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Unemployment (Northern Region)

Volume 84: debated on Tuesday 22 October 1985

The text on this page has been created from Hansard archive content, it may contain typographical errors.

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

12.1 am

I wish to draw the attention of the House to the problems of unemployment in the norther region. The economic problems of the region have been the subject of a mass of reports over the years. There have been many grand designs, all ending with some form of declaration about the prospects.

The region has not lacked attention. As the subject of analysis it has been a very tolerant patient. Its past contribution to the wealth of the nation is acknowledged and its present fitness to survive and make the best of its opportunities is undoubted among those who live and work there. The future depends on that confidence being accepted and acted upon through national policies and a new economic strategy to match the competence of the regional leadership and effort.

One of the more interesting reports on the region was commissioned by BBC North East. It was the result of a considerable amount of research in particular areas, including my own, where a third of the male population are out of work. This was followed by a study of Consett and what has happened there since the closure of the steelworks. Those reports conclude that the efforts to regenerate communities devastated by economic disaster were seriously deficient and inadequate.

Two months ago BBC North East published a further report, a study of Cleveland, which said:
"This time we have examined the economic change in Teeside showing how this area has experienced a spectacular and remarkable economic collapse."
Here we have a description of a transformation from the greatest hopes of expansion to one of the highest levels of unemployment. Not long ago Cleveland was considered to be an economic success story and one of the nation's most important industrial centres, yet now in this report it is described as grim. The region, and this part of it, ought not to have a future that looks grim. If there is heartache instead of hope, despair instead of confidence and misery instead of happiness it is because the reality of unemployment in my region is an experience that has lasted too long for too many thousands of people. The past they know, they expect something better for the future. They live in the land of the three rivers—theTyne, the Wear and the Tees. It is ideal for industrial development. Their ports have trading links with Europe and the world. The road systems supporting them provide a network of accesses to the first-class locations available for industrial development. The rail and air services complete our communication advantages. The concentration on the cultivation of the environment recently continues to be art impressive bonus for a region renowned for its variety of physical attractions.

History has recorded the nature and character of the people. There are no doubts about the industry, tenacity and tolerance. There is an abundance of evidence of their adaptability and responsiveness to change. They have produced some remarkable leaders in politics, the trade union movement and commerce and industry, establishing a framework of social, economic and local government institutions in which new industrialists can find fulfilment in their business, cultural recreational and educational aspirations.

Why, then, have we a grim account of the region? Where does responsibility lie? I am not aware of one organisation, individual or local authority in the region active in industrial promotion and the provision of employment which lacks the spirit of co-operation or the professional standards needed for success. Why, then, the assertions of economic collapse? Some recent news, which continue the drama of decline, absolve the region of any responsibility. On 16 October, the Northern Echo, published in Darlington, ran a headline:
"North job shock—1,000 axed in a day."
That was the full meaning of a the closure of coke works, an electronics factory, a heating equipment works and redundancies in a telephone company in different areas and towns in the region. Three days earlier, the Mail, in Hartlepool, had a front page headline:
"Region is dying on its feet".
It referred to a report from the transport workers' leader, Mr. Joe Mills — a man known for his care and moderation—to his regional committee. The newspaper described it as a crisis report. These are the latest signs of the blight in the lives of a fine people who have watched the years of closures in their steel, coal and shipbuilding industries, observed the withering of the construction industry and the redundancies in the chemical and allied trades, metal manufactures and mechanical engineering.

None of this arises from any action of the region. The nature of the closures, the industries involved and the contraction in the major industries that I have mentioned suggest that the cause rests elsewhere. We are fully aware that the employment structure had to become more diversified and that the traditional base of heavy industries would be shifted. The capital investment was directed to more capital — intensive industrial replacement and productivity which did not provide the employment levels needed to match displacement. That fact, and the causes related to it, give the Government a greater responsibility to understand the changing world and its impact on regions such as the north. What is happening in world and home markets? New technologies are displacing traditional methods, new forms of production are being introduced, and a complex of new tariff and credit conditions in international trade and other factors external to the region have an impact.

