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Industry And Employment (Hayes)

Volume 33: debated on Monday 6 December 1982

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

11.15 pm

However late the hour, I make no apology for returning yet again to a subject of great concern to every family in Hayes and Harlington. I intend to be fairly brief, but I shall not mince words, as I feel considerable personal anger and frustration at what has happened over the years in the area that I represent.

Time and again since I was elected in 1971 I have drawn attention, both in Parliament and outside, to the progressive decline of industry throughout London, particularly the west London area. Only last year, in March, in a debate in the Chamber I called for a fresh appraisal of London's problems and the adoption of an entirely new regional approach. Looking through my files today I found that as long as 11 years ago, almost to the day, on 10 December 1971, I said in the House:
"The closure of long-standing industrial firms in the area has become a contagion which shows no sign of abating and, together with unremitting waves of redundancies, unemployment hangs like a black cloud over a once-prosperous and stable industrial community. The shock effects of large-scale unemployment in areas such as this run far deeper than in areas inured to it by past experience."—[Official Report, 10 December; Vol 827, c. 1782.]

That was 11 years ago. Today, following the last two or three years of deepening recession and inflexible monetarist policies, that contagion has become an epidemic. Closures of medium and small firms are now a monthly routine and fresh redundancies the weekly norm. Since 1979, the industrial blight in Hayes has become an economic blizzard as more manufacturing units have put up their shutters and more workers have been forced into unwanted idleness.

The position has greatly worsened lately, but it is only right and fair to say that the causes of unemployment go back a long way and that there can be no instant solution. I recognise that. On the local level, over the past decade successive Governments have turned a blind eye to the progressive decay. That may be one reason for the apathy and disenchantment with both Conservative and Labour Parties, which so many people in my constituency feel.

Throughout all those years the political complexion of whatever party was in office has made no significant difference to the people of Hayes and Harlington. The problems were apparent, but the policies remained unchanged. Periodically the faces of Ministers from both parties changed, but the same bland assurances have come from them all. Meanwhile, industry has continued to erode and unemployment to grow.

Perhaps there is a minor chink of light, which I hope will grow into a major prospect in due course, though it is a long-term trend, in the Stockley park project, which holds out hope of new commercial developments in the Hayes area and is welcome to the people of Hayes. The project has been approved by the borough council and the GLC. I understand that the Minister might be able to say something about the future of that project.

The downward trend has become so widespread throughout the area that it would be absurd to relate in detail again the statistics of decline. All industries in Hayes and Harlington have been affected. I could send the Minister a long list of the firms in my constituency which have closed for ever, been forced into liquidation or moved elsewhere under the pressure of London's high costs. A recent example is Callard and Bowser, a firm of high repute and a good employer in the area for many years, which has to move to South Wales because of the high cost of rates in London.

Unemployment in Hayes is nearly 8 per cent. and is the highest locally in living memory. I hope that the Minister will not say that that is below the London regional average, which in turn is below that in other regions. That will give no satisfaction to my constituents. Indeed, it would be on par with telling a man who suffers paralysis as a result of a car accident that he is lucky to be alive.

I ask the Minister to state bluntly whether he sees a serious long-term future for manufacturing industry in the London area. Do the Government intend to permit the continued sell-out of manufacturing plants engaged in modern technological production and their replacement by service industries which, useful though they may be, can provide employment for only a fraction of the present work force? If they do, thousands of skilled and semi-skilled workers and their children in my constituency face a bleak future.

Is it not an outrage and a tragic waste of a major national asset that such a cohesive work force, highly trained in specialist engineering and electronic production, should be pitchforked, like so much industrial scrap, on to the labour market to queue for the few unskilled jobs that become available in hotels and warehouses or for people prepared to wheel trolleys at Heathrow?

Long-term and youth unemployment figures are mounting. The local scene cannot be divorced from the national scene. Month after month the Chancellor of the Exchequer, or one of his acolytes, confidently assures the nation that the recession is coming to an end, that economic recovery is round the corner; yet the economic crisis deepens under the weight of blinkered policies obstinately pursued.

