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Skelmersdale New Town

Volume 28: debated on Monday 26 July 1982

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

2.55 am

In raising the question of unemployment in Skelmersdale, I shall seek to prove that the town is a special case with special problems and that it needs special help which, in the main, only the Government can give.

The unemployment figures for Skelmersdale are distorted because, for statistical purposes, it is linked with Ormskirk to form a common travel-to-work area. I think that the Minister of State, who met some of us earlier today, will agree that the 23·8 per cent. unemployment rate for the area as a whole is the highest in the North West and one of the highest in the country. However, that figure is diluted. The real unemployment rate for Skelmersdale is 34·3 per cent., and male unemployment there is 38 per cent.

The total number of unemployed in the combined travel-to-work area is 7,316 out of which 5,424 are registered in Skelmersdale. As I have explained, for statistical purposes we are linked with the old town of Ormskirk, because of which the figure is diluted, and while an unemployment rate of 23·8 per cent. is bad, the real level for Skelmersdale is staggering. There are no new jobs, unemployment is high and there is no sign that the problem will be cured. It really is a dead end. Skelmersdale certainly has the highest rate of male unemployment in Great Britain, and apart from a few special areas in Northern Ireland, it must have one of the highest rates in the United Kingdom. As a special development area, Skelmersdale is allocated the highest level of grant-aid that it is possible to get. We must therefore ask how this situation came about and what can we do to remedy it.

As we reminded the Minister this morning, a few years ago Skelmersdale suffered several serious body blows and in two or three fell swoops lost about 3,000 jobs. Although jobs can return in tens, twenties or even fifties, it takes a long time to fill a hole that big. In fact, it has never been filled since two companies left in such tragic circumstances a few years ago. That is why Skelmersdale now has such a high unemployment rate. The figure in Skelmersdale over the past 10 years has always been above the regional average. As the number creeps up nationally, so it mounts in Skelmersdale. The highest unemployment in the North West is to be found, I believe, at Birkenhead where it amounts to 20 per cent. The figure for Liverpool is slightly lower. If there is to be fine tuning, one has to spotlight where it should occur.

This is a grim picture. It will be made worse in Skelmersdale when 300 Dunlop workers, now serving 90 days' notice, join the biggest queue in the United Kingdom. Earlier today, the Minister was kind enough to meet, at short notice, a deputation led by myself that included three of the leading members—although they would be too modest to say so—of the Labour group representing Skelmersdale on the West Lancashire district council. They were the leader of the council, Councillor Geoffrey Ellman supported by Councillor Malcolm Ford and Councillor Ray McManus. The Minister must have been impressed with the case that they put and the answers that they gave to his searching questions.

The Minister will have been left with a profile of a town of about 42,000 people. It will not reach the planned figure of 80,000 envisaged in 1961. The figure grows only slightly. As one would expect in a new town, 33 per cent. of the population is under 16 years of age. There is a heavy dependence of engineering, semi-skilled and unskilled jobs. Only about 8 per cent. of those employed have managerial, administrative or office type jobs.

Skelmersdale is not relying solely on the Government. There is a high degree of self-help. A name that has become almost famous in the Department of Employment is that of Father McKenna, who has generated infectious enthusiasm among those with whom he has come into contact. Over 500 young people who would otherwise be wasting away on the scrap heap are involved in Father McKenna's scheme, which endeavours to instil work disciplines and work skills. It is a tragedy that, at the end of the day, there is nowhere for these young people to go. Some are saying that it is not worthwhile taking part in the scheme because they cannot profit from the experience. I believe that hope must be kept alive for these young people.

The Government recognise, I hope, that they have a special responsibility. I am not condemning a Tory Government for planning the new town in 1961. I would probably have cheered had a Labour Government planned it, among the others that Labour created. It was to be a new town offering a better, richer and fuller life than could be provided in the old Merseyside region. People were attracted to Skelmersdale. Unfortunately, the bright dream has been rudely shattered. We now have a tragic situation. With unemployment on such a scale, although other regions make special pleas, Skelmersdale stands out, not as a disaster area, but as a black spot that needs considerable Government help.

The Government can offer help in three or four ways. The first is with Hughes International. The Minister knows of the company, because the matter is before his colleagues, although I had rather a dampening reply today from one of them. Hughes International is owned by an entrepreneur of the sort that the Government are said to favour—the "go out and get the business" type. He has promised to deliver—if the Government will be sensible about the export credit guarantee scheme—1,000 jobs to Skelmersdale. Those are real jobs, not Mickey Mouse jobs.

