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Unemployment (Isle Of Wight)

Volume 82: debated on Wednesday 10 July 1985

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

1.27 am

I feel that in some ways I could have continued the Third Reading of the Finance Bill, because, although I have crossed swords with the hon. Member for Workington (Mr. Campbell-Savours) on many occasions, I agreed entirely with the remarks that he made. I intend to make somewhat similar remarks.

I want to talk about the problems of the continuing rise in unemployment on the Isle of Wight. I welcome the fact that the Under-Secretary of State for Employment, the hon. Member for Eltham (Mr. Bottomley), who has suffered as I have until this late hour, is here to reply because, as is well known, he and his wife, the hon. Member for Surrey, South-West (Mrs. Bottomley), know my constituency and its problems well.

As the Minister will be aware, the Isle of Wight has consistently sought assisted area status. The local authorities helped by local businesses, made what they thought was an especially strong case only last autumn.

As predicted then, unemployment has continued to rise and it reached a peak of 17·3 per cent. in February this year. Since 1980, over 3,000 jobs have been lost in manufacturing in my constituency, and at the same time the tourist trade upon which we rely has fallen by about 25 per cent.

On the industrial front, the long-term trends have shown a continuing decline. More men and women were out of work in June this year than in 1984. That is when we are approaching the height of the season, when the rate decreases for about three months. It is currently — I know that this will be pushed back at me — running at 12·1 per cent. which is below the national average but still much higher than the average for the south-east as a whole. We have the highest unemployment in the south of England.

Last winter, male unemployment in Ryde reached 26·7 per cent. and in Shanklin it was no less than 32·4 per cent. Those figures are reminiscent of Northern Ireland and no one should be complacent about them. Worse is about to descend upon us, because on or about 16 August 160 more jobs will go at Fibre Resin Developments in East Cowes when the firm closes its doors, despite a full order book, mostly from television manufacturers and the motor industry. I quote from the Portsmouth Evening News of 3 July last:
"160 lose jobs as buy-out collapses
Hopes of a jobs lifeline for a doomed Isle of Wight factory have been dashed.
The management of Fibre Resin Developments, of East Cowes, has confirmed that hopes of buying-out the plant have vanished and it will close next month with the loss of 160 jobs.
While Fibre Resin had a healthy order book its parent company, the Unitech Group of Reading, claimed fierce competition ruled out profit in the production of moulded components, particularly for televisions."
I understand there is only one other manufacturer of these products in the United Kingdom. The article goes on:
"Fibre Resin Managing Director, Mr. John Hand, and colleagues originally hoped they could find a way of turning the work into profits but now say there is only the possibility of a venture that would provide work for 'a few' employees.
They ruled out the possibility of a management takeover for the same reasons that the parent company decided to pull out of the Island — high transport costs and less demand for some of the company's TV products."
A company which is not Isle of Wight-based but which is a subsidiary of a larger company, either American or United Kingdom, and which operates on an offshore island, when it retracts, looks to see what plant it has in diverse areas of the country, particularly an offshore island, and we always suffer. To bring component parts or basic materials to the island and take them back again to the mainland costs a great deal of money. It costs something like £100 for each vehicle that comes across from the mainland.

To add insult to injury, the Desmond Norman aeroplane company is moving its base from Sandown airport to Cardiff with the aid of loans totalling £2·3 million, including £500,000, subscribed in ordinary preference shares, from the Welsh Development Agency. I note from last Friday's Financial Times that the agency is claiming that it has built a portfolio of around £27 million and by the end of this year it expects this will have risen to between £37 million and £40 million, invested in industrial concerns of one sort or another. Desmond Norman will, in the process, increase his current work force to about 134.

I am sure the Minister must agree with me when I say that we could have done with such a boost. We cannot offer the Desmond Norman's of this world attractive terms of that dimension. We wish him well. We are sorry to lose him, but we feel bitter about his departure, particularly as the skills are undoubtedly available to him on the Isle of Wight. The Firecracker, which we all know was one of the competitors for the replacement of the jet Provost, was designed and built on the Isle of Wight. Desmond Norman is well known as the designer, with John Britten, of the original Islander aircraft, the first 240 of which were built mostly by the British Hovercraft Corporation, but built on the island. On that self-same airfield, Mr. Richard Noble, the holder of the world land speed record, is also constructing a small plane and the county council, along with the Development Commission, have given him financial backing. But will it be enough? The aid that we have been able to provide pales into insignificance compared with the Welsh package for Desmond Norman. One can anticipate what Mr. Noble must be thinking as he sees his competitor on the other side of the airfield picking up such a large sum. It makes nonsense of the current assisted area designation.