Last week's trade figures showed that the balance of trade in manufactured goods had swung from a substantial surplus last year to a deficit in the first 10 months of this year. We are now importing more manufactured goods than we are exporting and heading for the first peacetime annual deficit in manufactured goods for more than a century. The condition of many industrial firms—this is as true of Hayes as elsewhere—remains so weak that a continuation of the present level of orders would spell disaster for them in 1983, swelling yet further the unemployment figures. Far from becoming more competitive, Britain is showing a sharp deterioration in competitiveness, and this must sooner or later have serious consequences for the rate of inflation, which is the sole jewel in the Prime Minister's diadem.

We must get Britain back to work and we must get Hayes back to work. Labour's policies, I need hardly say, lack all credibility and the country views them with total disbelief. No hope lies along that road. But clearly there must be a controlled reflation of our economy and much more done to encourage small businesses, which are still over-regulated. The Social Democratic Party has advanced carefully thought-out plans for economic revival, including plans for the long-term unemployed and long-term job creation. Above all, we must initiate a major programme to improve the further education and training of our children and make it more responsive to the needs of industry.

When industrial collapse and unemployment hit Hayes, traditionally a bastion of industrial prosperity, the country really is in trouble. I hope that the Minister will not fall back on anodyne remedies. My constituents are too worried for that sort of thing. They hope to hear from the Minister what prospects of work there are for this industrious and responsible community, and above all what future their children have to look forward to. These have become the burning issues for an increasing number of my constituents.

11.27 pm

I congratulate the hon. Member for Hayes and Harlington (Mr. Sandelson) on securing the Adjournment debate. He has often expressed concern in the House about his constituents' interests, as I would expect from an assiduous Member of Parliament. He has been outspoken in their interests as he sees them, just as he was outspoken in his critical comments on his old party. I admired him for that. I did not have quite the same admiration for his speech tonight. If he will forgive me for saying so, it was long on expressions of concern but short on analytical thinking and description. I do not intend to fall back on anodyne remedies, but, as I listened to the 30-seconds worth of remedies that the hon. Gentleman offered, I thought that his own adjective for them was apt.

The hon. Gentleman has talked in general terms and has not gone into detail, except about one or two areas of his constituency. I have more or less torn up my notes, and I shall take up the hon. Gentleman's argument by talking about economic policy in general.

The hon. Gentleman suggested the Britain is currently importing more manufactured goods than it is exporting. As the Prime Minister made clear at Question Time on 2 December, we must study the figures carefully. The monthly figures of imports include cost, insurance and freight, and exports are given as free on board. Cost, insurance and freight is, to quite a large extent, a credit to Britain in the invisibles that we earn. The balance of payments figures show both imports and exports as free on board and relate directly to manufactured goods. Against that background, we find that for the first nine months of the year there was a surplus on manufactured goods. It is important to make it clear that a great deal of what the hon. Gentleman was quoting about import figures comes in under invisibles.

The second point that the hon. Gentleman raised related to service industries. I am sure that he did not mean to exaggerate, but it is important that, in his constituents' interests, the point is clarified. I assure him that I recognise the importance of manufacturing to his area of west London and to the country as a whole. We should not overlook the increasing importance of the service industries, not just in our advanced economy but in his constituency. I am sure that he did not mean that service industries employ only a fraction of the present work force.

I shall look briefly at the past, because I have heard the hon. Gentleman's indictment of past Government policies which led to the present position. He said that they go back a long way and that there is no quick solution. He was talking about prescriptions which involve Governments whom he appeared to support for many years. I recognise that he was one of the Labour Government's strongest critics.

The background is important in relation to the redundancies and closures that are taking place in the hon. Gentleman's constituency. I have been through the list of redundancies and closures, and time after time the factors quoted are reduced demand or world-wide shortage of orders. We see in Hayes and Harlington and elsewhere the impact of the world-wide recession and the kind of factors which have led to Great Britain's uncompetitiveness and higher costs over many years. One of the most important factors is inflation. We were so often paying ourselves more than we were earning that our unit labour costs rose much faster than those of other countries. There was the impact also of higher industrial costs and higher interest rates on average in this country compared with overseas.

