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Rhyl (Area Status)

Volume 932: debated on Thursday 19 May 1977

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

10.0 p.m.

In the next few months many thousands of people who visit my constituency will visit Rhyl in particular. They will come because they have been before or because friends have recommended them to come. They will not come because of any recommendation by the Wales Tourist Board, which seems to regard the place as being not quite posh enough to meet its standards, and whose brochure includes virtually no holiday accommodation in Rhyl.

Those who come to Rhyl will have a good time. The weather really is better than it is a few miles away. The people are kind and welcoming. Above all, Rhyl is exceptionally good value for money. But if they keep their eyes open and look around, the visitors to Rhyl will see a town slipping downhill—not exactly slipping, but being pushed. As they walk from the station or the bus terminal to the beach, they will pass the empty shops in the High Street. There are now 50 empty shops in the town.

When they get to the famous golden sands they may be a bit put off by the visible evidence at the water's edge of the pollution that goes on unchecked in Liverpool Bay. If they do not fancy a paddle in the sea, or if it comes on to rain—and even in Rhyl it rains sometimes—they will wander along the promenade to where the borough council is trying to put up an all-weather sun centre, the first major investment in Rhyl's principal industry for many decades.

The first thing they will notice is that no work is being done on it, nor has there been for weeks. The trade union militants seem to have it in for Rhyl as surely as the Government have. The Government, in the person of the Secretary of State for the Environment, did their best to wreck this desperately needed project by frightening off the merchant bankers who had offered to put up the money for it. The Secretary of State for Wales, to his shame, refused to lift a finger to help. He even refused to receive a deputation from the council to advise it in its perplexity. But Rhyl managed to surmount this particular obstacle placed in its path by the Government, as it will have to surmount as best it can the Government's latest act of spiteful discrimination against it.

If he seriously wants to bathe, the visitor, for this season at any rate, will have to go inland to the sports centre and pool at Rhyl High School. If he were to run into the headmaster or careers master, he would be given some pretty frightening statistics. He would be told that, for example, this summer there will be some 210 pupils leaving school and competing for a job in a market which last year offered only 102 openings and seems likely to offer fewer this year. It is not, therefore, surprising that unemployment among males between 16 and 24 is over 24 per cent.

It comes as an even greater shock, since the total female unemployment figure is "only" 8 per cent., to learn that among females in the 16 to 24 age group it is 45 per cent. Of course, after that age they give up hope and drop off the register and that helps to keep down the total figure. Even so, unemployment is still 14·3 per cent., and 197 per cent. for males.

None of this is surprising when we look at particular companies in the area. Chance Pilkington, which has for long been the best employer in the area, has reduced its work force from 800 in 1975 to 569 at present. In addition, ITT, which was perhaps the principal provider of jobs for women, has cut down even more drastically, from 401 in 1975 to 162 today. Its work was largely on Post Office contracts, and the Post Office has a rule giving preferential treatment in the award of contracts to firms in full development areas.

About the only bright spot is the agreement recently concluded between the Welsh Development Agency and Wettern Composites, which may lead to the advance factory built in Marsh Road taking on rather more than the half dozen or so who have been working there for the past year. But there we are talking about tens of jobs, not about the hundreds of jobs which are so urgently needed.

I am not, and never have been, a great believer in the effectiveness of the whole cumbrous apparatus of development areas, special development areas, investment incentives, employment premiums and so on. I would far rather see first-class road, rail and air communications, coupled with direct Government action where it is in their power to act directly—for example, in the dispersal of Government offices. But that exercise, arising from the Hardman Report, brought not a single job to Rhyl, although Rhyl's need for more office jobs is even more desperate than is its need for factory jobs.

Even though I am deeply sceptical about the contribution that development area status can make to effective regional policy, I cannot ignore the serious danger to my constituency and to the jobs of my constituents now that almost the whole surrounding region has full development area status, and Rhyl and district do not. I fought as hard as I could for development area status for the whole of Clwyd. In August 1974 I wrote an anguished letter to the Secretary of State for Wales warning him of the fragile employment situation in the area and telling him that if it was left until the unemployment there had begun to rise steeply, it would be too late. I gave all the support I could, across party barriers, to the hon. Member for Flint, East (Mr. Jones), who is an Undersecretary of State for Wales, over help for his area.

Never in my wildest dreams did it occur to me that any Government could possibly discriminate in this matter between East Flint, where unemployment is high and rising, and West Flint, where it is much higher and rising just as fast. I did not believe that a Secretary of State for Wales—even this one—could for one moment be party to so blatantly unfair an arrangement.