As a member of the Select Committee on Transport, I know that marine pilotage is also under review. Some 28 of such pilots live on the islands, and some of their jobs could be in jeopardy. I could go on. The future, despite our efforts, which I believe to be praiseworthy — the Minister may confirm that, and his colleague, the Minister for Information Technology, who was on the island only last Monday thought so — is not bright. We have tried our best through both local government and local businesses to improve the position, but nevertheless, we seem to be losing.

I have only to finish by mentioning Westland, and its subsidiary, the British Hovercraft Corporation, to give an illustration of another firm that is causing us some concern. That company is our biggest industrial employer, and, as we know, is going through a difficult patch. I shall not say more, because the subject was duly aired only last Monday, but the importance of BHC to the economy of the Isle of Wight cannot be over-emphasised.

We long ago came to the conclusion that tourism and leisure are our natural growth areas, but to make this a reality, we desperately need a carrot to offer the specialist investors. Small grants from the English Tourist Board to hoteliers and others are greatly to be welcomed, but the seaside resorts of Ventnor, Shanklin, Sandown, Ryde and the sailing centre of Cowes need much more than that.

I have to return to the Principality, because when we look at what is given to places such as Rhyl and Cardiff through the EEC, we are made envious. No completely new hotel has been built in my constituency since the war. While we now have some excellent leisure centres, one or more must become of national importance if our summer season is to be substantially extended.

Cowes was again this year the home of the prestigious Admirals cup racing, but it particularly needs to upgrade its shore facilities. Representations on this subject have been made to me by senior officials in yachting, and I know that it is true. We must try to get developers with experience in leisure to take an interest in the island and invest there, but to do so we have to be able to offer them some encouragement. They will not come unless there is a carrot. Last year, our rate support grant settlement was the worst of any in the country, so local Government has even less room for manoeuvre than before.

Some will say that I have said all this before and made little progress, so why do I go on about it? The answer is, "What else can I do?" Politics is the art of the possible, and it is perhaps true that if one says the same thing often enough and long enough—I have learnt that in politics one has to go on saying the same thing over and again, however boring it may be—it will eventually attract the attention of somebody who matters. I am putting down another marker on behalf of my constituents. I hope that the Under-Secretary will do all that he can to persuade his colleague of the urgency of cur case, and the need for a more sympathetic approach to our economic well-being.

1.38 am

I welcome the opportunity to listen to the hon. Member for Isle of Wight (Mr. Ross). I take seriously his final remarks about the need for persistence, and about politics as a process. If any Minister responded to the case that he outlined with a pat answer, that would do politics a disservice. I am talking not about party politics, but about the natural process of politics, which is that matters are raised in the House, through deputations and to Ministers when they visit constituencies such as the Isle of Wight. It helps to develop Government policy and approach, not only to legislation, but to other things that the Government can do, such as transferring money from one set of pockets to another. The hon. Gentleman referred to some of the incentives in Wales. Like the hon. Member, I would have liked this debate to take place earlier in the evening. I do not agree with him that the remarks of the hon. Member for Workington (Mr. Campbell-Savours) were that germane to the previous debate or to this one.

The hon. Gentleman mentioned the Admirals Cup. Perhaps it is a good omen for Britain and the Isle of Wight that one of the competing yachts was called Rubber Duck and has been re-named Phoenix. The House will recognise the efforts the hon. Gentleman has put into his constituency. Perhaps what is needed for the Isle of Wight is a resurgence of what was achieved in the early 1970s in a slightly different economic climate, when the manufacturing base expanded. It expanded because small and medium-sized firms came to the Isle of Wight. They came there for the sort of reasons outlined in the county council's case, which it put forward last year for assisted area status. It talked about the kind of people on the Isle of Wight and the kinds of skills they have. I should like to refer the House to the biography of Uffa Fox. During his early life he changed from one job to another, and that shows the sort of adaptability that is characteristic of the Isle of Wight.

In these summer months of July and August, it is important not only to talk about the unemployment in the area, but to talk about the good sides of the island. The hon. Gentleman courteously referred to the links that my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley) and I have with his constituency. The numbers of people who read the County Press and the other newspaper in the Isle of Wight grow enormously during July and August. I hope that the headlines following this debate and other headlines which will appear in the island's newspapers during the weeks when Cowes is full of people who may be able to bring in investment into the island, will be about the adaptability of the work force in the Isle of Wight, about the successes of the Isle of Wight's schools and the kind of environment that makes people very keen to live there if they could find jobs. I hope they do not just talk about the difficulties of transportation and use the word peripherality, which is somewhat new to me. Perhaps we could look at the Isle of Wight as the place it could become, the Silicon Island of Britain. People talk about Silicon Glen and about the high-tech corridors down the M4. There are many products connected with new technology where transport costs become less significant, and where the attractions of a place like the Isle of Wight can get people not only to build their own firms there, but to put into the island some of the manufacturing and development and design processes that are so important to the modern industry of the future.

