Employment (North Humberside)

Part of Clause 19 – in the House of Commons at 12:00 am on 29th April 1975.

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Photo of Mr Kevin McNamara Mr Kevin McNamara , Kingston upon Hull Central 12:00 am, 29th April 1975

Although I am happy to eventually have obtained this Adjournment debate after balloting unsuccessfully for many weeks, it is nevertheless not a happy topic. The subject I raise is the immediate, urgent and desperate unemployment situation on North Humberside and in the City of Hull in particular.

This concerns the right to work. This is a matter of concern, not only to our constituents, our unions and our employers, but to many Members of this House, particularly those of my hon. Friends who are sponsored by trade unions such as the Amalgamated Union of Engineering Workers, which has written to my hon. Friends and myself about this problem. It is interesting to note that although my hon. Friends representing the area are present, no Conservative Member representing the same travel-to-work area is in the Chamber.

Unemployment on North Humberside has consistently been over the national average over the past decade, in good times as well as bad. Now it is approaching the level of some development areas and has passed the levels of some other development areas.

The total, excluding students, is 11,414, of which seven short of 10,000 are men—an increase of 325 over the previous month and of 3,114 over the previous year. For women the number is 1,421, an increase of 640 over the previous year. In Hull the incease in male unemployment over the previous year has been 2,384, making a total of 8,238 males while for women the increase has been from 464 to 1,105. That gives a percentage increase of 9 per cent. for men and 2·8 per cent. for women——a total combined rate of 6·7 per cent.

In the same period in Hull the number of unfilled vacancies has fallen from 1,838 to 776 which means that roughly 15 people are chasing one job. This is a bad picture, even if students are excluded from the percentage and if we make allowance for people changing jobs and those registered as unemployed merely to obtain pensions and social security rights.

We have suffered a number of damaging blows in Hull and Humberside over the past few months and there may be worse to come. Thorn Electrical Industries in my constituency closed its factory, with the loss of 300 jobs. Imperial Typewriters, in the constituency of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), was scandalously treated by its multinational owners, Litton Industries, who sought to use its Common Market factories to precipitate on to the industrial scrap heap 14,000 people employed at its factory.

Ideal Standard—the biggest employer in my constituency—is on short time because of the cutback in home improvement loans and the failure of European orders. Armstrongs are on short time because of the recession in the car industry. The aircraft industry at Brough is concerned for its future and the fate of the HS 146. The fishing industry is in doubt over its future because of the Conference on the Law of the Sea and confusion over Common Market fishing policy.

Finally the Chancellor has slapped 25 per cent. VAT on one of the most labour-intensive industries in our area—the caravan industry, which had itself been subject to sufficient blows from outside before. The touring caravan itself has a straight 25 per cent. and the contents of many other caravans which will not have to bear the straight duty have been made subject to the general VAT rate. The effect of this tax on unemployment in our region could be most serious.

I have received a letter from a director of a large caravan company—Astral Caravan Company Limited of Hull—which has received the Queen's Award for Exports. This is what the export director writes: In my opinion the effects of the budget upon the Caravan Industry are likely to be nothing short of disastrous. Since November 1973 when the oil crisis really started to bite, we have had a succession of misfortunes. The price of petrol had a very natural direct influence upon the purchasing power of t he caravan owner and of course it was a main factor in the inflationary spiral which also has reduced the purchasing power and taken the competitive edge off our exports. Only this very morning 1 have received a letter from our Dutch manager showing how vulnerable is our position in relation to our continental competitors.Previous Chancellors excluded our young and growing Industry from any effect of Purchase Tax. This was something which we always appreciated as it enabled us to keep a healthy Home Market as a spring-board to our export plans. Our Industry has demonstrated the wisdom of such a policy by its export achievement.Under the present budget Mr. Healey is imposing on a Touring Caravan for the humble working man the same penal rate of tax as an asset-stripper would have to pay when buying a fur coat or expensive jewellery for his mistress. There is no sense in this whatsoever and it is going to stop many families from enjoying a simple and laudable pursuit at a time when their spending power is so limited. Even prior to this budget the Caravan Industry was suffering from the effects of inflation and over-production. The Continental competitors are moving in as fast as they can but with sterling being so weak, we will fight as hard as we can to bring foreign currency back to this country. We would have done this whether or not the Chancellor had imposed a prohibitive rate of V.A.T. on touring caravans in the home market, but I must say that if there is not to be large scale unemployment in this Company and in the Caravan Industry, some reduction of the 25 per cent. rate is both urgent and imperative.It is a sign of the difficulties through which we have been passing that we have had to close down two of our three factories—Wyton and Clough Road—and indeed in the third factory—Lorraine Street—we have had to curtail our production. Further cuts on our present labour force within the only remaining factory must depend on the damage done by the V.A.T. rate of 25 per cent. on home market caravans. We have already cut our production in May/June following the Chancellor's measures by about £100,000 monthly.' Even making allowances for the usual scare-mongering of manufacturers when their goods are made subject to tax, this is a serious position.

