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New Towns (North-East)

Volume 79: debated on Friday 17 May 1985

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

On a point of order, Mr. Deputy Speaker. Is there any provision by which we may ensure that a Bill which has been objected to, which has been put back into the list —it is due to appear next on 5 July—and which has gone through its stages and been passed by another place, can be dealt with? I refer to the measure in the name of the hon. Member for Hornchurch (Mr. Squire), the Local Government (Choice of Electoral Systems) Bill, which has been passed by the other place. Is there any way in which that can be given time for debate in this House, irrespective of its present position in the list?

Further to that point of order, Mr. Deputy Speaker. When you give a ruling on the point that the hon. Member for Southwark and Bermondsey (Mr. Hughes) has raised, will you also consider the fact that among the Bills which are to be taken on 5 July is the Minimum Wages Etc. Bill, a measure which affects eight million people in this country. The subject of the low wages of those people should receive equal attention by you, Sir.

It is difficult for me to answer those points off the cuff. Both hon. Gentlemen must use their ingenuity within the rules of the House, and consider what opportunities may be available to them.

2.35 pm

I was fortunate enough to be successful in the draw for the Adjournment debate, and it was well worth waiting until the end of the week's business to discuss a subject that is of importance to so many people in the north-east. Incidentally, I have had the privilege of both starting and ending the business of the House today.

I have a personal interest in the subject. I have lived in one new town—Peterlee—for more than 22 years, and I have represented Washington new town in the European Parliament and, since 1983, in this House.

I shall concentrate on Washington, but much of what I say also affects Peterlee and Aycliffe. It is regrettable that, because of urgent constituency business, my hon. Friends the Members for Easington (Mr. Dormand) and for Bishop Auckland (Mr. Foster) cannot be here. They are both as anxious as I am to hear the Minister's answers to my questions.

It is impossible to separate the three new towns because the Secretary of State for the Environment linked them together when, in 1984, he issued a consultative document about their future. I shall have something to say about the outcome of the consultations of 1984 and especially about how long it took the Government to reach a decision and the consequent effect upon the morale of the diligent and hardworking staffs.

The three new towns are in the northern region, where there is 19 per cent. unemployment. This is not a recent phenomenon. The unemployment rate has been well above the national average for decades. However, the north has suffered particularly badly as a consequence of the present Government's monetarist policies, and the unemployment level is now greater than that of any other region. That is one record of which we are not proud.

In common with many of my colleagues, I believe that our only real hope lies in the introduction of a system of decentralisation giving power to a regional authority. That would give us more control over our own destiny.

The Parliamentary Under-Secretary of State look part in a conference at Aycliffe last Friday on the relationship between regional policies and new towns. He recognised the magnitude of the problem. He said:
"here in the North East, I am sure that the overwhelming interest in regional policy is the creation of jobs to help with the problems which this region faces."
However, the hon. Gentleman also said:
"The government's philosophy is of course based on the view that a properly regulated market is the best way of dealing with questions about the allocation of resources."
That topic cannot be fully debated in a short time. However, the concept of a centrally regulated market has not solved any of our problems in the north-east. The opposite is the case.

Washington is within the borough of Sunderland and is consequently part of the county of Tyne and Wear. The unemployment level in the borough is 21 per cent., and in Tyne and Wear 20 per cent. Each area is surrounded by others with similar or higher levels of unemployment. The level in Newcastle is 20 per cent., on South Tyneside 21 per cent., and in Cleveland county 22 per cent., according to the Government's massaged figures. A massive problem clearly faces the unemployed living in the new towns, and it is also clear that the problem of the individual and his family cannot be solved by moving to an adjacent area.

There are even more dramatic data which illustrate a problem which should be of great concern to the Government, given the mass of literature available on the health and social consequences of unemployment. Social breakdowns, especially among the young, are something which we do not wish to experience in the north-east, but the risk is high. When one studies the data, it would be foolish not to recognise that, in the borough of Sunderland, nearly 7,000 people have been out of work for over two years. Many of them are young people. The latest figures from the careers office show that 4,500 young people are chasing 64 jobs. There are 1,947 unemployed, and 2,562 are on special schemes. In addition, 3,000 more youngsters will leave school in May and July of this year.

