituency in the country, and Blyth Valley is the 88th most deprived constituency in the country. My hon. Friend's constituency of Wansbeck has the benefit of £3 million from the neighbourhood fund, but I cannot understand why Blyth Valley did not get any money, as it has five wards among the worst 10 per cent. in the country. As the Government decided to make it a district in which there are two wealthy wards—in Cramlington, which is a new town—the poor ones in Blyth Valley town have to stay poor. I cannot understand how the Government can justify that. The Minister may be able to justify that, but he gets paid for it. I have to tell people in my constituency, which has five wards among the 10 per cent. most deprived in the country, that because of the good wards in Cramlington, they have to stay poor.

Last week, I went to a meeting about the Barnett formula. Lord Barnett said, "Don't even think about trying to apply the Barnett formula, as it is known in Scotland and Wales, in England." He believes that money should be used to tackle poverty and deprivation at source. If it exists in Blyth town, money should go there. Money has not come to Blyth town because the Government's calculations show that it has a rich part. Blyth Valley is split in two—the old town of Blyth, and the new town of Cramlington. As one is rich and one is poor, the poor part has to stay poor. That is not good enough. The Labour Government were not elected to leave areas poor. Lord Barnett was right—we should tackle the areas that are poor. Will the Minister reply to that? Will he do anything about it? If not, will our right hon. Friend the Member for Hull—the Minister knows who I mean—

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson)

Our right hon. Friend the Member for Hull, East (Mr. Prescott) the Deputy Prime Minister.

Mr. Campbell

Well, whichever Hull it is, will he do something about it?

I want to return to the rapid response team, which is doing an excellent job. I do not have the figures for what it has done. I also want to return to the issue of job losses. A report in the local paper said that, in Stoke, Michelin was to close with the loss of 950 jobs. Local papers, television and "Newsnight" all talked about the terrible job losses in Stoke. The Secretary of State for Trade and Industry was under a lot of pressure, although we had not put any pressure on him. He launched a £110 million aid programme for Stoke, which suffered those job losses. The people of Stoke have my sympathy, but we have suffered 500 job losses and not had such a response. I hope that the Minister can tell me what is going on and why we have not received a similar response.

I remember the hullabaloo about the closure of Rover and all the money that would be invested to save jobs or retrain people. We lost 500 jobs a couple of months ago, but we have had nothing. What is going on? Why does the north-east not receive its fair share of money, as everyone else does? The Minister can tell us whether we are getting any money.

The Government must acknowledge that serious economic and social problems in the north-east need to be addressed, especially in Wansbeck and Blyth Valley. We have no status and do not benefit from urban development or city challenge money. Unlike Tyneside, Newcastle and south Tyneside, south-east Northumberland does not even have an enterprise zone. Blyth Valley and Wansbeck cannot even get a call centre, because the companies would not get free rent or any encouragement to go there; they all go to Newcastle and Tyneside, which have enterprise status. That status must be expanded to include south-east Northumberland, where we need help.

We cannot go on losing jobs and expect people to vote Labour at the next election when the Government totally ignore them. The Minister did not ignore Stoke—it got £110 million—but he is ignoring Blyth Valley and Wansbeck. He cannot ignore me, because I am telling him that he is totally out of order. We are not getting a fair crack of the whip.

Mr. Denis Murphy

My hon. Friend mentioned the economic problems of both our constituencies. Does he agree that, if our areas had been allowed to stand alone, we would have received objective 1 funding as a result of the poverty and deprivation?

Mr. Campbell

My hon. Friend is right. Devolution is at the hub of the argument. When devolution took place, the north-east lost out. People should make no mistake about that. When the Welsh Assembly and Scottish Parliament were set up, money had to go to Wales and Scotland. Wales received objective 1 funding and millions of pounds were put into Wales, but we got objective 3 funding, which was very little in comparison. That is the problem.

The aim of the national neighbourhood strategy is to arrest deprivation. The situation in the present climate is desperate. Some neighbourhoods in the north-east, including your constituency Mr. Deputy Speaker, are deprived. That needs to be addressed. I believe that your area Mr. Deputy Speaker, received a few million pounds from the neighbourhood strategy. Wansbeck and Easington got some funds, but Blyth Valley did not. Unfortunately, we have a case to make. The town has one of the lowest numbers of start-up businesses per head in the country. People do not come to start businesses in south-east Northumberland because we are not in an enterprise zone. We do not have anything to offer. We have only a bit of land.

