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Furness Peninsula

Volume 210: debated on Tuesday 30 June 1992

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

10.52 pm

This is my first Adjournment debate and I doubt, however many years I represent my constituency, I shall ever speak to the House on more profound and important matters affecting the welfare and livelihood of my constituents.

My constituency has always been a great centre of British engineering industry, and in the past 120 years, we have built some of the finest ships ever to sail under the red or the white ensign. The words "built in Barrow" have, over the past 100 years, been recognised worldwide as a mark of engineering excellence.

The ships that we have built include the famous Strath class of ships, the Oriana cruiser which was launched in the 1950s, which was 42,000 tonnes in weight. the Methane Princess, which was one of the first liquefied gas tankers launched in Britain, and the first 100,000-tonne tanker, the British Admiral. Vickers in Barrow also built the first Royal Navy submarine, has completed the Polaris and is well advanced on the Trident submarine programme. It also constructed the first nuclear submarine for the Navy. Some of the more famous ships that we have built for the Navy are HMS Sheffield, which was tragically lost in the Falklands conflict, the first of the new class of aircraft carriers, HMS Invincible. That is a fantastic record of achievement.

Unfortunately, our ability to continue that fine record is now at serious risk. Since 1990, my constituency has suffered from the combined effects of the recession and the rundown in defence spending. Over the past two years, unemployment has doubled. It is now nudging 10 per cent. of the work force and may rise as high as 25 per cent. during the next three years. Over the past two years we have seen the end of apprenticeship training at Vickers Shipbuilding and Engineering Ltd. in Barrow and 5,000 jobs have been lost at the shipyard. Four hundred jobs were lost when the British Cellophane factory closed in 1991, and 800 jobs were lost at the Scotts paper mills. Three hundred jobs were lost when Listers yarn mills closed in 1990. Hundreds of other jobs in small and medium sized companies have also been lost over the same period.

There are very few job vacancies at the Barrow and Ulverston job centres. I was advised today that there are only 251 vacancies in my constituency. However, 4,300 people are now registered as claiming unemployment benefit. That is a ratio of one vacancy for every 17 people registered as unemployed. In May, 31 per cent. of school leavers in my constituency registered as unemployed at the Barrow careers office. That figure represents 276 of my 16-year-old constituents.

People live in my constituency under the constant fear and threat of losing their secure employment. The Minister for Industry must imagine what it must he like for many thousands of my constituents who have to live and work under those conditions. In May, 357 redundancies were announced in Cumbria, and of those, 314 were in my constituency. There is now a steady flow of jobs away from Barrow. It is almost no longer newsworthy when more redundancies are announced in my constituency.

Many of my constituents are considering employment elsewhere in the country and even as far away as Europe. That is a desperate situation, and no Government of whatever party can sit back for much longer and continue to do nothing about it.

The problems in my constituency have been compounded by two further factors, the first of which is our geographical isolation. My constituency is approximately 40 miles from the M6. As yet, we have no proper fast road links to the motorway. We also have, and continue to suffer from, poor rail links to the main west coast main line. We no longer have a direct inter-city connecting service.

The other factor that has compounded our problems is our historic dependence on one large employer—VSEL. The nearly 8,000 jobs that have been lost in my constituency will be difficult to replace. There is concern across the county of Cumbria that those job losses could trigger a wider loss of confidence in the region leading to a cumulative process of decline. That would be a desperately severe blow for my constituents.

As the Minister prepares his response to my speech, I want him to consider the fact that, for many generations, my constituents have responded to the needs of this country. We have been proud to work for, and to deliver and build ships, for the Royal Navy for the past 100 years. It was a duty and a privilege to serve the country in that respect. I believe that we are entitled in our hour of need to tell the Government that we need assistance and support to cope with massive changes that are affecting employment in the defence industries.

I want also to draw to the Minister's attention some of the numerous strengths of my constituency. We face a difficult situation, but it is important for the Government to recognise the massive potential and the great strengths of my constituency. We have a highly trained and skilled work force who are without parallel or equal anywhere in the country. We have and enjoy a wonderful geographical setting. It is a beautiful constituency, nestling in the foothills of the Lake district. On the Project Furness site we have some ideal factory premises and space for new inward investment. We face a serious problem, but we also have tremendous potential.

What, therefore, should he the Government's response to our predicament? The response requires the Government to think strategically. They should recognise the strategic asset that VSEL is for Britain. It is not just a shipyard: it is a tremendous and wonderful centre of engineering excellence. I want and need the Government to recognise that fact and take the appropriate action to save the tremendous reservoir of engineering skills that exists in Barrow.

