asked Her Majesty’s Government:

What action they intend to take to mitigate the loss of 800 jobs in Devon and Cornwall announced on 4 July by the industrial minerals group Imerys.

My Lords, the South West of England Regional Development Agency has deployed an area action force to ensure that all available support for the employees concerned is co-ordinated effectively by public sector agencies. In the longer term, the priorities for Objective 1 funding and investment by the RDA in Cornwall will continue to have a strong focus on developing alternative, higher-value and sustainable job opportunities for the clay communities.

My Lords, I am very grateful to my noble friend for that Answer. It is heartening to hear of the action that the Government have already taken. I am sure that my noble friend shares my pleasure that Imerys is offering to contribute £25 million to diversification and to finding other jobs for the people who may be made redundant. Does he agree that the key issue in Cornwall is probably diversification into other industries, one of which must surely be to get rid of some of the spoil and secondary aggregates that blot the landscape around St Austell? I am sure that he will agree that that needs capital investment. Will the Government re-examine the convergence fund and Cornwall’s Objective 1 status with a view to the Treasury possibly contributing a higher percentage than at present to match the funding from Brussels?

My Lords, one of the issues that the area action force is looking at is land and premises and whether alternative uses can be made of them. EU structural funds will be part of any action that is taken to improve the situation. Cornwall’s Objective 1 status has already attracted £328 million in European funding and, together with matched funding, a total of £878 million will go into the economy of Cornwall and the Scilly Isles. Cornwall will be eligible for funding from 2007 from the EU convergence programme. We need to see how those funds are used before we take any further steps.

My Lords, does the Minister accept that the 800 redundancies referred to in the Question of the noble Lord, Lord Berkeley, are part of a much wider picture of increasing unemployment? Will he remind the House of the figure for total unemployment three years ago and the figure today?

My Lords, this is a specific situation, which is due to a number of factors coming together. First, world energy prices are higher and, secondly, the low value of the dollar makes imports from Brazil much cheaper and more competitive. It is a specific situation that is not due to macroeconomic circumstances in the UK. I do not have to hand the figures that the noble Lord asked for, but I shall certainly write to him and let him have them.

My Lords, given that the wonderful tourist attraction of the Eden Project developed as a result of the area’s history of extractive industries, what more can the Minister do to build on the strengths of the tourism industry in Cornwall and Devon to supply jobs for people in those areas?

My Lords, tourism offers a real possibility of increasing opportunities in Cornwall. It is exactly those issues that the Government’s action task force will be looking at to see where opportunities lie.

My Lords, none of the European funding to which the Minister referred that goes to Cornwall and the Isles of Scilly is available to the areas of Devon affected by the job losses. That is compounded by the fact that the DTI has just published its assisted area status zones, removing west Devon from the assisted area status zone so that the area will not be able to receive that European funding. Will the Minister undertake to re-examine the position of west Devon, given the underlying statistics, which are compounded by the DTI’s decision?

My Lords, the main problem is, in fact, in Cornwall. In Devon, there will be a reduction in the number of jobs at Lee Moor from 120 to 50. In the greater scheme of things, that is not a reason for making adjustments to the plan. Of course, Devon will be eligible for support under the regional competitiveness and employment objective.

My Lords, does the Minister agree that the Government need to look beyond just tourism for Cornwall? Tourism provides jobs, but they are generally low-paid and seasonal. People in Cornwall want regular and well paid employment so that they can hold their head up like the rest of the population in this country.

My Lords, my remarks about tourism were simply to state that that is one of the opportunities available. Of course, we want to look at other opportunities—in particular, as I said in my Answer, higher value-added jobs, so that the jobs that have been lost can be replaced with equally good jobs, if not better ones with better long-term prospects.