Regrettably, the jobs that have been lost over the years have been in industries which will be unable to respond when better times materialise. Pits that have been closed will not and cannot be reopened. Many jobs that have been lost in steelworks, shipyards and heavy engineering are lost for ever, yet they were once the basic industries of the north-east. Jobs have also been lost because of modern technology, which has reduced the demand for labour. In addition, markets have been lost to competitors in other countries. Those jobs should have been protected by the Government.

We desperately need new jobs to replace those that have been lost. They are likely to be in new types and forms of production. In both the short and long term we need job hunting agencies which can attract jobs to the northern region. In a highly competitive situation, the development corporations have had some success in attracting new companies to the north-east and over the past decade we have also been fortunate in having dynamic and progressive local authorities.

I must make special mention of the Tyne and Wear county council, because the Government's chief executioner has his axe raised above his head, ready to chop off the heads of the job hunters of Tyne and Wear and the development corporations. The Secretary of State for the Environment is busy digging graves in which to bury the bodies. Anyone can do that, but it does not mean that there will be greater order when successful job hunters have been destroyed. As we well know, it can mean greater disorder.

I have said many times in the Chamber—but it bears repeating — that three agencies were involved in attracting the Nissan project: Tyne and Wear county council, Sunderland borough council and Washington development corporation. When the project reaches phase II, it will create almost 3,000 jobs direct, and an equal number of jobs may be created in companies producing parts and in other companies providing services as a consequence of that development. Those jobs will prove vital to the area and we hope that other companies will be attracted to the north-east, thus creating even more jobs. Yet within a very short time of this success, the Government are destroying two of the three organisations. The logic behind these decisions has never been explained —certainly not to my satisfaction—and I hope that the Under-Secretary of State will reflect and comment on that contradiction.

Washington must not simply be seen as the town that attracted Nissan. The job hunters of the Washington development corporation have generated in excess of 20,000 new jobs since it came into operation. There are more than 300 companies in Washington, and over half of them originated outside the immediate locality. Indeed, 10 per cent. of the companies have been attracted from overseas—from, among others, Holland, Denmark, the United States, Canada and Norway. Other companies from other countries are already in the pipeline. There are many live inquiries from overseas companies, in addition to about 150 from the United Kingdom. I hope that those inquiries will be turned into jobs. However, the Secretary of State's decision certainly does not help the situation.

During the passage of the Local Government Bill the proposal to abolish the Tyne and Wear council was debated, and I asked the Minister several times to consider the unsatisfactory position with regard to the 2p rate. I refer to the power contained in clause 137, which enables local councils to protect existing jobs and to create an environment in which new jobs can be attracted. If the Tyne and Wear council is abolished, that 2p rate will disappear, together with some millions of pounds. That is an example of political vindictiveness, because the Conservative-controlled county councils will still have a 2p rate. After all, I do not think that the Conservative party's manifesto seeks to abolish the shire counties.

The Department of the Environment issued a consultative document on 8 May 1984 containing three major proposals: that the three development corporations should be wound up at the end of December 1985; that Washington's housing stock should be transferred to Sunderland borough council; and that the job promotion aspect should be transferred to English Industrial Estates. Today I shall concentrate on the last point.

The English Industrial Estates option was unanimously rejected, and that was emphasised at a meeting with the Secretary of State in London in July 1984. At the meeting, the chairmen of the boards, neither of them Labour supporters unless they have had recent conversions, members and officers of the appropriate district councils and three Members of Parliament were united in their opinion that, because of their proven record in job hunting, the development corporations must be allowed to continue with that aspect of their work for up to five years and then the situation reviewed.

I think the Under-Secretary of State will agree that only if the case were cast-iron could so many people from different areas and of different political persuasions be so united in purpose. It underlines the strength of opposition to the Department of the Environment's proposals. However, we cannot understand why it took nine months for the Secretary of State to make a decision following that meeting. I hope that the Under-Secretary of State will say a few words about that today.