I want to start by looking at today's overall economic position, because we are making considerable progress with the factors that led to the problems faced by so many of the manufacturing industries that the hon. Gentleman mentioned. Inflation was reduced to 6·8 per cent. in October. The importance of that is that Great Britain is now below the average of the OECD countries, whereas under the Labour Government Great Britain was consistently at the top of the inflation league.

The hon. Gentleman said that inflation was the only favourable point to which we could look. That is not so, because interest rates have come down substantially compared with a year ago; productivity is improving; output per head in manufacturing industry is now 12 per cent. higher than at the end of 1980 and 6 per cent. higher than the average for 1979; and unit wage and salary costs in manufacturing rose by only 5·5 per cent. during the year to the second quarter of 1982—a rate that compares favourably with the United States of America and France. Company profitability has improved from the low levels experienced during the first quarter of 1981. Further improvements can be expected as a result of the considerable effects of recent Government policy in helping with industrial costs. It is important to point out that with the measures taken in the past six months on interest rates, the reductions in the national insurance surcharge, the recent announcements about standstills in gas and electricity prices and in a number of other ways, a substantial change has taken place in industries' costs.

I recognise that it will take a considerable time to reverse many years of declining competitiveness. We have still a long way to go. As the hon. Gentleman said, there is no quick solution. I accept that there is no quick and easy way out of the world recession.

I recognise the problems of factory closures in west London where employment in the manufacturing sector forms a higher proportion of employment than in Greater London generally. In the current recession companies are ensuring their long-term viability and competitiveness by rationalising their productive capacity. Many firms in Hayes are doing just that. It means severe and difficult short-term decisions, but companies need to adjust rapidly to world economic changes. Hayes is fortunate to be close to centres such as Uxbridge and Heathrow where employment opportunities in the office and service sectors have grown in recent years. I hope that the hon. Gentleman will not disparage the impact that those sectors can have.

The service sector in west London is still relatively buoyant and in the longer-term should compensate for the decline in manufacturing in the area. The construction of Heathrow terminal 4 has given a boost to local employment. It is expected to provide 3,000 to 6,000 jobs by 1985. In addition, Trust Securities Limited is to develop a science park and leisure facility at Stockley Park which could create up to 5,500 jobs. With the changing industrial structure and the introduction of new technologies, science parks will play an important part in economic growth. Leisure facilities are also developing. The developers at Stockley Park are awaiting the outcome of a derelict land clearance application, which is a matter for my right hon. Friend the Secretary of State for the Environment. After my earlier conversation with the hon. Gentleman I checked the position. The application is receiving urgent consideration.

In spite of the recession, unemployment in Hayes compares favourably with that in other parts of London. Residential-based male unemployment was only 7·9 per cent. in October in Hayes compared with 12·4 per cent. in Greater London as a whole and 20 per cent., for example, in more disadvantaged areas, such as Brixton. The figures are higher in other parts of the country.

I take it that the hon. Gentleman accepts the importance of regional policy in concentrating aid on the areas of greatest need. Hayes has problems but no one could say that it was an area of greatest need. In March 1981 the hon. Gentleman stated:
"Regional policies, properly directed and applied, are a vital Government responsibility, but each Government in turn have treated London as a milch cow for every other region."—[Official Report, 13 March 1981, Vol. 1000, c. 1170.]
I have looked in vain to see what SDP policy is.

Let us consider what steps the Government have taken to assist industry from which west London might benefit, apart from the general economic policies that I have mentioned. We should recognise their applicability to areas such as Hayes. The first is the suspension of industrial development certificates which legitimately caused great anxiety in areas where natural development might have taken place but for the certificates. Almost a year ago—4 December 1981—I announced the suspension of IDCs and that came into effect on 9 January. Any company contemplating any size of investment in a non-assisted area need no longer seek permission from the Government.

I pressed for that and am grateful to the Minister for taking action.

I was glad to do so.