Employment in the island rests on what used to be called the three legs, but I suppose that there are actually five. The traditional ones are tourism, light industry and agriculture and fishing. To those I would add the two greatest areas of employment, which are public administration and retail distribution. It is worth noting that many of the developments in the area have made it possible for more people to do their shopping on the island. They do not have to go to Portsmouth or Southampton for that purpose. I will not answer the hon. Gentleman in detail on the pattern of unemployment during the year, because it is obvious to anyone who knows the island that it suffers severe unemployment during the winter months, and the reduction to below the national average during the summer is a seasonal trend.

I will pass on to my right hon. Friends in Government some of the points which are more properly directed to them. As one example of politics being not only the art of the possible but the art of making possible what is right, may I say how much I welcomed the response from the Isle of Wight county council to the Government's White Paper last year on changes in regional aid and assistance, gearing much more to job creation, extending aid to include parts of the service sector as well as manufacturing, trying to go for increased selectivity and a review of the assisted area maps. As the hon. Gentleman pointed out, the Isle of Wight has not been successful in getting its application approved in this process. As he and I know, politics is a moving business, and the representations made by the county council are important. Having had the chance of looking at the video film that was shown to my hon. Friend the Minister for Information Technology, I know that the Isle of Wight does manage to demonstrate many of the things that make it attractive not only in a physical sense but in a manufacturing sense. It is for that reason that the island boasts, even with the intended move of the manufacturing of NDN planes to Wales, more aircraft manufacturing businesses than almost the whole of the rest of the country put together. That shows that there are people on the island, most of them who have been there for a long time but some who have come in, who believe that it is a place where they can get their acts together and start developing their own businesses.

I add my weight, for what it is worth, to the efforts of the Isle of Wight tourist board which manages—much of the money being raised on the island — to have a budget larger than the Southern tourist board which covers a far wider area. I know from personal experience how much many of the people involved in the hotel, catering and tourist industry put in to promoting the Isle of Wight. There is much more that they can do, and my right hon. Friend the Minister without Portfolio, whose portfolio, if it does not sound too paradoxical, includes looking at tourism, will be coming forward with plans and proposals and he has been providing a focus for Government efforts, because the development of this side of the service sector is extremely important to the Isle of Wight.

As for the Development Commission, the hon. Gentleman said characteristically that rural development area status for the Isle of Wight had been important. It is also worth recognising that the island can go further. Without straying into the areas of responsibility of the local authorities on the island, I may say that it is worth people thinking whether they are always gearing their decisions towards the promotion of employment and tourism as much as they might. I am not an expert, but I recall an example two years ago of a proposed hotel development in Cowes which, it was said in public though there may have been other reasons, could not go ahead because inadequate car parking spaces had been provided. If much of the hotel accommodation needed in Cowes is tied to yachting, many people may be arriving by boat and wanting to sleep on land, and they will not bring their cars stuck on the fronts of their Admirals Cup yachts.

There were other reasons why that proposal did not meet with everyone's approval.

I am sure that is right. I used that as an example of how people not only can ask the Government to reconsider how they can help but can continue themselves to look for an environment for the promotion of tourism and industry.

I quote from the Isle of Wight's case for assisted area status. It says on page 14:
"Within the broader national policies for encouraging industrial development there is scope at the local level to further these aims. The Isle of Wight County Structure Plan, as approved by the Secretary of State in March 1979, laid particular emphasis on the need to increase employment opportunities. The County Council, in conjunction with the Borough Councils, the Development Commission and CoSIRA, have been vigorously implementing the strategic employment policies through land-use planning, the active promotion and encouragement of industry and the provision of sites and buildings and also by establishing a single centre for advisory services to small firms."
I do not think that anyone would claim that people on the Isle of Wight are not doing the best they can, and I know from my own experience that both in the voluntary sector and at the local authority level people do their best to work together and, while having occasional differences of politics, dedicate themselves to the wellbeing of the Isle of Wight. It is one of the advantages of being a self-contained unit that people actually live and work in the same place rather than the difficulties faced in so many other constituencies where some of those involved live some way away from where they work.