That business has been secured, albeit in Nigeria, in the face of intense competition; and Mr. Hughes wishes to have realistic help from the Government so that he can create 1,000 real jobs. If the Government do the sums of taking 1,000 men off the dole—no matter how risky the enterprise—they must reward Mr. Hughes' endeavours and enterprise by saying that they will not be as rigid on export credit guarantees as they may be in other circumstances. They should treat if as a special case.

The Government could also help us to build our new hospital. I told the Minister earlier today that the hospital has already passed the Government's test. They have conducted a profile to find what they call the "best buy", and Skelmersdale new hospital, slimmed down from the original grand design, passed the test. The reason why it was not built was that we were shunted from the Merseyside regional health authority into the North West regional health authority which immediately put us to the bottom of its long queue. Only the Government can rescue us. By doing that, they would fulfil a social need for a hospital. With such high unemployment, to force people to travel to the hospital in the nearest town of Ormskirk is a considerable burden. It would also create permanent jobs, both in the original construction and staffing of the finished hospital. The grand design will not be complete until the hospital is built.

Another way in which the Government can help is by directing some EEC grants in our direction. Corby, because of the closure of the British Steel Corporation works, was considered to be a disaster area. I do not know its rate of unemployment, but I know that it did not have 38 per cent. male unemployment. The Government treated Corby as a special case and it was locked into a system of EEC grants. I do not know whether the fund that helped Corby can help us, but there must be a fund into which we can be locked. Although there may not be enough money to help us with the Hughes International deal, there may be sufficient to build the hospital.

The Government should also take on board the proposal for the transfer of a Government Department. It would help to alter our profile if we had the managerial or administrative jobs that at present we do not have. Only 8 per cent. of our people are employed in that type of job. I understand that not all the Government Departments have been allocated, and I believe that Skelmersdale is an outstanding case for consideration.

I finish on that note, because I want the Minister to have a chance to reply. He told us this morning that he would do his best to answer some of our questions. I have known the right hon. Gentleman sufficiently long to know that he will do his best.

Skelmersdale is a town which, in its short history, has suffered a series of deep and heavy body blows. They have not been mortal. There is still a good life there. The people are willing workers. That, incidentally, is one reason why Hughes International went there. It had a profile done by outsiders on the best place to put a huge investment that would create 1,000 jobs and, contrary to popular opinion, Skelmersdale is not the worst of the new towns in the United Kingdom. It had the highest grant—something enjoyed by other areas—and it had good communications, but above all, it had good industrial relations. That is why a private entrepreneur is prepared to put a considerable amount of money into a place where he has faith in the people.

I come back to what I was saying. We have suffered many body blows. We need a boost. We need a fillip. We need to give hope to the people. We have suffered too much bad news. I hope that, as a result of this debate, good news will soon flow to Skelmersdale, that the Government recognise that it is a special case, and that they will give us the special help that is needed to deal with a special problem.

3.11 am

I congratulate the hon. Member for Ince (Mr. McGuire) on his success in securing an Adjournment debate, even at this late hour. I am grateful to him for giving me advance notice of some of the particular problems that he intended to highlight in the debate. This will enable me to respond in more detail to the points that he has made.

I am also grateful to the hon. Gentleman for arranging for me to meet this morning a deputation of councillors from West Lancashire district council. They have had a long day. Their endurance is as great as that of the hon. Gentleman. As a result of that meeting, I come to the debate this evening with a clearer understanding of the severe problems facing the area. The councillors presented their case forcefully, clearly, and enthusiastically. A number of the specific points that they made have been repeated here this evening, and I shall do my best in the time available to deal with each in turn.

The hon. Member and the local councillors are understandably concerned about the high unemployment in Skelmersdale. I can assure them that the Government and I share their concern. We are acutely aware of the problems and anxieties that confront those who lose their jobs, or the youngsters who see no prospect of finding one. Unemployment rose sharply under the last Government, as I am sure the hon. Gentleman will accept, and it has risen sharply under this Government. It is rising just as sharply under Governments abroad, although that brings no joy to anyone.

We are suffering particularly badly at present from a combination of factors which have conspired to raise unemployment levels generally. The international recession caused by the massive oil price rise is one factor. We have also been coping with a "bulge" of school leavers coming on to the job market.