The Government must recognise that market forces alone are not capable of responding to the predicament that my constituents face. The very problems that we face have been created by market forces and the decline in ordering and work from the Ministry of Defence. The MOD has been our principal customer for almost 40 years. Market forces cannot satisfactorily address the issues that face my constituency.

Will the Minister consider establishing Furness as a pilot project for a national policy on diversification? It is significant that the United States and German Governments recognise that the success of defence diversification requires a positive response from the Government. I believe that diversification is the greatest challenge facing the engineering industries in Britain. Companies such as VSEL in Barrow do not have sufficient financial resources to adapt to and deal with some of the problems.

Crucially, the Government must also accept that the right response involves granting assisted area status to my constituency. It requires new training initiatives and new transport investment. I draw the attention of the Minister to the work that Cumbria county council has done in supporting the work of economic consultants who have examined the case for transport investment in Furness and in particular the need for a modern dual-carriageway link to connect south Cumbria to the M6. I believe that the estimated cost would be £195 million. That would be more than offset by the reduced unemployment reduced travelling time in shipping and moving goods and the reduced accident rates that would clearly follow from improving the A590.

The A590 is a nightmare for those who have to use it on a regular basis. I am advised by the Cumbria constabulary that, in the past four years, there have been 41 fatalities on the road. That is the loss of one person every month. That is carnage, and it should not be allowed to continue.

We also need the Government to provide substantial support for Furness Enterprise. It is a small organisation trying to do a big job and it needs extra resources which only the Government can provide. In short, I ask the Government to develop a specific response to the problems that my constituency faces. We need an effective regional policy which addresses the needs of constituencies such as mine including those of my hon. Friends who are present tonight and those of Conservative Members, which face the consequences of the running down of defence spending.

The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) wants to make a short speech in my Adjournment debate, and I am happy to give him that time. To summarise, we are going through extremely difficult times in my constituency. For decades, we have been happy and willing to be available to build the ships that the nation's defences have required. We are proud of the contribution that we have made to the Royal Navy and to the defence of Britain. We are fully entitled and justified at this crucial juncture in turning to the Government for practical assistance.

We simply cannot cope on our own with the severe consequences of the running down of defence spending.

11.2 pm

I begin by congratulating the hon. Member for Barrow and Furness (Mr. Hutton) on his good fortune in drawing the Adjournment debate in the ballot tonight and on choosing this topic. I thank him for his courtesy in allowing me to make a short speech.

I agree with a great deal of what the hon. Gentleman has said; perhaps I can be allowed a few seconds to endorse some of his comments. My constituency comes close to Barrow and many of my constituents work in the engineering industry in Barrow. As the hon. Gentleman said, it is a centre of great engineering excellence and expertise. As the peoples of the free world rejoice that the cold war has come to an end, they should not forget the problems that that causes for places such as Barrow. One day we may need that expertise again. I therefore hope that the expertise in Barrow and the surrounding area will he given every encouragement to continue.

I was delighted to be able to congratulate the Government in the House a year ago, on their early response to the problems by setting up the Cumbria action team. I agreed with the hon. Member for Barrow and Furness, when he urged the Government to keep up the momentum. It is crucial, and I hope that the Minister will give us that assurance tonight.

I endorse the remarks made by the hon. Member for Barrow and Furness about communications. The road from the M6 to Barrow is diabolical in places. If the Minister cares to visit my constituency, I shall drive him on that appalling road, part of which goes through a farmyard. It is scandalous that an area of such great excellence and expertise should be served by such a lamentable road. I hope that the Minister will be able to tell us tonight that urgent steps will be taken to improve the road system, which is so important in helping industry in Barrow and its potential to continue to make a huge contribution to the well-being of this nation, as it has done for so many years.

11.6 pm

The hon. Member for Barrow and Furness (Mr. Hutton) and my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) have done the House a service in bringing an important subject before us this evening—the future of the economy of the Furness peninsula and the effect that the rundown of the defence industries will have on the area.

As my right hon. Friend recognised, my Department has been closely involved with the area for the past 15 months, and we have already been able to take some action to assist in the task of diversifying the economy, to which the hon. Member for Barrow and Furness referred.

The area has traditionally been heavily dependent on manufacturing industry, particularly iron and steel, and it continues to have an unusually high percentage of its jobs in manufacturing. In 1989, manufacturing employment in Barrow, as a proportion of total employment was 48.4 per cent., which was more than double the normal 22 per cent. for Great Britain as a whole.