My Lords, does my noble friend agree that in the past five years Cornwall has seen a major transformation? There is no doubt about that. The commitment given by this Government on Objective 1, Combined Universities in Cornwall, the minimum wage and a whole raft of things have been of considerable help. Nevertheless, there is not just this loss of 700 jobs in Cornwall and of 85 in Devon; there is also an effect on the peripheral, small businesses. Cornwall has no big businesses and it is very different from the Midlands in that regard. Therefore, does my noble friend agree that the principles of Objective 1 should continue? The money needs to be there, because it is not possible to say to employees, “There is a job down the road”. While I believe that employment in Cornwall has increased and that all the indicators are going in the right direction, this number of job losses in a very rural area is a major body blow. We have time—just over a year—before the redundancies take place, but does my noble friend agree that it is essential that something different is done in Cornwall, because it is a different situation?

My Lords, I agree that this is a serious situation and that the job losses will be keenly felt in Cornwall. As my noble friend said, we have one advantage—the job losses will not take place until the end of 2007, so we have some time to plan for this. It is essential that we use the action task force and EU structural funds to do everything that we can to find replacement jobs for those that have been lost.

My Lords, does the Minister agree that slowness and lack of variety of transport is one reason why it is so difficult to get more work into Cornwall? I am taking a train from Bodmin Parkway that leaves at 9-something but does not arrive in London until nearly 3 o’clock.

My Lords, I totally agree. In many of these situations, transport is a key part of regional regeneration. We must make certain that you can get both in and out of Cornwall easily and, in particular, that Cornwall is linked into the international transport system, so that, if you are trying to attract high-tech businesses that have a global market, which is increasingly the situation, it is easy to get into the region and out. In other circumstances, Cornwall is well placed to build up its trade with Europe.

My Lords, does the noble Lord agree that the job losses will also have an economic impact on the commercial viability of the ports of Fowey and Par, which rely heavily on the export of china clay? Will he also take seriously the suggestion of the noble Lord, Lord Berkeley, that the Government look into finding alternative uses for the waste material from the clay workings? Could not some form of tax incentive be given so that the material would become more environmentally attractive to use than, say, material dredged from under the sea or from other land sites? As someone who grew up in the port of Fowey and knew Cornwall well, I found the old Cornish Alps, as they were called—the conical white clay tips—very attractive. Efforts to ameliorate the environmental impact by levelling the clay pits into terraces have made the area look far more industrial than it ever used to. Getting rid of them would help not only employment but the environment.

I totally agree that the great difficulties in such situations are not only the immediate impact on those employed by the company but the effect on other, related areas of business. This is clearly a serious problem. The waste material obviously has to be considered when looking at the environment in Cornwall, but there are other ways in which I would want to view long-term jobs: they should be based on modern industries, innovation and new skills. In the end, that is what will give stability to that region.

My Lords, given that the 800-odd redundancies constitute a much bigger percentage of the jobs in this area than the 6,000 job losses at Loughborough and that they are therefore much more tragic for the employees concerned and for the families who have been in the industry for generations and given that there does not seem to be much hope, can the Minister explain why the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Trade and Industry all went to Loughborough to talk to the employees there and to try to encourage them and so on, but, as yet, no one from the top has gone to this extraordinarily tragic area?

My Lords, the job losses in Cornwall will be just as bitterly felt as those at MG Rover. However, there is one important difference: the real problem with MG Rover was that 6,000 jobs were lost overnight, and that was a very difficult situation to deal with. In this case, the job losses will be as bitterly felt as they were at MG Rover, but at least we have until the end of 2007 to find alternative jobs for the people concerned.

My Lords, can my noble friend also ensure that the action group looks at transport within Cornwall? With diversification and new job opportunities, which we all hope will come, it is terribly important that people can get around within the county. One of the road schemes near St Austell proposed in the latest round has, I gather, been put on ice, and I hope that that decision can be reversed. Is my noble friend also aware that, when the new First Great Western franchise for passenger trains was let this summer, many cuts to local services were proposed, not only on the branch lines but in commuter services on the main Cornwall line? Can the Government see whether some of those can be reinstated, so that local train services can help people going to new jobs?

My Lords, I agree that in these circumstances transport is extremely important. The decision on the deprioritisation of the St Austell to Bodmin—A391—road improvement was taken on a local basis, assessed against the merits of other schemes. My right honourable friend the Minister of State for Industry and the Regions will ask her opposite number at the Department for Transport to look again at this proposal in the light of the Imerys job losses, but it was originally a local decision based on local priorities.