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Rother Valley (Unemployment)

Volume 827: debated on Friday 3 December 1971

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4.0 p.m.

My contribution in the preceding debate, brief as it was, was relatively lighthearted. The speech I must make now cannot be anything but excessively sombre and serious because the economic position in my constituency is now worse than at any time since the 1930s and is deteriorating to a serious and alarming extent. The Minister will therefore appreciate that I cannot apologise to him with any sincerity for detaining him in the House on a thin December Friday.

I am pleased to have this opportunity of raising in the House this serious constituency position. The Minister will be aware that the Rother Valley is Yorkshire's most southerly constituency which contains two urban districts and 27 parishes in two large rural districts and has a population of 130,000, the bulk of which is contained in the Rotherham, Dinnington and Maltby employment exchange areas. Small parts of the constituency are included in neighbouring areas, but in every part of the district the unemployment rate is above average, and in every one the position is worsening. More and more people are becoming unemployed and fewer jobs are available.

In Maltby area the latest figure of male unemployment was 8·8 per cent. and the rate in Rotherham was 8·2 per cent. The position in Dinnington is horrifying since the male unemployment rate is 10·5 per cent. The scale of the problem not only brings to light problems of worklessness but illustrates the appalling waste of human resources involved. It seems to us in South Yorkshire that little note is being taken of our plight. It is a plight which is as bad as, if not worse than, that in the development areas of Great Britain. Indeed, I was told in answer to a Parliamentary Question on 11th November that the rate in Dinnington was worse than in all but eight of 374 employment exchange areas in England and Wales.

The sad thing is that in early-1970 the position gave us great cause for hope. We had achieved intermediate area status and it was beginning to have an effect. Those of us who were at that time involved as members of local councils were gratified because this showed that our efforts were bearing some fruit in securing an improvement in our status. That fruit seems now to have withered. It is right to refer to those earlier efforts because like latter-day Gradegrinds, the present Government appear to believe in self-help. South Yorkshire has helped itself and we still have tremendous need for help. We exerted great pressure in 1968 and 1969 and it is right to pay tribute to the local newspapers, the Sheffield Star, the South Yorkshire Times and the Rotherham Advertiser, which have supported those charged with both national and local representation in our efforts to press the cause of our area. But the inexorable tide of events has made self-help almost irrelevant. The lame-duck philosophy dominates and so the problems and injuries proliferate.

It is clear that since 27th October, 1970, when the Chancellor of the Exchequer made his statement about public expenditure, our hope for development was reduced. This dashed our hopes and was echoed by the Investment and Building Grants Act this year which ensured that there would be a savage reduction in expenditure on regional aid. Since October the level of inquiry and the amount of develoment have fallen off drastically. As these have slackened, contractions and redundancies have increased.

The Chancellor of the Exchequer seemed to be unaware of the effects and the Secretary of State for Trade and Industry so misread the situation or his brief that a little earlier this year, when he told us that the number of inquiries being made about industrial development had greatly increased, they had in fact been considerably reduced. Whenever the problem is raised, we seem to get a Pavlovian response from the Government, who tell us that it is all due to high wages, The position in South Yorkshire is not largely the result of that state of affairs. That excuse, to us, is as hackneyed as it is superficial.

In my Parliamentary Question, I suggested that the unemployment was largely due to history and to changes in technology. There seemed to be a glimmer of hope that this idea was appreciated when the Under-Secretary gave a relatively sensitive reply. However, those hopes were dashed shortly afterwards when the Secretary of State returned to the same theme. It is quite wrong for the Government to repeat this excuse so tediously.

I do not blame the Under-Secretary for all these dreadful developments. The responsibility must lie at the door of the Prime Minister and the Chancellor of the Exchequer. They have failed. They have failed our area by not perceiving both the needs and the potential of South Yorkshire. Those needs and that potential are great. Our local authorities and many of our local organisations have shown energy and initiative. They have achieved only frustration.

I draw the Under-Secretary's attention to one illustration in regard to the Hellaby industrial development site, for which we pressed vigorously in 1969 and 1970. An application was submitted in 1970. I was told that a planning inquiry would not be held. I heard that the Department had decided to hold a planning inquiry two days in advance. I asked the Minister to hold it without delay. It was held in December, 1970. I was told that a decision would come very shortly after Easter. It reached our area in the middle of the Summer Recess. Months were wasted.

Of itself, Hellaby cannot provide more than a part solution to the problem, and only a minor part. We are facing increasing difficulties. The Minister will be aware of the redundancies being created in the steel industry. Only a few days ago 200 men were declared redundant at Parkgate in the special steels division of the corporation. Short-term working is widespread, and more redundancies are feared.