As the hon. Member for Barrow and Furness said, in the past decade the shipyard has provided considerable prosperity for the area and has been by far its largest employer. In 1989, employment in the Barrow travel-to-work area was about 17 per cent. higher than it had been at the beginning of the decade. That represented about 7,000 new jobs. At the beginning of 1990 Vickers Shipbuilding and Engineering Ltd. employed 17,000 people, which was approximately 50 per cent. of the total working population of the Barrow travel-to-work area and represented about 60 per cent. of Barrow's male working population. Nothing could be a clearer sign of the importance of the company to the town of Barrow.

In addition, a number of other firms in the area are important contractors or sub-contractors to the defence industry. I agree with the hon. Gentleman that the area's success in that demanding industry is evidence of the skills and expertise available locally. I recognise that, as a result, the area is highly dependent on the defence industry and, in particular, on the scale of operations at VSEL. Nevertheless, the skills to which the hon. Gentleman referred—such as sophisticated design capabilities, electronic engineering and advanced welding techniques, will be a significant asset as the area seeks to attract new business.

In that respect, I am aware of the considerable local interest in assisted area status. The current assisted areas map was drawn in 1984. At that time, there was no justification for assisted area status for Furness, because the unemployment rate was 10.8 per cent., which was significantly below the then national average of 13.2 per cent. I am sure that everyone locally is aware of the announcement of a full review of the map. The period to the end of September has been allowed for public consultation. I can assure the hon. Member for Barrow and Furness that the Government are well aware of the problems facing the area and will take them fully into account in the review.

I am also aware that in March 1991, following the Governments's introduction of "Options for Change", VSEL announced a programme of major restructuring to take place in the next two to three years. The plan was to diversify operations by seeking new business to compensate for the loss of submarine manufacture. Nevertheless, even with a moderately successful diversification programme, a considerable rundown in employment levels at the shipyard was envisaged. The redundancies were, in part, to be aimed at increasing productivity and efficiency, but they also recognised that the shipyard's manpower requirement would be reduced as a result of the cut in defence orders.

My Department recognised the serious effect that that new strategy would have on the area and moved quickly, as my right hon. Friend the Member for Westmorland and Lonsdale acknowledged, to take steps to lessen its impact. We were able to contribute to a comprehensive study, which was carried out by the consultants, Segal Quince Wicksteed. It concluded that there were several key measures required to bring about the necessary diversification of the economy. They included improved communications, to which reference has been made, new factories and sites, enhanced education and tourism facilities and, in the longer term, designation of assisted area status.

We followed that report up on 13 June 1991 when my right hon. Friend the Secretary of State for Trade and Industry announced to the House a package of special measures for Furness and west Cumbria, based on some of the report's findings. That package was designed to enable the areas to begin the process of regeneration, recognising the potential job losses both at VSEL and further up the coast at Whitehaven, through the completion of major construction projects at Sellafield.

I remind the House that that package included a £15 million programme to be undertaken by English Estates to provide new factories and sites in Furness and west Cumbria. The Cumbria action team was also set up in Barrow and west Cumbria in order to work with local interests in developing an effective response to the problems facing the area. The action team was provided with a special fund of £1 million, to be used to bring forward projects to support the redevelopment of the economy.

Another part of the package was a high-level group to co-ordinate Government action in the area and to ensure effective liaison between the main economic departments. That group has met each quarter in Cumbria with representatives of the key local interests in order to ensure that that process is achieved. I understand that the next meeting will take place in Barrow tomorrow.

I believe that the action that we took 12 months ago was appropriate to the problem and extremely timely. English Estates has moved swiftly to begin the building of new units on the Project Furness site, a site which had been previously reclaimed using an £8 million derelict land grant from the Department of the Environment. The first set of premises with a total area of 4,200 sq m will be available for occupation in the late autumn. I was also pleased that we were able to secure some £1.5 million from Brussels under the PERIFRA scheme last year. That additional money will enable further construction work to be undertaken in Barrow. In particular, we shall be building a managed workshop complex to a high standard, aimed at encouraging the development of new small businesses in the town.

To assist that process further, the action team has recently formed a £100,000 joint loan fund with Barclays bank, which will operate in Furness for new small businesses and will enable them to obtain the necessary loans to commence their ventures. Those loans will be at preferential rates and will not require excessive security. We are also taking steps to support the newly established tourism development programme in Furness because we believe that that too, represents opportunities for new sources of employment in the area.