It is convenient that the House of Lords Select Committee on Overseas Trade has just issued a remarkable set of conclusions after years of study. The first volume of the document published on 30 July 1985 states
"Government should give more and not less support to those bodies which are engaged in promoting exports, such as the Export Credits Guarantee Department, the British Overseas Trade Board, the Foreign and Commonwealth Office and the Overseas Development Administration."
I have studied the matter with care over the years, and it is high time we increased the amount of aid in the aid and trade provision programme. Moreover, there is a need for concern in the regions, where many jobs could have been made available, if the Government had been vigorous and active regarding the Bosporus bridge contract.

Clearly, national policies are needed to bring about effective conditions for regional survival and growth. I hope that the Minister will not give us a tutorial about what we can do for ourselves. We have had enough lecturing from Whitehall. I assure the Minister that the region is not short of industrial and professional standards, or the armoury of commercial and local government agencies well suited to promote and exercise all that is needed to attract new industries.

Nor do we want from the Minister a repeat of comparative performances of different Governments. The unemployed in my region are hungry for hope, not a history lesson on past failures. After six years of Tory rule they are entitled for once to hear the Government accepting their full responsibility, recognising that time has placed the ball fully in their court, and that it is their intentions in that matter.

The Cleveland experience may well concentrate the mind. A Cleveland review from 1974–84 addressed itself to the broader national trends and the analysis of industrial shift, to which I have already referred. The report stated that the unemployment rate doubled between 1979 and 1981, and that by 1984 the county job gap was about 67,000. Service employment as a proportion of total employment rose to 60 per cent. from 44 per cent. 10 years earlier.

That briefly describes the massive loss of manufacturing jobs. The scheduled transfer of central Government offices to the area never took place. Three thousand jobs were involved, but the transfer was rescinded in 1979. By 1982 the position had become so bad that the area was designated a special development area. That is not only the story of Cleveland, but of the region, where 244,000 people are now unemployed. Aid that might have come was withdrawn and policies never matched the nature of the problem.

The Government are ever ready to take credit for their rare successes. Let them now accept the responsibility for their failure. We have heard from one former Tory Prime Minister who supports the line of Government responsibility. The right hon. Member for Old Bexley and Sidcup (Mr. Heath), with his experience as a former Secretary of State for Industry, Trade and Regional Development, made a significant speech to the Sunderland Conservative association on 14 January this year in which he said:
"My message is, do not despair. The situation is not hopeless. The North has faced these problems in the past and has come through them … the White Paper on the North East … is now more than 20 years ago, but there are lessons to be learned. The first is that a strategy can be developed to deal with the problems of economic decline, the second is that the strategy can be successfully implemented … It should be possible to create a thriving industry in the North East … And it is here that the Government has a role to play. It can help indentify key sectors of industry and co-ordinate their development."
No prevarication there. The message is clear: no doubt remains about what ought to be done and what can be done. How different from the reply of the Prime Minister to my hon. Friend the Member for Easington (Mr. Dormand), who asked about the effects of the Budget on unemployment in the northern region. She said:
"Although unemployment is very high in the north, indeed it is the highest of all, the wages in the region are also comparatively high … The two might be related."—[Official Report, 21 March 1985; Vol. 75, c. 986.]
That was the Prime Minister's reaction. The fact she acknowledges; the responsibility she does not. Months later, during a fleeting visit to the region, she told the people there, "Don't be moaning Minnies." That was petulant, imprudent and unjustified. Then she ordered, "Stop it." Such posturings gain her no great credit and it is regrettable and sad that in the time that has elapsed she has taken no opportunity to make some redress and perhaps admit that the region has a long-standing reputation for objectivity in presenting its views. How different it would have been if she and her Government had matched that objectivity. Instead, we have a Government obsessed with promoting failure as success, a Government suffering from tunnel vision, obscuring reality and the consequences of their own policies, and a Government who act out of prejudice against the GLC and spawn a Local Government Bill abolishing all metropolitan county councils, under the pretence of needed reform. Tyne and Wear county council is an important authority and damage to it is damage to the region.