The Secretary of State for Industry, announcing that East Flint was to get development area status and West Flint was not, spoke of "potential for industrial development ". Potential for industrial development indeed! That really is adding insult to injury. A drowning man whose head is being held under water has little potential for industrial development. I do not suppose that the man who fell among thieves on the road from Jerusalem to Jericho had much potential for industrial development, either. I do not know whether to cast the Minister in the rôle of a priest or a Levite, or, perhaps more aptly, as the thief who beat him up in the first place.

Of course, the Secretary of State for Industry did not really mean that Rhyl was being denied help because it lacked potential for industrial development. What he meant was that it belongs, and will continue to belong, in the wrong political camp so far as he is concerned. Certainly after this kick in the teeth the Labour Party in West Flint can kiss goodbye to its deposit in any election in the next few years. But if the right hon. Gentleman can forget party political advantage for one moment, he might reflect on the fact that the Good Samaritan was not in the same political camp as was the man who fell among thieves.

My constituents have had a raw deal from this Government. Therefore, I look to the Minister tonight to give at least some evidence that he is aware of this and that he intends to do something about the situation. Will he join me in urging the Wales Tourist Board to be less snobbish in its attitude towards Rhyl? Will he look urgently into the anomaly whereby, because industry in Rhyl and Prestatyn are excluded from the benefits of development area status, tourism is likewise also excluded and this exclusion carries with it the still further disability that tourism in the area is debarred from obtaining EEC funds? This is an example of taking away from them that have not even that which they have.

Will the Minister see to it that Rhyl and Prestatyn are given top priority in the allocation of any jobs that may result from any further dispersal of Government offices? Perhaps more to the point, will he see to it that a directive is issued to the innumerable new agencies that sprout overnight like mushrooms—the Development Agency, the Water Authority, the Land Authority and all the rest—that when they are setting up branch offices they are to give absolute priority to the Rhyl employment exchange area?

Above all, will he undertake to examine forthwith the situation which has arisen in the Rhyl area, where unemployment, particularly youth unemployment, is slipping out of control into a vortex—an area which, at a stroke, has been made that much less attractive to anybody thinking of bringing new jobs into the area or of expanding existing employment within the area?

In short, will the Minister now do something to dispel the well-founded suspicion that in the matter of regional policy the Government are concerned not with the employment needs of any area, but solely with whether they have any hope of clinging on to the seat at the next General Election?

10.11 p.m.

I thank my hon. Friend for allowing me to intervene in his debate. I associate myself with the complaint that he has made about the exclusion from development area status of this small part of the coastal belt of North Wales. I am glad to be able to support him, because I think that I am the only other Welsh Member part of whose constituency is outside the development area.

It makes geographical and administrative nonsense to cut out this small part. The effect is serious. Tourism is a most important industry in this area. Without development area status, there is little that the Wales Tourist Board can do to help, and, of course, any hope of getting EEC funds is excluded.

I believe that the criteria of unemployment in deciding whether development area status should be granted is wrong, because by the time unemployment has come about it is too late to do anything effective. I suggest that a more reasonable criteria would be economic activity.

If the Government need a ground for departing from the rules, I suggest the lack of infrastructure in the area. I hope that they will listen carefully to the pleas of my hon. Friend and myself.

10.13 p.m.

This subject is important. The Government are much concerned about the consequences of unemployment wherever it is—in Rhyl, its surrounding area or anywhere else.

I categorically refute the claim by the hon. Member for Flint, West (Sir A. Meyer) that development area status is decided on political grounds. I utterly reject that. I also refute the allegation at the beginning of his speech about spiteful discrimination. The hon. Member has said that he was not a great believer in the assisted area concept. I am pleased to see that he has been converted on the road to Damascus.

The hon. Member once said:
"Of all the emergency measures which might be taken, the least justifiable is the sloshing around of development area status, special development area status, intermediate area status, and so on"—

That makes my point even stronger, and perhaps it provides more reason for having this debate.

The hon. Member went on to say:
"what might be called, if my hon. Friend the Member for Ludlow (Mr. More) were present, the Oswestry syndrome. All that this does is to shift puddles of unemployment from one place to another, rather like councils in South-East England trying to move gipsies from the area of one council into the area of an adjoining council".—[Official Report, Welsh Grand Committee, 28th April 1971, c. 30.]
Unemployment is a serious matter. I am pleased that the hon. Member for Flint, West is taking it more seriously than that quotation indicates he did in the past.

I welcome the opportunity to explain the background to the recent changes in the assisted areas and why it was decided not to make Rhyl a development area. The objective of regional policy is to deal with structural industrial and employment problems. Most areas with such problems are old industrial areas in which traditional industries—coal mining, steel, shipbuilding, textiles and so on—have run down but have not been adequately replaced by newer industries as these have chosen to go elsewhere. Problems are exemplified by high unemployment even when labour is short elsewhere over-dependence on a few industries and hence vulnerability to any changes affecting those industries, emigration, dereliction, and generally poor environment. The need here is to widen the existing industrial base by bringing in new industries with good long-term prospects to replace the declining industries.