We need some incentive. People from my constituency are coming down to see the Secretary of State for Trade and Industry on 16 November. They are coming down full of hope, but I have a feeling that they will go back disappointed. I do not think that they will get anything at all. The trouble with this Government is that their views are set in stone and they do not see some of the problems. They do not listen to their Back-Bench Members. They have never listened to me. I have had a couple of debates about the north-south divide, although I promised not to mention that.

This is a problem that Ministers must address. It is no good the Secretary of State saying that there are enterprise zones all over the north-east, as there is not one in Blyth Valley or Wansbeck. There is not one in south-east Northumberland and we are demanding one. Of course we can demand, but we may not get one. That is the problem we face. Funding is urgently needed in these areas. The Government's regeneration initiative should apply to areas that are in need.

I do not knock the new deal for one minute. It has done a good job in getting young kids to work or involved in some sort of training. Not all of them have been good schemes and not all have resulted in jobs, but it is a good idea and I do not knock it. With all these kids getting on to these schemes, youth unemployment has gone down in my constituency, but adult unemployment has risen by about 10 per cent., according to the latest figures. We need action and we need some money. I only hope that the Minister will reply in the affirmative and give me and my constituents some encouragement and hope for the future.

12.47 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson)

I congratulate my hon. Friend the Member for Blyth Valley (Mr. Campbell) on securing the debate, which is obviously of great importance to other hon. Friends in the area. That is underlined by the fact that my hon. Friends the Members for Wansbeck (Mr. Murphy) and for Easington (Mr. Cummings) and my right hon. Friend the Member for Bishop Auckland (Mr. Foster) are present. I readily accept that my hon. Friend is a passionate advocate for his area and his constituents. I hope that I can clear up some of the ambiguities in the short time available.

My hon. Friend referred in his final comments to an increase in adult unemployment. That is not borne out by the figures that I have. I should be interested to know how adult unemployment is defined because various measures are used. The figures I have show a 2.3 per cent. reduction in claimant unemployment in my hon. Friend's constituency since 1997. If long-term adult unemployment is defined as being unemployed for more than a year, the reduction has been something like 50 per cent. since the last general election. If it is defined as being unemployed for over two years, as we generally think of it, it is down by two thirds. I should therefore be interested to clarify those figures, perhaps outside the debate.

My hon. Friend raises serious issues. We are unfortunately aware of the closures that have taken place in Blyth Valley over the past 12 to 24 months. I know that Blyth Valley council estimates that anything up to 3,000 jobs have been lost in that period. As my hon. Friend said, my right hon. Friend the Secretary of State for Trade and Industry has agreed to meet councillor Dave Stephens, leader of Blyth Valley council, and council representatives to discuss employment opportunities in Blyth Valley. That meeting is scheduled for Thursday 16 November. Perhaps it can be a natural progression from our debate today.

I was extremely concerned to hear of the most recent closure announcements at Courtaulds Ladieswear and Valeo Security Systems. I appreciate that a combined loss of 500 jobs was a crippling blow to the area, but it is important to acknowledge the work that was done to try to prevent it. Officials from the Department of Trade and Industry were in contact with both companies, making offers of regional selective assistance to try to prevent the closures. It is unfortunate that they could not be prevented. The companies had made strategic decisions and the offers of regional selective assistance were not accepted. It is important to emphasise the fact that the offers were made.

Blyth Valley council has set up and led a rapid response team to deal with both closures and to help those losing their jobs. The former Courtaulds workers have benefited from that, and I understand that rapid response funding is available to help them gain new employment. The sums involved are exactly in line with the assistance offered in the examples mentioned, and the principle is the same. We might not be able to affect the decisions of the company, but we can make financial assistance available to help people deal with the consequences of closure. We did so in Blyth Valley in relation to the two most recent closures.

The initial figures from the Employment Service are encouraging. They show that 50 former Courtaulds employees have already found work, and it is estimated that another 30 will do so in the next few weeks. The vast majority of those ex-employees are being placed in similar occupations in the area.

Valeo Security Systems is undergoing a gradual rundown of staff, with most of the work force likely to have left by December, although the plant will remain open until the middle of next year. The Employment Service is providing an on-site job shop and aims to highlight the considerable transferable skills of the work force to employers in and outside the area, with special emphasis on north Tyneside, where several recent job announcements have been made.

The two closures are not the only recent ones in and near the constituency of my hon. Friend the Member for Blyth Valley. The closures of Wilkinson Sword and Cramlington Textiles were severe blows to the area. I share his frustration about Cramlington Textiles, which had a large order book shortly before the closure. In both those cases, many employees who wanted to stay in work have found employment elsewhere. That says much about the high quality of their transferable skills, and reflects the level of opportunities that our policies have helped to ensure exists.