The Development Commission has helped by funding a number of projects on the island, including an imaginative project to bring Souter's boatyard at Cowes back into productive use with a potential to accommodate more than 400 jobs. The commission, with the local authority, is also preparing a rural development programme for the Isle of Wight, which will offer a way to co-ordinate local and Government assistance to the island during the next 10 years. The hon. Gentleman referred to rate support grant. One of the areas in which the Isle of Wight has done better than other areas, has been transport grants. The island has had some of its special needs recognised, which I hope is welcomed there.

I pay tribute to the work done by CoSIRA, which works closely with the island's enterprise agency. During the past 12 months it has helped 21 firms to obtain more than £1 million in loans, and has done much to support community development. On the wider scale of the European social fund, a welcome recent development is granting the island priority status for support for training and employment schemes from 1 January 1986. Now many more types of scheme can receive funding than previously. The Department of Employment has already made contact with the Isle of Wight County Council about that. I hope that the Council and other organisations can make applications to, and benefit from that fund.

I am not saying that sufficient has been achieved, but many of the developments that the Government have been promoting are of assistance in the Isle of Wight and throughout the country. The enterprise allowance scheme helps people who have been on benefit for some time to set up in business. It is a powerful stimulant to the creation of new small businesses, and I recommend anyone who has been on benefit or under notice of redundancy for some time—if a person has been on benefit for 13 weeks, he or she will qualify if he or she can show £1,000 of his or her own, or access to that sum — to apply for that scheme, under which he or she can receive an allowance of £40 a week for a year. Our experience shows that 75 per cent. of businesses set up under the scheme still exist 15 months after they started — that is, after the allowance has run out—and that more than half of them have created jobs, not all full-time jobs, for others. Sixty jobs for every 100 businesses operating after 15 months shows that a great well of enterprise is waiting to be tapped. The enterprise allowance scheme is one way of doing that.

The scheme has been expanded by a further 25 per cent., and the Isle of Wight will share in the extra places being made available. Examples of the scheme from the island include hand-made pottery, windsurfing promotion, the sale of second-hand classical records, a magician, a successful tea room and a hairdresser. I am not suggesting that everyone should compete in those fields, but that shows the range and breadth of ideas being brought forward.

The hon. Gentleman does not need me to talk about the youth training scheme. It is vital that young people, who are important to the Isle of Wight, are not forced to emigrate, but can build up their skills and work experience on the island, and be available to take jobs that become available. YTS provides a rung on the employment ladder. The developing quality training will help them, as will the move towards a two-year YTS. It is pleasing that last year 70 per cent. of those leaving YTS on the island went into jobs. Our experience throughout the country shows that it is a valuable way for people to build up their experience and ability to be employed. The same sort of story cart be told about adult training.

The community programme provides special help to the long-term unemployed. When the House goes into summer recess I shall visit the Isle of Wight to follow up some of the hon. Gentleman's remarks and for my own pleasure and education. I shall do my best to promote some of the ideas to which I have referred when meeting people on the island. I shall do what I can to encourage the advertising of the island, especially during the peak summer months. It seems ridiculous that so many people, when they have the chance, go shooting off abroad for their holidays when the range of pursuits for families on the Isle of Wight is so great and the attractions so well known. There is net immigration to the island of those aged 50 years and over, and if the island is attractive to members of that age group, many of whom are returning to the island after a working life away, it should be attractive to those who have the opportunity of taking a business to it or developing a business while there.

None of this is to deny the possibility that some of the aid that the Government provide to other areas is harming the Isle of Wight. Much of the diversion of public revenues to special assistance in certain areas costs jobs because of the nature of taxation and tends to divert jobs. The hon. Member has rightly drawn attention to an example that may be of benefit to Wales, but may be of harm to the Isle of Wight.

I recognise the points that he made briefly tonight but at greater length two nights ago about the possible impact on the island of developments at Westland. I pay tribute to the staff of BHC for the way in which it has helped to diversify the work that it has managed to achieve and its order book. I hope that the company will prosper and that its example will help others to do the same.

I recognise the importance of what the hon. Gentleman said at the beginning of his speech. I attach importance also to my initial comments. The hon. Gentleman has asked that his arguments be considered properly and I shall do that within Government. I hope that it will be possible in a year's time to have a similar debate so that we can discuss some of the successes as well as some of the problems that remain to be tackled successfully. The Government will do the best that they can on the Isle of Wight and throughout the country to raise the levels of employment and economic activity and to ensure that we represent the people whom we are here to serve in the best way possible.

Question put and agreed to.

Adjourned accordingly at three minutes to Two o' clock.