The hon. Gentleman mentioned the 33 per cent. of youngsters under the age of 18 in Skelmersdale. That shows the youth profile of this new town. But in this country we have been suffering in particular from the weaknesses shown by Governments over the past 15 years on ducking the really difficult decisions. When one considers that during the 1970s wage rates went up by 350 per cent. while productivity required to pay for them went up by only 16 per cent., it is not surprising that unemployment rose sharply under successive Governments.

On top of all that, Skelmersdale, of course, has its own particular problems. The town suffered a major blow to its industrial base in 1976 when its two largest employers, Thorn and Courtaulds, closed with the loss of 2,500 jobs—25 per cent. of the town's employment. I recognise that that was a body blow. Since then the industrial development situation has been such that it has been difficult to secure sufficient employment opportunities to make good those gigantic losses.

The Government fully recognise the special problems facing the area; and it is for that reason that Skelmersdale will retain its special development area status when the rest of the Ormskirk travel-to-work area becomes non-assisted from 1 August. As a special development area, the new town will continue to benefit from the full range of regional financial incentives at the highest level available in Great Britain. Skelmersdale will, of course, also benefit from the Government's policy of reducing the number of areas eligible for regional assistance so that aid is concentrated to a much greater degree on places with the worst problems, such as Skelmersdale.

In the period since the Government came to office assistance worth over £1·7 million has been made available to firms in the Ormskirk travel-to-work area under section 7 of the Industry Act. It was estimated that this assistance would safeguard about 30 jobs and create nearly 1,800 new jobs. About £7 million in regional development grants has been paid to firms in the area. Nearly all of that assistance went to firms in Skelmersdale.

However, the only way to obtain substantial and lasting impovements in the employment prospects of Skelmersdale and elsewhere is to get the economy back on to a sound footing. This is what the Government's policies are concentrating on.

The hon. Gentleman would probably agree that the deployment of resources in Skelmersdale is not the most acute problem. Waiting for winds to blow into our sails is the root of our difficulties.

However, industry has to play its part too. It has to continue its efforts to improve productivity, reduce costs, improve the quality and design of its goods and become more adaptable to changing markets.

We are now through the worst of the recession, and employment prospects in the United Kingdom as a whole are improving. The news is no longer all bad. It is no longer all about redundancies—firms closing down, firms on short time—although I would be the first to admit that Skelmersdale has seen more than its fair share of these. There are plenty of good news stories too, even in Skelmersdale.

Rodco Ltd., for instance, a joint GEC-Pirelli venture, has now completed construction at Stanley of its continuous casting plant for copper wire bar and will provide employment for 120 when in full production later this year.

Despite the difficult circumstances, people in Skelmersdale are finding jobs. In the past 12 months nearly 2,800 people in the Ormskirk travel-to-work area were placed in employment by the MSC's employment service—nearly 2,000 of them in Skelmersdale. Many more, perhaps two or three times that number, will have found jobs by other means.

The development corporation has recently completed a number of nursery factories and standard factories of mixed sizes, some of which have aready been let. In the deputation visit the hon. Gentleman made a point about rents which I noted carefully. Last year the corporation completed several workshops and all were let quickly, mostly to new businesses. In fact I understand that since this Government came to office some 50 new small firms have been established in Skelmersdale. Those are now employing about 700 people. The corporation still has a considerable amount of purpose built factory space, readily available to meet any future increase in demand, which will place the town in an advantageous position when the employment opportunities in the area improve.

However, the hon. Gentleman has suggested this evening certain other ways in which the Government could help the area. The local representatives whom I met this morning also made a number of points, many of which I promised to look into, and I shall do so. They also handed me a copy of a detailed report, recently prepared by the council, on unemployment in the area which I hope to have the opportunity of studying in more detail later, although I had a chance to absorb some of its well deployed facts when I looked at it this morning.

At our meeting this morning the councillors suggested, for instance, that my Department and the Department of Industry might get together with a specially formed body of local industrialists, local councillors and educationists to develop special initiatives in the area. They also thought that it would be useful for my Department to join Liverpool or Lancaster university to mount a full-scale study of the real causes of unemployment in new towns. I have said that I will look at these and various other points and I shall certainly do so. Some, like the lack of further education facilities in Skelmerdale, I shall take up with my colleagues in other Departments.