The assistance that I mentioned relates to only the most recent closures. In the light of the comments made by my hon. Friend about the north-east, it is important to note that the area as a whole has benefited from substantial Government assistance. I want to highlight some of the help that has been given to Blyth. Before I do, I should mention the point made about the rail link made in an intervention by my hon. Friend the Member for Wansbeck. The Minister responsible—it is a matter for the DETR—met a delegation from Northumberland, after which she was positive about reopening the Blyth-Tyne rail line. She awaits the findings of a study that it was agreed would be set up. That is as much light as I can throw on the matter.

For industry, the area is covered by revised assisted areas maps, so it is eligible for regional selective assistance and enterprise grants. Since 1997, the Department of Trade and Industry has made 31 offers of regional selective assistance totalling £6,919,000, and relating to total project costs of £44,507,300. We estimate that those offers will lead to the safeguarding of 94 jobs and the creation of a further 1,345 jobs. I know that my hon. Friend and his colleagues in the north-east will do all they can to contact companies in their constituencies, which do not always understand the assistance available, and encourage them to pursue the funds via my officials in the Government office of the north-east. Perhaps that would be a useful part of the discussion that will take place with my right hon. Friend the Secretary of State next week.

Blyth Valley's share of the region's European funding has been significant. In the period 1997–99, the district received £3,530,834 from the European regional development fund and £551,917 in European social funding. My hon. Friend appreciates only too well that the regional development agency, One NorthEast, along with its regional partners, is the lead body that is responsible for the economic development in the region. Its framework for doing so is based on its regional economic strategy. I am sure that my hon. Friend is aware that, in July, the Chancellor announced a national £500 million increase to regional development agencies and One NorthEast will receive a portion of that.

One NorthEast has assisted with several funding requirements in my hon. Friend's constituency, such as for the Blyth Quayside infrastructure and environmental works, the Blyth community enterprise and resource centre, the Blyth Quayside offices and Richard Stannard house. Blyth has been in receipt of various single regeneration budget moneys. In SRB round 2, the Renaissance of Blyth received £3.9 million to fund its integrated five-year strategy and in SRB round 4, funding of £1.7 million was provided. In SRB rounds 5 and 6, Blyth was part of a joint bid for £30.6 million, which was submitted by the Northumberland Strategic Partnership. I did not go into so much detail to dilute the passion with which my hon. Friend spoke, but I need to put the record straight. Listening to him, one could have gained the impression that his constituency was being treated differently from others, so I have needed to draw attention to the amount of assistance that it has received so far.

I shall now refer more generally to the north east. Indeed, my hon. Friend has been a fiery advocate of a north-south divide debate on many occasions. While bad news stories tend to dominate the headlines, it is important to emphasise that the north-east has a vibrant economy. The area has a long history of industrial growth and change and, consequently, several jobs in traditional industries have been lost. However, manufacturing still accounts for 28 per cent. of gross domestic product and for about 20 per cent. of employment. Employment levels in the region are rising, Despite the job losses, some of which we have discussed today, 25,000 more people are in work than was the case one year ago.

I mentioned earlier the level of regional selective assistance offered to businesses in Blyth Valley. It is worth noting that, as a result of the 1999 revision of the assisted areas map, the north-east continues to have the most complete coverage of any part of the United Kingdom, with 97 per cent. of the population living in areas eligible for assistance. My hon. Friend pointed out the two wards that are unfortunately in the 3 per cent. bracket, but we are governed by the European Community and the area would not have met its guidelines if coverage had been extended to those wards.

Over the past four years, regional selective assistance offers in the north-east have assisted projects that will lead to the creation of 17,600 new jobs and safeguard a further 5,500. Since the introduction of enterprise grants in January this year, more than 80 small and medium-sized enterprises have been offered more than £2 million of assistance, creating 600 jobs and safeguarding a further 140.

We cannot be complacent. I am aware that business start-up rates in the north-east, while increasing, are still a long way short of the average for the rest of the United Kingdom. To improve that position, almost half of the resources available from the new objective 2 programme for European structural funds will be devoted to business support for small and medium-sized enterprises. The news across the country is good as is the news in the north-east. However, that is no help to the people who have lost their jobs in the two recent closures, but I must give the broad picture on the Government's behalf. Companies are continuing to invest and to create jobs. I pay tribute to the skills, resilience and determination of the work force. With Government policies and the passion of local representatives, I am sure that new employment opportunities will continue to arise in Blyth Valley and the north-east as a whole.