In other areas problems are different. These are the rural and seaside areas, such as Rhyl, which have never been extensively industrialised and which depend largely on agriculture and service industries, especially tourism, which the hon. Gentleman mentioned. These areas also need help, but not necessarily the same help. Although some of the symptoms are the same—high unemployment, especially during recessions, emigration of the young and immigration of the retired and near retired, creating an elderly population—the underlying characteristics are quite different. These areas need relatively small projects to strengthen their industrial base and reduce dependence on the service sector.

They do not need—I am sure that the hon. Gentleman would agree—major industrial projects, such as steel works, chemical plants and so on, because that would alter the whole character and nature of their attractions; indeed, It would end their attractions. Therefore, we must consider measures taken to help different areas against that background.

Regional policy is inherently long term. It seeks to deal with underlying structural problems, and it must inevitably take some time to have full effect. It is not directly concerned with the problems caused by the present world recession and, indeed, the whole of regional policy has developed from the 1930s and has been continuously developed since that time. The problems arising from the world recession must be tackled in other ways. I shall be commenting on that later.

Regional policy seeks to influence the location of industrial development by encouraging industry to develop as far as possible in the assisted areas. Regional assistance is designed to offset the additional costs involved in siting projects in these areas and to provide a deliberate bias in their favour. The grading of areas and the level of assistance available in them reflect the nature and seriousness of the problems in these areas.

There are three main forms of regional incentives: regional development grants, regional selective assistance and Government factories. All are available in special development and development areas, with a higher rate of regional development grant in the special development areas. Selective assistance, factories and regional development grants on buildings are available in intermediate areas, such as Rhyl. The main industrial benefit available in development areas but not in intermediate areas is thus RGDs on plant and machinery. In seaside and rural areas selective assistance is probably the most useful form of assistance as it can be tailored to the needs of the area and the project and it is specifically linked to the provision of safeguarding of jobs.

It is against that background that decisions were made recently about changes in the assisted areas. As I have said, regional policy is concerned with long-term trends. At present, these are difficult to determine as they have been overlaid by the very high unemployment experienced by many areas, and indeed, many countries in Europe, as a result of world recession.

We would have preferred to leave the coverage unaltered until overall unemployment began to fall but there were some areas whose problems could not wait. These were areas in which prospects had worsened not merely as a result of the recession but because of particular developments affecting them; for example, the closure of the Courtaulds works in Flint, and the fishing dispute and several closures and redundancies in Hull and Grimsby—the closure, for example, of Imperial Typewriters in Hull. I do not need to emphasise the difficulties that have arisen peculiar to those ports because of the fishing dispute.

These areas needed extra assistance to overcome these specific blows. In considering their applications for higher status, the Government also looked at the position of other areas seeking higher status and those relatively prosperous areas whose existing status might no longer be necessary. The statutory criteria for the designation of the assisted areas are set out in Section I of the Local Employment Act 1972 as amended by the Industry Act 1972. This requires the Secretary of State to have regard to
"all the circumstances actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies".
Therefore, it does not depend exclusively and solely on the level of unemployment. Unemployment is thus only one factor, albeit an important one.

Another vital consideration is the effect of any changes on other assisted areas. The assisted areas in general and the special development areas and development areas in particular are already very extensive, covering 43 per cent. and 23 per cent., respectively, of all employees already. Quite clearly, any further extension of coverage would erode the preferential advantage given to the existing areas. In total land surface, about 65 per cent. of the United Kingdom is already covered by assisted area status.

It was for that reason that it was decided that changes should be kept to a minimum and that some areas should be downgraded to intermediate areas to counterbalance the effects of upgradings. We have had representations about the downgrading to the status that Rhyl already has.

It was decided to upgrade Shotton, Hull and Grimsby to development areas but not Rhyl or Bridlington or several other smaller areas with higher unemployment because, as I have explained, it is not only unemployment that counts. It is also necessary to have regard to the characteristics of the areas concerned and their prospects for industrial development. Shotton, Hull and Grimsby are all industrial centres with prospects for extensive successful industrial development if assistance is provided to help them overcome their immediate problems.

Incidentally, development area status is not an easy solution in any event because Cardigan, for example, has development area status and at 17·5 per cent. has a much higher level of unemployment than Rhyl. Yet there are other areas of non-assistance, such as Clacton, which is a similar seaside resort and close to London in the South-East—we also get representations from the regions that too much is going to London and the South-East—yet Clacton, with non-assisted area status, has an unemployment level of 11·7 per cent.