I cannot speak for everyone who was at the meeting in London because they have not met together recently, but I can say that many are disturbed that, despite the evidence, the Secretary of State granted the development corporations an extension of only two and a quarter years. During the consultation period staff morale reached an extremely low level, and the short extension granted has not helped much. In fact, one senior official told me this week that the Government had come up with the worst possible option.

My hon. Friend the Member for Easington has already said in the Chamber that circumstances have changed for the worse. The threat to collieries in his and my constituency makes the case for the retention of the development corporations even stronger. The proposed closure of Horden colliery in my hon. Friend's constituency has recently been announced, and my hon. Friend believes that the matter should be reviewed urgently as a consequence of the threatened closures in the Durham coalfield.

In the same conference that I referred to earlier the Under-Secretary of State also said:
"They have all been provided with the means to achieve growth. In some cases it makes sense to retain, perhaps on a reduced basis, the teams which have been built up in order to stimulate growth."
He also said:
"we must make sure that we obtain all the benefits that we can from the investment of resources and skills which has gone with them so far."
Exactly. The Under-Secretary of State clearly recognises that there is a problem in the north-east, that the staffs of the development corporations have, over time, developed the resources and skills to do something about the problem and that it also makes sense to retain the teams.

Why, then, are those teams being so easily broken up? Why has the Department of the Environment set staffing limits for each corporation? Why has the Secretary of State not allowed them at best to determine their own staffing needs, or allowed them a budget enabling them to determine the number of staff that they think most appropriate?

Why has the Secretary of State stopped the building of advance factories? Does that not put the development corporations at a disadvantage vis-a-vis English Industrial Estates because it can continue to do so? Does the Secretary of State not agree that in an area of high unemployment it is essential to have the factories ready and available for the market, otherwise there is a strong possibility that entrepreneurs will look elsewhere?

Being cynical, has not the Secretary of State simply allowed time for public assets to be sold to the private sector? Staff are simply being employed to assist in the privatisation process.

On 24 December 1984 that belief was echoed in an editorial in The Times, which is certainly not a Labour-supporting newspaper. It said:
"The English New Towns deserve a better fate than the precipitate asset-stripping that now seems in prospect for them."
Many of us suspect that because of the speed with which the assets are to be sold there is a danger that they will go too cheaply. With no set price, they will go for any reasonable offer.

I stress that I speak for my hon. Friends the Members for Easington and for Bishop Auckland as well as myself when I say that the development corporations have not yet finished their job, that proper plans should have been made for them to continue their programmes, that assets that belong to the public sector should have been left with it and that the Government are hell-bent on a policy of privatisation and selling off the development corporation is simply part and parcel of it. In view of the short period of extension, why has the Secretary of State not come up with an alternative? May I assume that he will leave the decision to the local authorities and the Labour movement—in the north-east?

Once again I have support for my case in the editorial to which I referred earlier. It said:
"The corporations of the New Towns of the North-East form a component of regional aid, seeking employment for and promoting Aycliffe, Washington and Peterlee: this is work that could be missed".
Now that the Secretary of State has announced his decision, I am sure that the editorial writer on The Times will change that to "will be missed".

Why did the Under-Secretary of State for Trade and Industry come to a different conclusion about Scottish new towns, when in a press release he said:
"It remains the Government's view that the new towns should continue to maintain their important contribution to industrial growth and increased employment opportunities and that none of the development corporations should be wound up before the end of the 1980s."
The unemployment levels in Scotland and the north-east are similar. Social deprivation and economic problems are similar. I hope that the Under-Secretary agrees that there is a logic in coming to exactly the same conclusions about the north-east new towns. I hope that this afternoon he will provide some information which I can take back to the north-east to give the people there more hope.

2.51 pm

The hon. Member for Houghton and Washington (Mr. Boyes) has spoken with feeling about the north-east, and particularly about unemployment. As he said, I attended with him the new towns conference last week when we debated regional unemployment and the role of the new towns. I am pleased that he had time to write down some of the perceptive comments so that he could quote them this afternoon.