In total, assistance offered to date in Furness under the action team's special fund amounts to £130,000. That is on top of my Department's normal programme support, which has included assistance totalling £245,000 under schemes to encourage technology transfer and the development of innovative new products or processes.

Those and other measures which we have introduced within the past 12 months are, I believe putting in place the necessary economic framework upon which the area's future will be based. Quite clearly it will be necessary for jobs to be created in different sectors from those traditionally dominant in the area, but I believe that there is a real opportunity for that to happen. We have made a good start in providing the right help to the area.

I recongnise that the area faces a continuing major challenge and that the unemployment position is deteriorating. At present, about 15 months after VSEL's announcement and 12 months after the establishment of the special measures to which I referred, the rate of unemployment in the Barrow-in-Furness travel-to-work area stands at 8.5 per cent. That is still below the national average of 9.5 per cent. I recognise, of course, that the situation will change as more redundancies occur, but this illustrates that the measures that we have taken have been in good time to tackle the problem.

My Department has therefore played an important part in the work to date, but it is not a task for Government alone. It is essential that there should be a highly effective public and private sector co-operative effort in Barrow and Furness to tackle the problems effectively and to market the undoubted strengths of the area, particularly the skills to which the hon. Gentleman referred.

Indeed, it is important not to overlook the fact that the area has considerable advantages, not least the high quality and reliability of its skilled work force, and there is the beauty of the area, to which reference was made. In that respect, we welcomed last year the setting up of Furness Enterprise as a local body to co-ordinate activities on a public and private sector basis. We look forward to building on that foundation in extending the partnership, particularly across the private sector.

The special package is in addition to my Department's normal assistance measures for small and medium-sized enterprises, such as the consultancy initiatives, export assistance and technology schemes. I am aware also that in recent months there has been a feasibility study into the advantages which an enterprise zone would bring to Barrow and Whitehaven. The consultant's report on that study is currently being considered by Government Departments.

As hon. Members will appreciate, the action team's activities are not confined to my Department's interests. Other specific projects which are proceeding and which will assist the area include the construction of the Dalton bypass, which will provide welcome relief for the road difficulties to which my right hon. Friend graphically referred. Thai bypass is now well under way and, when completed in the autumn of 1993, should provide a considerable improvement to the area's link to the M6, which is at present far from satisfactory. I also know that the local development agency, Furness Enterprise, has exciting plans for the construction of a comprehensive maritime technology centre, which would take advantage of the area's high-tech skills by introducing new research and development work in marine and offshore matters.

That could lead to the attraction of new companies interested in developing modern products in the Furness maritime technology environment. To develop that idea, I am announcing tomorrow support from the action team's special fund for a feasibility study which will enable that interesting idea to be thoroughly evaluated.

Another important measure which will enhance the attraction of the area and stimulate local trade will be the redevelopment of Barrow's shopping centre. The first steps towards that major project have been taken by the Secretary of State for the Environment, who has approved a derelict land grant of £4 million to enable the necessary preparatory work to take place.

Furness is fortunate in being a particularly beautiful part of England with attractive coastal scenery and adjacent to the lake district. I believe that given that background and the skills to which reference has been made, the development of a high-tech maritime and offshore engineering culture and the improvement of the physical appearance of the town centre will make major contributions towards the task of attracting new sources of employment.

My Department will, of course, continue to play a full part in the stimulation of inward investment. We shall work in conjunction with local agencies and private business. I am pleased that the action team is heavily involved in developing the Cumbria marketing initiative which will be launched in September and which will promote the attractions of the whole of Cumbria. including Furness. I am sure that, with good will, leadership and effective partnership all around, Furness will be able to return to the more satisfactory levels of employment that it enjoyed in the past decade.

I think that what I have said should demonstrate to the hon. Gentleman that my Department has been far from inactive. We launched a major special package for the area over a year ago. We had identified and recognised the problem. We have active programmes across a wide range of activities, and all of these are contributing to the relief of what I recognise is a serious local problem.

To summarise, I recognise the serious problems facing the economy of Furness. My Department has already taken action by announcing, in June 1991. the special package of measures. The needs of Furness will be taken fully into account in the assisted areas map review, and I am pleased to announce that I am planning to visit Barrow in August to see for myself the work that is being undertaken and to meet the people involved in it. I look forward to that visit.

Question put and agreed to.

Adjourned accordingly at twenty minutes past Eleven o'clock.