There are one or two points that I can deal with now. There was some concern about the fact that changes in the funding arrangements for training workshops might jeopardise the future of the Skelmersdale training workshop. In fact, there have been no changes in the funding arrangemets for those workshops and none is envisaged. The sponsor pays 10 per cent. of the capital costs and the MSC makes up the other 90 per cent. Any capital replacement is funded in exactly the same way. I am told by the MSC that it knows of no problems or complaints arising from the Skelmersdale training workshop and its funding arrangements. I hope that that will be reassuring, particularly as I understand that this particular workshop is regarded by the MSC as one of the best examples in the country in terms both of its operation and the training offered.

The deputation was also concerned to know whether the young workers scheme covered young people already in employment. I can confirm that employers who already have 16 and 17-year-olds on their staff can apply for support under this scheme for their continued employment provided that the younsters in question have been with the firm for no more than six months and that the other criteria of the scheme, includng the maximum level of earnings allowed, are met.

The possibility that some Government work might be dispersed to Skelmersdale was also raised. A limited number of planned dispersal moves are in fact proceeding. But a dispersal policy is expensive and the need to contain public expenditure prevents any further initiative. However, when it comes to the location of new government work or the relocation of work for operational reasons, I am assured that the pressing needs of particular areas such as Skelmersdale—where the need is firmly acknowledged—will be given the fullest possible consideration.

The hon. Gentleman pointed out that one way of creating new jobs in the town, as well as providing a better medical service, would be for the Government to pay for a new hospital to be built. This is, of course, primarily a matter for my right hon. Friend the Secertary of State for Social Services, and I shall pass on the hon. Gentleman's comments to him. However, I understand that the North West regional health authority has a scheme in its capital programme for a community hospital in Skelmersdale which is programmed to start, I am afraid, some time ahead—in the early 1990s. The Skelmersdale scheme was originally to begin in 1981–82 but has, I understand—for the reasons sketched out by the hon. Gentleman—continued to slip back following revisions to the capital programme.

I am told, however, that the regional health authority has given priority to ensuring that primary health care services are available within the new towns. Four health centres have been opened and a further centre is under consideration. And hospital services are, of course, available at Ormskirk and district general hospital where major developments are planned to start in 1986–87. It was suggested at the meeting this morning that money might be available from the European Community to finance a hospital. I shall pursue that further, but my initial understanding of the situation is that while the Community supports medical research in certain fields, health, being a direct Government responsibility, is specifically excluded from the ambit of the Treaty of Rome. However, I shall look into the matter.

The hon. Gentleman criticised our export credits guarantee system. He mentioned, in particular, the problems experienced by Mr. George Hughes in obtaining Export Credits Guarantee Department support for large contracts, which he has been trying for some time to win in Nigeria. Again, this is primarily a matter for another Department, as I mentioned to the hon. Gentleman this morning. However, I will pass his comments to my colleagues in the Department of Trade. But I have already been advised by them that although ECGD is as flexible as possible in its requirements, experience has shown that unless the backing of the Federal Government of Nigeria is obtained for large commitments by the State Governments, the risk of non-payment is unacceptably high. A defaulting payer is bad news for everyone, including the workers in Skelmersdale. The ECGD is required to pay its way and so cannot make major exceptions in cases such as this one.

I believe that ECGD's counterparts abroad would require similar Federal Government backing for business of this magnitude; indeed, some have recently suspended support for business with Nigeria as a whole. Where the non-payment risks are clearly so substantial, the ECGD cannot be expected to bear the costs at the expense of other exporters who provide its resources through premium payments.

As I have said, future employment prospects in Skelmersdale depend primarily on setting the economy right. Given the difficulties in the outside world, that will, alas, not happen overnight. In the meantime, we are protecting those hardest hit, particularly young people, with our special employment and training measures. Over 1,900 young people have entered the youth opportunities programme since April 1981. Some 150 people in the Ormskirk travel-to-work area are currently benefiting from the temporary short-time working compensation scheme, the job release scheme, and the community enterprise programme. About 79 applications for the young workers scheme have so far been approved in the Ormskirk and Skelmersdale area.

Temporary help of this nature is all very well, but what young people—and all other age groups for that matter—need most of all are secure, permanent jobs. It is up to the Government to set the nation's economic rigging so that it will catch the trade winds when they blow. This we are striving to do in Skelmersdale and throughout the country. The rest depends partly on what happens in the world outside, but mainly on industry's own efforts to adapt and renew. I confirm that in due course I hope to write to the hon. Gentleman about the other detailed points that we discussed this morning.

The Question having been proposed after Ten o' dock on Monday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House, withour Question put, pursuant to the Standing Order.

Adjourned at twenty-five minutes past three o' clock am.