The hon. Gentleman talked about Scottish new towns and drew a parallel. He said that because they had a longer life span, so should English new towns. Scottish new towns were established some time after the English new towns. For that reason alone, one would expect Scottish new town corporations to be wound up later. It does not follow that if one decides that the Scottish new town corporations should remain until the end of the century, the same conclusion should be applied to English new town corporations. The English corporations have made more progress in achieving their objectives, because they have been established longer.

The hon. Gentleman said that he was looking forward to the new jobs that will have to be created in the north-east. Some of his colleagues look backwards instead of forwards and want the declining industries in the north-east to be exhumed. The idea that we can restore those industries that traditionally have provided jobs is misguided. I welcome what the hon. Gentleman said about trying to attract jobs in the new and expanding industries such as the service industry to try to tackle the unemployment problem in the north-east.

My right hon. Friend the Secretary of State for the Environment announced on 21 March that the lives of the development corporations for Aycliffe, Peterlee and Washington were to be extended to 31 March 1988. Before we reached this point, the hon. Member for Easington (Mr. Dormand) had raised the matter twice on the Adjournment. My Department had issued a consultation paper asking for comment on whether the purposes for which the development corporations has been set up had been substantially achieved, as required under the relevant legislation. The response to these consultations showed clearly the high opinion held locally of the work done by these bodies. We therefore concluded that there should be some extension. The question was: how much and for what purpose?

One could embark upon a semantic and fruitless discussion about exactly what is meant by the words "substantially achieved" which appear in the Act. However, Washington and the other new towns in the north-east could be said to have "substantially achieved" their objectives. My right hon. Friend the Secretary of State recently visited Washington and opened the last major stretch of highway to be constructed by the development corporation. My noble Friend Lord Bellwin, when he was Minister for Local Government, visited the area at the end of the consultation period, and I went there some time ago to open a new village centre.

All the Ministers who visited were impressed by what the development corporation had achieved in the last 20 years. By any standards, Washington is a modern, well-served community with all the facilities that one would expect for a young and active population. It has a balance between modern housing and an enviable commercial centre, shopping facilities and a wide range of industrial employment. Its record in attracting new jobs is a proven one, which has not just benefited the residents of the town, but attracted a marked degree of commuting from the adjacent conurbations.

There was thus no doubt that the development corporations had done much of what was needed. 'The question was: was it enough? Whilst I very much regret the time it took to reach a decision, the Government's deliberations had to balance these factors that I have mentioned against the support and justification for an extension of the lives of the corporations, the public expenditure implications, our regional policy aims and the claims of other regions. These are not easy questions.

Nevertheless, despite the widespread suspicion of our motives in the region, we decided that it would not be right to wind up the corporations now. We were impressed by the degree of support which they command in the region as job creation agencies. The role of Washington, in particular, as part of the team which successfully negotiated with Nissan was worthy of praise. I should perhaps in fairness add that these arguments applied with equal force to the development corporations of Aycliffe and Peterlee. The support for their continuation for the industrial promotion purpose was no less strong, nor their record any less impressive.

It is worth reminding the hon. Gentleman that his right hon. Friend the then Secretry of State for the Environment in 1978 decided that the Washington development corporation should be wound up on 31 December 1982. The hon. Gentleman's rather emotive remarks about my right hon. Friend preparing the grave and becoming the executioner are a little out of place. Had the Labour party had its way, the grass would have been growing extremely long on the grave of the development corporation, whereas its existence is now guaranteed until 1988.

The hon. Gentleman referred to the all-party deputation which we met in London last year. The point was put forcibly that now was not the right time to wind up the corporations. We have therfore fully conceded that point. That seemed to be the prime concern of the delegation. Now the hon. Member is debating how long this extension should be. The Government's motivation in granting an extension was not only to ensure the continuation of the corporations' job creation role for a time, but to ensure a smooth transition to successor arrangements so as to maintain that momentum. If all parties work to that end, as I am sure they will, whether the extension should be two and a half years or five years is of less significance. If we get the successor arrangements right, I trust the hon. Member will feel more relaxed about the length of the extension.