The areas of high unemployment are not simply those in the assisted areas and the problem peculiar to seaside resorts stretches right across the whole of the non-assisted and assisted areas.

The Government were satisfied that the availability of regional development grants on plant and machinery in Hull and Grimsby would make a significant difference to their prospects for attracting the sort of new industrial projects which they need. The situation in Rhyl and the other areas in question is different. Most of these areas, as I have said, are largely rural and seaside. The problems from which they suffer are typical of such places. The Government were not satisfied that in their circumstances the availability of development area benefits would significantly improve their prospects while it would, by extending the development areas further, erode the preferential advantages of the existing areas.

This is by no means to underrate the acute problems in these areas—unemployment in Rhyl is at a level which can only be regarded as appalling—but only to say that there are other and more appropriate methods of tackling the problems that have arisen.

I should like to spend a moment outlining the measures available to which the hon. Gentleman has referred. First, there are the regional incentives already available. The selective forms of assistance can do much to encourage suitable development in the area. A Government advance factory has been built and successfully let. Four projects are going ahead with the aid of selective financial assistance and are expected to create some 240 jobs of which most have already been provided but it is hoped, up to 70 jobs are yet to come.

This is a small but nevertheless valuable contribution to reducing unemployment in the area at a time when new investment generally throughout the whole country has been low, and when there has been little mobile industry to steer to the assisted areas. When the economy improves, the availability of selective assistance will be an essential asset in encouraging industry to invest in Rhyl. The Welsh Office will take every appropriate opportunity to interest companies in developing in the area.

I add that my hon. Friend the Undersecretary of State for Wales is present and is taking an interest. I know that he has met the hon. Gentleman to discuss a particular aspect that the hon. Gentleman has raised in the past. I would also point out that, in order to enable the Government to provide more selective assistance, we have abolished the regional employment premium. This has not been done without criticism from the development areas. However, we have done it so that areas of greatest need, including areas such as Rhyl which are not subject to REP, can have temporary employment subsidy given to them.

As I have demonstrated, the unemployment levels are variable. I am happy to point out that currently in the Rhyl area there are 136 workers who are subject to temporary employment subsidy, and that means that 136 jobs have been saved, it is hoped permanently.

Secondly I refer to the Welsh Development Agency, which can contribute to the development of industry in any part of Wales. The Agency has recently announced that it has taken an equity stake in the Wettern Electric Company which is developing a new power cable jointing system. The WDA has taken a 30 per cent. stake and will advance £150,000 to the company by way of short-term loans.

The NEB and the Scottish and Welsh Development Agencies were set up against the opposition of the Conservatives. Already the Conservatives have promised to abolish the NEB, yet here is the WDA operating specifically to the benefit of Rhyl and providing jobs. The financial support of the WDA should enable the company's work force to be increased from 20 to 75 as production expands. The Agency will be ready to support other worthwhile companies in intermediate areas or elsewhere.

Thirdly, the Government have introduced various measures to reduce unemployment caused by the recession. These include the temporary employment subsidy, the job creation programme, job release schemes and schemes to reduce unemployment among young people. The hon. Member for Flint, West mentioned this as a matter of grave concern. It is a matter of grave concern all over the country, Rhyl included. But in Rhyl we have provided 159 places under the work experience scheme. Under the recruitment subsidy for school leavers, 58 school leavers have been assisted. Under the job release scheme, 66 people have been assisted. These schemes have therefore been of direct value in the area.

The Department of Employment is already at this moment considering methods for bringing jobs and helping young people. This is a matter of serious and real concern to the Government, and we are tackling it as best we can against a background of very severe economic difficulty. Certainly by the end of last month the schemes I have mentioned had secured several hundred jobs in the Rhyl area.

The hon. Member mentioned the importance of tourism to the economy of the area. I refute his suggestion that the Wales Tourist Board has discriminated against Rhyl on some basis of snobbery. The board expects certain standards to be maintained and it is certainly extremely willing to advertise all the facilities in Rhyl which meet its standards. I am sure that all Welsh Members recognise that the board is doing a good job.

The board's general expenditure on tourist research and development in Rhyl, its contributions to information services and to the work of the North Wales Regional Tourism Council, and its spending on marketing and publicity all help the area, as they help other centres of tourism. I do not think that the importance of this help should be under-estimated.

The real background to all this, however, is that we have an economy which is in difficulties. A more buoyant economy benefits all parts of the country, including Rhyl, and including both industry and service industry. That is the real key to development in Rhyl and elsewhere. The solution lies, therefore, in the success of the Government's industrial strategy, in getting our economy buoyant once again with export-led manufacturing expansion. I hope that over the next few years we shall see industry developing as I have suggested, because I am equally certain that those general benefits will help Rhyl.

The Question having been proposed at Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.