Coal is important. I have 10 pits in my constituency which are doing well. They should have a secure future. But I should like to see the morale of my area improved by the Government offering some real guarantees that the long-term prosperity of these vital parts of our local economy is assured. If one of those pits were to close, the additional burden of anguish on the Rother Valley would be considerable.

Coal employs fewer men. The industry is producing much more coal with half the labour force. It is becoming a capital-intensive industry, and that is right. But we have not got the diversification that we need to compensate for it. In the private sector at the moment unremitting redundancies add to the difficulties.

The Government have no answer except perhaps to tell our local authorities to get deeper into debt by going ahead with certain schemes. Some of those schemes are capital-intensive. It seems odd that we should pay £10,000 or £20,000 for the creation of every new job when perhaps, it would be better and cheaper to treble unemployment benefit. The Government feel that they have made tax concessions, but it will be months if not years before any effect is felt in South Yorkshire as a result of those changes.

The Chancellor of the Exchequer is regularly optimistic and, just as regularly, his optimism is proved to be ill-founded. The recent N.E.D.C. report is more realistic. It is more gloomy. But surely it is better to face facts than to indulge in optimism. There is too little investment. There is too little growth. At the same time, we have an increase in productivity which means that the lack of investment cannot cope with the redundancies that are created.

We in South Yorkshire feel that there must be answers. They have to be found quickly. I hope that the Under-Secretary can give some of them. However, I propose to suggest some answers which occur to us in South Yorkshire as relevant, wise and timely.

First, it is essential that the British Steel Corporation's expansion programme should be approved without delay. This is necessary on economic and industrial grounds in order that we have new development to replace that which is now contracting.

Secondly, there must be a greater emphasis of public pronouncement that the coal industry will have a strong and viable future. Views recently expressed by one of the leaders of our oil industry are relevant. I hope that at a very early date the Minister will consider not merely giving guarantees of employment, but ending the present arrangements for importing coal. The need for an uplift of morale in the coal industry makes this essential.

Thirdly, and perhaps most important, my area needs to be uplifted to development status. It needs development status not merely as it is now with the levels of inducement which are currently provided, but with even more capacity to attract new industry.

We need a change in national attitudes. We need a greater sense of purpose. We ought not to have had the disgraceful decision which was recently taken about the Millspaugh works in Rotherham. I accompanied a deputation led by my hon. Friend the Member for Rotherham (Mr. O'Malley) to see a Minister in the Department of Employment. We tried to convince the Minister that there should be a minor adjustment of the employment exchange areas in our district. This would have provided new work involving over 1,000 jobs. But the Minister refused to make that minor adjustment. The result is that those jobs may not now come not only to the Rotherham area but to Britain. Other countries may benefit from the virtual profligacy which the Government displayed over that incident.

I suggest that the Minister should look carefully at other minor matters. He could perhaps extend, or approve the extension of, the scheme under which unemployed young people receive financial reward or remuneration during training provided by local education authorities. The pilot scheme is under way not far from my constituency. That scheme could be extended.

I hope that the Minister will consider providing encouragement, if not making the arrangements himself, for the development of direct-labour and labour-intensive schemes to provide employment for unemployed younger people in activities devoted to promoting environmental improvement.

I suggest further extension of retraining; but this by itself seems relatively pointless because, unless there are guarantees of employment, people will not be keen to take retraining. These measures—I do not over-stress their importance—may provide useful and temporary help.

Certainly help must be given rapidly in my area for younger people. This week there are 271 young people unemployed in the Rother Valley youth employment exchange area. The situation, as the area officer told me this week, remains grave. This is particularly sad because we have splendid schools, very good employment advisory services and many other advantages, but not enough jobs.

Those who are seriously interested and concerned about our society locally are becoming extremely anxious about this aspect of the situation. They are anxious not merely about young people who are jobless, but about the many young people who are taking the first job which comes along which often offers them no opportunity for satisfaction and fulfilment. Able young people are taking jobs which offer them only the activities of unskilled work. This is distressing. It also means that the less able youngster is not getting a job at all. This could be a recipe for social disadvantage in the long term. It could mean that our society will be distressed by current events long after those events have changed.

Work is needed, and it must be of meaningful quality. Many people who do not know South Yorkshire may feel that we suffer from historic legacies which have bred harsh attitudes. But if the Minister speaks to any local industrialist or manager he will inevitably meet the comment that the area provides first-class workers. They will not respond very happily to those who demand feudal attitudes. Our workers are not prone to fawning but they are prepared to co-operate with decent managers and management. This exists frequently and then we see the industrial result of good attitudes in industry.