The hon. Gentleman asked a number of specific questions which I shall try to deal with in the time available. The first was about the level of expenditure which will be available to the corporation to perform the task that is needed. I hope that the level of expenditure will be commensurate with the specific task that we have identified—the industrial job creation role. We believe these levels to be reasonable, but, if they are likely to be exceeded, we have already undertaken—and I repeat the commitment—to consider on their merits any further proposals put to us.

The hon. Gentleman is specifically concerned about advance factory provision. I cannot say today what provision will be agreed. That has to be a matter for discussion with my Department in the light of any special case put to us by the corporations. We also have to ensure that existing empty stock is utilised first. That must be sensible housekeeping. But, having said that, any special case will be considered on its merits by my right hon. Friend, and we shall be in touch with the development corporations or hon. Members if they feel that a special case needs to be made.

The hon. Gentleman described as "asset stripping" the disposal of the assets by the development corporations for the best consideration reasonably obtainable. We have repeatedly said that there will be no forced sales and no sales contrary to the best professional advice. There is no question of selling off the assets cheaply or prematurely. In any event, the sales programme is not just about raising money, valuable to the nation though that is. It is to try to normalise the position in new towns generally, to phase out the very dominant public sector landlord position existing in the new towns, which does not exist in our other towns, and also to try to encourage a thriving private sector.

Finally, there is the question of successor arrangements. My right hon. Friend's announcement asked the corporations to prepare satisfactory arrangements for the period after March 1988. I am sure that their efforts in that regard will be no less conscientious than those that they have put so visibly into the development of their towns. It would be premature at this stage to speculate what will emerge. The Government are viewing, with great interest, the initiative by Sir Ralph Carr-Ellison to set up a regional industrial executive in the north-east, and we wish him every success.

Whatever successor arrangements emerge, one thing is crucial, and there should be no doubt about it. There can be no doubt in anyone's mind that the recent uncertainty over the lives of the development corporations must not be repeated. We must put to positive use the three years that we have in which to make arrangements.

The hon. Gentleman rightly mentioned the staffing implications of the extension. I have heard from the National and Local Government Officers Association, which has asked for a meeting. I have agreed in principle and asked for details of its concerns before the meeting. The points made by the hon. Gentleman are a valuable contribution.

Anyone who works for a new town development corporation will know that the object of the corporation is, in a sense, to work itself out of a job. Under both parties the corporation has always had a finite life. There is no job security in working for a new town, and the staff are aware of that. However, it is not easy to reach decisions when considering staff redundancies. We must avoid prolonged uncertainty. The key staff must know whether they have a job in the extension period if they are not to be lost. I understand the anxieties expressed by NALGO and I shall explore them in more detail when its representatives come to see me.

The number of staff remaining at the corporation after 1986 must be related to the work load. The hon. Gentleman accused us of having imposed ceilings on staff numbers. There is nothing new in the Department indicating the staffing levels that it thinks appropriate. We have made it clear that, within the limits of the finance available, we will be happy to discuss with the corporation the staffing levels that it would want. We have asked the corporation to concentrate on the development of industry and commerce and the creation of jobs. That represents a significant reduction from the present task and we expect commensurate staff reductions. I do not underestimate the difficulties facing management and unions, but I am sure that, with good will on both sides, they can be overcome.

There are, I think, slightly fewer difficulties at Aycliffe and Peterlee. They have the advantage of having transferred their housing some time ago. They have successfully pursued a course of privatisation of their functions.

We have had a useful debate, although I am conscious that I may not have wholly satisfied the rather high bid from the hon. Gentleman. He criticised my right hon. Friends for not extending the north-east new towns for long enough. Conservative Members have criticised us for not winding up the development corporations soon enough. So perhaps at the end of the day the Government have got it right. I shall bear in mind his comments in our further negotiations both with the corporation and with the trade unions.

Question put and agreed to.

Adjourned accordingly at three minutes past Three o'clock.