We have a Government spending many months of parliamentary time on ratecapping legislation and imposing penalties on local authorities and, yes, we have a Government who are oblivious to the social and economic costs of their own surgical operations although in my region there has already been too much blood letting. We have a Government who have become abrasive and intolerant.

It is no wonder that another former Tory Prime Minister said in another place that it was breaking his heart to see what was happening to Britain. It is breaking my heart to see what is happening to my region; it is breaking my heart to see the despair of young people, the anxiety of parents and the misery of poverty.

We are not so poor in this land that we cannot afford better regional regeneration. We are not so rich that we can neglect the young and the future that their training, their work and their health can provide. We need the will to do what is right and the guts to find the resources for the support of peace and work and leisure—resources that are so easily found for war and related purposes.

In drawing attention to unemployment in the northern region, I am pointing to the need to invest in Britain. The Government have had six years. They have had their chance. They refuse to change with the times or from their own course. They have no new strategy and they refuse to consider one.

No doubt the Minister will seek to deploy some selective material to provide a better face for the Government. It will be of no avail. The balance sheet of failure is there for all to see. We need a new board of directors for the business of Great Britain, and the electors in my region are waiting to make that possible.

12.20 am

In an eloquent and finely constructed speech the hon. Member for Hartlepool (Mr. Leadbitter) raised a number of issues about unemployment in the northern region and in his constituency. I shall try to answer fully.

The Government, who now have two Ministers in the Cabinet dealing with employment matters, are only too well aware of the seriousness of unemployment, particularly in the north where there have been longstanding and deep-seated problems. I shall try to answer all the hon. Gentleman's questions, although he did not observe the convention under which we share the time available equally on such occasions.

I shall first dispel the legend which the hon. Gentleman described. The Prime Minister did not call the people in the north of England "moaning Minnies." The context in which those words were used has been distorted and gone into mythology. It is inaccurate.

The Prime Minister was describing some of the success stories in the region. Alas, they are few, but she was trying to give hope to those who live in the region. The journalists round her would not accept that and pressed her with unpalatable and familiar statistics. She reproached them for not allowing her, even for a few minutes, to disclose some of the good news to encourage people and to emphasise that the north is not a total and abject failure. The Prime Minister was behaving correctly, but the incident was portrayed as if she categorised the people living in the area as "moaning Minnies.' That is inaccurate, as those who saw the incident on television will confirm.

I admit that over the past 20 years more than 200,000 jobs in traditional industries in the north-east have been shed, largely as a result of the world recession, technological change and market shifts. The people of the area have, therefore, had the difficult task of moving away from the old heavy industries towards the growth sectors of the economy. That brings continuing problems and much still needs to be done, but it is encouraging that the rate of redundancies in the region is about half what it was in 1981.

There are many encouraging signs. We should emphasise them without minimising the problem. For example, self-employment in the region has grown significantly. The number of self-employed people is now 87,000, which is over 50 per cent. more than when we took office.

Growth sectors are increasingly important. About 16,000 people are engaged in electronics in firms such as Isocom, the components manufacturer whose new factory in the Hartlepool enterprize zone will be employing up to 500 workers by 1988, and Middlesbrough's CADCAM computer centre which could bring 5,000 jobs to the area by 1995.

The pharmaceutical industry has grown from virtually nothing to an industry employing 5,000. The north-east has a firm foothold in the future with such industries as biotechnology and advanced manufacturing technology. Much of the good news is not publicised as widely as it should be.

Another example is the Nissan factory at Washington which should create 4,500 jobs if all goes well, with a further seven overseas companies attracted to the region this year—[Interruption.] Unfortunately, I cannot hear everything that is said from a seated position. I was not left as much time to reply as I should have liked. I have detailed some of the good news and some of the new growth sectors. If another hon. Member succeeds in obtaining another Adjournment debate, we may deal with other matters.

On the retail side, the Metrocentre, due to open in Gateshead in 1986, will be the largest out-of-town shopping complex in the United Kingdom creating up to 5,000 new jobs.