We have a great deal to offer. The fact that we have had industrial problems in recent months may seem disadvantageous, but if the Minister looks at the response of the workers in the River Don steelworks issue he will see that it was not merely a response of aggression and opposition. It was a response which contained a great deal of thoughtful and constructive consideration. The workers themselves came out with suggestions which, I believe, are entirely worthy of consideration. That says a great deal for the co-operative attitude of the workers in my area.

Unfortunately there are far too few workers and, increasingly, far too many unemployed. This year has seen not only dark clouds—and they are still dark and are getting darker—but bitter blows, and more appear to be imminent. Without national help, without Government concern, we cannot avoid receiving serious wounds. These will hurt deeply the very fabric of our South Yorkshire society. It is in the interests of that society that I have spoken this afternoon. I trust that the Minister will have taken note of my remarks and that when he replies he will offer us a little more than platitudes.

4.16 p.m.

I am glad to have an opportunity today to discuss the unemployment problems in the constituency of the hon. Member for Rother Valley (Mr. Hardy). I know how anxious he and other hon. Members are about the position in and around the Rother Valley. I have listened with interest to the hon. Gentleman's views, and I congratulate him on the forceful presentation of his case.

At the outset, I should like to assure him that the Government are fully alive to the problem. We are today discussing a situation which, on the face of it, is depressing. We must all regret intensely the recent rise in levels of unemployment in the three employment exchange areas which comprise the hon. Gentleman's constituency, and I recognise that the current rates are above those for the region as a whole, and well above those for Great Britain.

The Rother Valley forms part of the Yorkshire coalfield, and its problems are those of the coalfield as a whole. It is precisely because of these problems that the area was designated an intermediate area in March, 1970. As the hon. Gentleman said, the Rother Valley has traditionally depended on two basic industries—coal and steel—for much of its employment. Unfortunately, both these industries have contracted in employment terms over the years. However, I am glad to see that more recently there has been much greater stability in the coal industry, both nationally and in the Rother Valley, and this is reflected in the fact that the current employment figures do not include any substantial numbers of coalminers. It is encouraging to know that none of the colliers in the vicinity of the hon. Gentleman's constituency is in jeopardy.

The situation in the steel industry, however, is, I know, one of some difficulty at the present time, and the figures reflect a certain amount of short-time working in various sectors. Also the Sheffield area, like other steel-making areas, is feeling the effects of rationalisation of the steel industry. It had long been recognised by many authorities that steel rationalisation was essential. The Benson Report of 1966, for example, suggested a reduction of 100,000 in the industry's work force by 1975, and the British Steel Corporation's own assessment in January, 1969, foresaw a reduction of 50,000 by 1975, 40,000 because of rationalisation and 20,000 by greater productivity offset by 12,000 new jobs arising out of expansion of capacity. This is a painful but necessary process that we must go through if British Steel is to compete on equal terms with strong international rivals. The hon. Gentleman and the House will recall that when the bulk of the steel industry was nationalised in 1967 one of the reasons put forward in its support, anticipating the B.S.C.'s assessment to which I have referred, was that it would permit badly needed rationalisation to take place. The 1965 White Paper referred specifically to rationalization—

One accepts that the existing activities of the B.S.C. will have to be rationalised and that this will cause redundancy, but in the absence of guarantees for the expansion programme of the corporation, the necessary new methods will not be introduced, which means that there will be no fresh jobs created unless the Government take a much more urgent view of the situation.

Perhaps I can come to the investment programme in a moment.

The hon. Member mentioned specifically the B.S.C.—Firth Brown proposal. It has long been recognised that there is a need for rectification of anomalies in the public—private sector boundary created, especially in Sheffield area, by steel nationalisation. The previous Government accepted this need as do this Government. For example, in 1967 the then Minister of Power, I think Mr. Richard Marsh, approved an agreement under which the B.S.C. transferred half the equity in the Round Oak steel works to Tube Investments in recognition of the technical difficulties arising out of nationalisation of these works.

Another example of this kind was the Sheffield Rolling Mills project in Sheffield in which the B.S.C. became a partner with private interests. The B.S.C.—Firth Brown proposals arose out of a very long series of negotiations between the two parties concerned: there was no question of their being imposed by this Government. The settlement and implementation of the proposals is for these two parties, and the future of individual works, such as River Don, is a matter for the B.S.C.

This interpretation of the statutory position has long been accepted by successive Governments. But, as regards River Don, the hon. Member may know that the deputy chairman of the B.S.C. has indicated that, as a result of discussions still continuing, he is hopeful that parts of the works may have a longterm future. Negotiations are still continuing, and the B.S.C. has said that the unions will be fully consulted before any final decisions are taken.