I also wish to draw attention to industrial innovation support. The hon. Gentleman has in the past talked of the importance of the new technologies. Perhaps because of concentrating overmuch on regional development grants, all parts of the United Kingdom ignore the fact that much support for innovation is available from my Department. It takes the form of aid under section 8 of the Industrial Development Act to assist with new development in the national interest that would not otherwise take place.

Since May 1979, nine projects have received assistance totalling £32,500 on project costs of £125,000 in the Hayes area.

With regard to support for innovation and the microprocessor application project, the Government have committed £140 million in the current year. That is double what it was in real terms when we took office. Several firms in Hayes have already taken advantage of that assistance. I am sure that the hon. Gentleman would agree that nothing like enough has been done, and I hope that he will continue to publicise the existence of the schemes.

I shall now deal with employment schemes. The hon. Gentleman referred to those of his constituents who are unemployed. I appreciate his worry about them. I am aware of the redundancies that have taken place in the past year or so in the Hayes area and the effect they have had. Nevertheless, the area benefits from various employment schemes under which support or training is available. They include the temporary short-time working compensation scheme, from which 265 people have benefited since the beginning of 1981. In addition, the following training places are available in the area. There are 672 places on the youth opportunities programme, of which about 390 have been taken. In the community programme for over 18-year-olds, which replaced the community enterprise programme, there are 250 places. Under the training opportunities programme there are 87 places and, as the hon. Gentleman will know, the skillcentre at Perivale has 305 places and that at Twickenham has 389. These measures should ensure that the work force is equipped to take full advantage of the opportunities when the upturn comes.

I agree with the hon. Gentleman about the impact of rates on local businesses. He will know that the Conservative administration in Hayes has made strenuous efforts to keep the rates down. I am sure that he would also agree that the policies currently being pursued by the Greater London Council are hostile and inimical to many businesses. It is always important to stress that ever-increasing rates drive businesses away to other areas.

I have looked into matters with regard to Callard and Bowser. It is a complicated matter. The hon. Gentleman will know that details of individual applications for regional selective assistance are commercially confidential, so I cannot go into full details. However, other factors were at work. The hon. Gentleman will know that the previous company was making losses and that there were problems about the premises being inefficient and ageing. The new company's decision to concentrate in South Wales was not simply due to Government incentives; other factors were involved.

I did not intend to make any criticism of the management of Callard and Bowser. Having had discussions with the management, I fully realise the reasons for its decision to leave Hayes. I merely mentioned it as an example of a firm being driven out of the area by factors such as the high rates that many companies in my constituency have to endure.

I understand that point. The Conservative council is doing all that it can to help. I am worried lest it should appear that Government selective financial assistance is simply encouraging jobs away from the hon. Gentleman's area to others. I assure him that supported projects must demonstrate that they benefit both national and regional economies, not just shuffle jobs round the country. The effect of an award of regional assistance on employment elsewhere is taken into account when determining whether a company should receive a grant.

I do not want to mince words. I accept the hon. Gentleman's criticism of the Labour Party, but what 1 find extraordinary, both in his speech and in all that I have looked at in "Back to Work"—the SDP's policy document—is that they are full of flowery phrases and expressions of concern, but devoid of policies that add up. The talk is of selective reflation. Any form of reflation involves having to choose how to reflate. Selective reflation is, therefore, just a camouflage for saying "Reflation" but the SDP does not want to face the realities of reflation, because it knows what they are. One of those consequences, as has often been acknowledged by some Social Democratic Party spokesmen, is higher interest rates. It is precisely high interest rates that many companies now find inhibit expansion and add to costs.

Equally, the SDP's policy depends on an incomes policy, but it is not spelt out because it knows that it is unworkable. The hon. Gentleman talked of small business policy. I have been through the list and found that all these policies could have been adopted by the Labour Government. They are simply developments of what we are currently doing. I hope that the hon. Gentleman will agree that the Conservative Government have their heart in and have acted upon small business policy. His new-found party—the SDP—is simply trying to jump on the bandwagon to see what Conservative clothes it can steal.

That argument can apply in reverse in other areas. For example—I make no complaint of this—the Conservative Party is at present advancing a programme of trade union reform that is simply—

The Question having been proposed after 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 fifteen minutes to Twelve o'clock.