My Department has recently taken responsibility for tourism, and here, too, there are good opportunities for new employment — not only in the traditional tourist areas but in regions such as the north-east.

Over the past three years, the Northumbria tourist board has been able to assist directly more than 84 tourism projects with Government assistance of £1·3 million. There has also been substantial Government support for major tourism and leisure developments in the region, such as the Beamish open air museum.

The English tourist board has set up tourism development action programmes at Tyne and Wear and Kielder to develop the potential of the areas which will create new sources of employment for the local population. I hope that the hon. Gentleman accepts that there is significant scope for new employment in tourism in the region.

The region is far from being without hope and there are no insuperable disadvantages. With the right help much has been achieved and much more will be achieved. The right help includes a major infusion of Government assistance of various kinds, all of which has a direct effect on employment.

The hon. Gentleman will be aware that almost the whole of the region has assisted area status. It has benefited by well over £500 million since 1979 through regional development grants and selective assistance. The Department of the Environment has funded economic, social and environmental projects of nearly £300 million, especially in inner urban areas in the region. Only last week my hon. Friend the environment Minister announced an additional £15 million to tackle inner-city deprivation, £2·5 million of which will go to the north-east.

Middlesbrough, Hartlepool and Newcastle-Gateshead have enterprise zones. Newcastle-Gateshead also has a city action team to co-ordinate local and central Government action, especially on job creation, environmental recovery and housing improvement. In Cleveland, which the hon. Gentleman mentioned on a number of occasions, the Department of the Environment has launched the Cleveland initiative for a co-ordinated programme of action on major areas of derelict and underused land.

I must mention the Manpower Services Commission schemes. Government aid to support and encourage economic recovery and the creation of jobs in the region amounts to well over £1 billion since 1979. In that period, the Manpower Services Commission spent more than £300 million—and the planned expenditure this year is £151 million—in helping to create work or provide vocational training. As a result of the expansion of the community programme to help the long-term unemployed, 27,200 places are to be provided by May 1986 in the region—more than double last year's target.

In vocational training, lack of qualifications among the young is a particularly worrying problem. We recognise the value of a well-trained young work force, which is why the youth training scheme is to be extended nationally to two years, leading to vocational qualifications for school leavers from 1 April 1986. That is a major step towards ensuring that all young people under 18 are in work, in full-time education or undergoing high quality training, so that unemployment need not be an option for them from now on.

Organisations in the northern region have generally responded positively to YTS and the Manpower Services Commission plans to provide more than 25,000 places for young people on the scheme in the northern region this year.

Under the adult training strategy, we are focusing on known labour market needs. We plan to help to train nearly 13,000 people in the northern region this year under the adult training programme—an increase of 82 per cent. over the last year—and to help more than 18,000 people next year. At least three quarters of those helped this year will have been unemployed.

We recently announced our endorsement of the expansion of jobclubs to 200 by the end of the year. We were particularly encouraged to do that by the success of two of the first jobclubs, which were established in Durham and Middlesbrough. They have been doing an excellent job in helping the long-term unemployed to help themselves by providing advice and facilities for job hunting. So far, three quarters of unemployed people leaving jobclubs have found jobs, the majority of them quickly.

My Department has recently taken over responsibility for policy on small firms, which have an excellent potential as job creators through their ability to respond quickly to market demands, their flexibility in filling gaps in the market and their capacity for innovation. We aim to stimulate the development of small businesses and to create an economic climate which will be conducive to their sustained growth. There are nearly 80 proposals in my noble Friend's recently published White Paper, "Lifting the Burden", further to reduce unnecessary bureaucracy and regulation in this sphere.

I ask the hon. Gentleman to accept that the Government fully recognise the problems faced by many areas in the north. A great deal of well-focused assistance has been directed to those places that have been worst hit by the world recession. We should recognise also that there are encouraging signs; people in the north-east are responding well to the problems and challenges that they face——

The Question having been proposed after Ten o'clock on Tuesday evening 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 twenty-nine minutes to One o'clock.