The hon. Member asked when decisions could be expected on further steel projects, especially those in his constituency and the Sheffield area generally. As he well knows, individual investments are, in the first instance, a matter for the B.S.C., but the B.S.C.'s future development programme generally is being considered by the corporation and the Government jointly. This is a very complex exercise which aims to chart the strategies open to the corporation in the long term; thus, it is bound to take some little time and is a task which it would be wrong to hurry. The Secretary of State will make a statement as soon as possible. I would, however, like to make it quite clear that the Government are not holding back B.S.C. investment; in the current year the approved figure is the historically high one of £225 million.

The hon. Member referred particularly to the problem of unemployment among young people. It is, of course, distressing when young people—I have especially in mind here school leavers—cannot find a first job. The problem in Rother Valley has shown a deterioration over the last year, taken as a whole. Nevertheless, I was glad to see that there was a fall of 65 from 581 in the number of unemployed young people between October and November and that the majority of school leavers have now found work. The Department of Employment is ready to do everything it can to help unemployed young people. At present, it is paying half the costs of various courses run by certain industrial training boards for suitable young people who have been unable to get apprenticeships; taking Rotherham and Rother Valley together, 19 are now on such courses.

Turning for a moment to the national situation, the hon. Member and others have pressed for Government action to stimulate the economy generally and to bring more employment to the assisted areas. The hon. Member implied that the Government were failing to act and were altogether too complacent.

There is a good deal of lose talk on these lines which I am convinced can only come by a failure, or a refusal, to look at facts. The relevant fact here is that the Government have taken a whole series of measures, which, taken together, are unprecedented in their scale, to secure faster growth in the economy and consequently to increase employment generally. These include tax cuts equivalent to an annual rate of £1,400 million; abolition of hire-purchase restrictions; cheaper and easier credit; and, since July, increased expenditure equal to some £450 million on public works and other items directed towards reducing unemployment in the short run especially in the assisted areas. These efforts to stimulate the economy illustrate the Government's determination to find a solution to the problem of unemployment. Directly and indirectly the Rother Valley should benefit from them.

I have already recognised that the Rother Valley is still very dependent on two basic industries, and that more diversification would be valuable. But we should recognise the changes that have taken place in recent years in diversifying the pattern of employment. In the three employment exchange areas concerned, while employment in coal mining and the metal trades fell by nearly 6,000 in the period 1960 to 1969, employment in other industries and the services increased by over 7,000. I realise that one would wish that alternative employment had been introduced on a still greater scale. As part of the Yorkshire coalfield intermediate area, Rother Valley is now able to offer substantial incentives to new industries which, I am hopeful, will enable it to do even more than it has in the past. I think we should remind ourselves what these incentives are: building grants of 25 per cent., and in some cases 35 per cent; Department of trade and industry factories for rent or for sale; Department of Employment assistance for training and for the transfer of key workers in the setting up of a new project; favourable tax allowances for new industrial buildings.

The hon. Member made out a powerful and eloquent case that Rother Valley should be given development area status. I do not think that this is a topic that can really be treated separately from the question of the right level of assistance for the Yorkshire coalfield as a whole. As I have already said, the area is an integral part of the coalfield and its industrial and environmental problems are those of the coalfield as a whole. The hon. Member will know that we have looked very carefully at this question. We examined in detail the case for a change as part of the comprehensive review of assisted area coverage carried out earlier this year. We decided then that, bearing in mind the long-term and deep-seated problems of areas such as Clyde-side and the North-East, we could not justify any higher level of assistance to an area which has substantial locational attractions.

We must recognise that increasing the number of assisted areas or enhancing the status of areas which are already assisted does not create new industry, it merely spreads more thinly the limited and inadequate supply of projects. We keep a continuing watch on the circumstances of all areas to ensure that the pattern and degree of assistance continue to reflect need. But I assure the hon. Member that I.D.C.s are freely available in the area of his constituency.

The hon. Member referred to planning permission for the Hellaby site. As he will appreciate, this is a matter not for me, but for my right hon. Friend, the Secretary of State for the Environment, and no doubt he will pursue it with him. I am certain that when the economy generally is growing—and the hon. Member knows what steps we are taking—no doubt industrialists will come forward with new projects. The assisted areas, with all the inducements that they can offer, and especially those like Rother Valley with locational advantages, should then be well placed, of course, provided that industrial relations are right, to obtain a good share of the increased facilities and employment that they will bring.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Four o'clock.