Finally, there is the fact that as a result of slum clearance and housing policies about 750 to 1,000 small businesses, excluding shops, may lose their premises.

However, the picture is not wholly black. Reckitt and Colman is continuing to expand and some smaller industries are continuing with their plans, despite the economic difficulties, and have seized the opportunities that North Sea oil development has offered them and followed the lead given them by my hon. Friend the Member for Kingston upon Hull, East. The completion of the M62 in the next 18 months or so and the later completion of the Humber Bridge will add to the transport infrastructure of the area and we have good educational facilities.

What, then, can be done about the situation? Here may I pay tribute to the work of the Industrial Development Committee and its Chairman, Councillor Louis Pearlman, and its Director, Ian Holden, for the work they have done in difficult times in seeking to attract more jobs to Hull and to maintain employment. They have been of considerable help to me in preparing for this debate and in suggesting positive remedies to meet both the short-term and long-term problems.

The remedies in the short term are, first, to extend building availability through EIEC to local expanding industries; and, secondly, to review and revitalise the community industrial scheme, particularly for school leavers. This scheme does valuable work in my constituency, but I should like the Minister to ask local industrialists why they have not taken up their full quota.

Thirdly, special training programme for school leavers, either in conjunction with local industry or through Government training centres. It would obviously be better to pay local industry to employ young people than to pay unemployment benefit. Fourthly, the reintroduction of a qualifying Eyesore programme. This is an important step. Fifthly, a review of intermediate area status for a limited period to get over the current crisis, particularly by introducing cash grants for investment in plant and machinery, say, up to 1978, so that in particular we could benefit from the employment that North Sea oil is bringing, which the North-East and Scotland has been hogging to itself.

Sixthly, special tax concessions for companies taking on school leavers, that is, a possible relief from corporation tax or an equivalent amount in some taxation field. Obviously this will affect the Chancellor and his taxation policies, but it is important.

I come now to the medium- and long-term measures. Some of them will be expansions of the short-term measures, but in particular one can add, first, an expansion of the building programme by EIEC to allow for expanding local industry under Part III of the Industry Act. I understand that this matter is at present under consideration in the Department.

Secondly, designation of local authority relocation provision in terms of related costs of roads, sewers and buildings, as key sector expenditure rather than LDS expenditure, where such schemes are proven to arise from housing clearance policies. I understand that this matter has been taken up by Hull City Corporation with the Department of Environment and is estimated to involve between 750 and 1,000 small businesses, excluding shops.

Thirdly, the establishment in Hull of a Government Office or nationalised industry headquarters operation, for example, BNOC or National Carriers. Hull is a city that has been almost totally ignored from this point of view, despite its very real unemployment problem and its proven potential to be able to absorb a major new incoming office employers.

Finally, a scheme for setting up an extension to the selective assistance provisions of the Industry Act, to establish a merchant banking and company flotation operation to deal with the problems of finance and the expansion of small businesses.

My Director of Industrial Development said to me in a note he sent me: In looking at the medium- and long-term investment stimulation and job producing policies, one cannot help thinking that a further extension of State interest into the industrial and commercial fields does bring to the Government a far wider responsibility to find ways to encourage investment than hitherto. Because of this I do not think that sufficient thought has been given to the psychology and economic triggers for industrial expansion. If the State is going to dominate in the way proposed, then clearly it must think about these triggers and do something to introduce effective policies. Undoubtedly in the medium term, however, before such policies can perhaps be thought about and put into force, some action to give substantial tax relief to companies investing more than a certain percentage of their profits into expansion could be a very useful and relatively quick acting stimulus. This is something that we must look at. It is something that the Chancellor considered in his last-but-one Budget. The situation in North Humberside is very serious, and if we are not careful it could well be disastrous for the people who live and seek to work there.