Orders of the Day — Unemployment

Part of the debate – in the House of Commons at 12:00 am on 24 July 1978.

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Photo of Mr John Ryman Mr John Ryman , Blyth 12:00, 24 July 1978

I regret the partisan note that has been injected into the debate. I should like simply to make one or two points which seem to me to be very important indeed in the light of this debate.

In my constituency of Blyth, the rate of unemployment, for both men and women, is higher than the rate anywhere in the country with the exception of western Scotland and some parts of Merseyside and Wales. In Blyth, Cramlington and Bedlington, and some of the out- lying areas of my constituency, the present unemployment rate is terrifyingly high compared with the rate in the rest of the country.

In the short time available to me, I want to deal with only two points, which I respectfully suggest the Government could deal with immediately and which would bring about an improvement in the terrible situation in the north-east. I give credit to the Goverment for having introduced, in the words of the Holland Report, some 39 schemes since February 1974, some of which have been helpful, some of which have worked, and sonic of which have not worked at all. The job release schemes, job creation schemes, community industry and the rest of them have played a small part in dealing with the terrible unemployment problems in the north-east.

Where the Government have totally failed, and must admit they have failed, is that in seeking to attract new industry to the north-east and providing development grants and loans of various kinds, they have applied insufficient monitoring of those schemes. The result has been that firms have come to the north on the pretext of creating jobs by setting up factories, and so on, have absorbed the grants and loans, and some of them have, within a relatively short time, closed their factories, thrown many people out of work, and disappeared from the northern areas, having derived the benefit of very generous Government grants and loans.

This is a state of affairs which is continuing daily. This afternoon I was at the Department of Industry with a Minister of State. I was pointing out the fact that a wholly-owned subsidiary of Courtauld, Exquisite Knitwear, was about to close a factory on the borders of my constituency, throwing out of work 149 men and women, that same company having done exactly the same thing in Cramlington two years ago and having received millions of pounds in Government grants and loans.

I respectfully suggest that Courtauld is a company without a social conscience. What that company does, time and again, is to take Government money whenever it can get it, in the form of grants or loans, go through the motions of creating employment in the north, and, when it suits that company for internal financial manipulation of its own kind, close a factory, causing untold misery by throwing people out of work.

Courtaulds had the impertinence to close a factory in Cramlington two years ago—Exquisite Knitwear—and the following day apply to the Department of Industry in a bid to take over the old Brentford Nylons factory, which Lonrho eventually bought with Government aid of £5 million.

At that time, representations were made to the Department of Industry and the Department of Employment, and the reply that one got from Ministers and their civil servants was "What do you want us to do about it? Can you conceive of circumstances in which we can stop companies such as Courtaulds taking money out of the north and using that money for their own operations outside development areas?"

There is a specific example where my right hon. Friend and his colleagues in the Government can do something at least to alleviate the problem of unemployment in the north. They can strictly monitor grants and loans to companies such as Courtaulds and exert pressure on such companies not to close their factories in the north, because if they are minded to do so they should be struck off the lists of those entitled to Government aid of any kind.

Here we have a company that grabs public money for its own purposes, buys expensive machinery for development area use, and then ships that machinery out of the development area, to the southeast of England or elsewhere, having obtained that money by quite fraudulent means in the first place, and leaving behind a wake of people rendered unemployed after being given a short period of employment.

That is a specific topic that the Minister might like to consider. It could easily be achieved through officials efficiently monitoring the grants and loans made to companies in the north-east.

The temporary employment subsidy payments, which are substantial, should not be made to companies that are obviously going through the motions of, and laying the foundations for, future redundancies. One of the awful things about our being in the EEC is that we have had to ask permission from Brussels to extend our temporary employment sub- sidy schemes. They have been recast in a different form. When the payments are made, if the receiving company puts men and women on short time it now has to apply to the Government for an additional short-time working loan in addition to the temporary employment subsidy.

That is another example of the Government's pouring taxpayers' money into the pockets of companies such as Courtauld which take the money and then make men and women unemployed in the north. It is the continuing scandal of the rape of the north-east, where there are such companies grabbing public money and leaving a trail of unemployment in their wake.

At the end of the day, the only way in which the Government will get an increase in investment is to make it financially worthwhile for companies to go to the north. Industrialists have asked me time and time again "Why should we come to the north-east when we can set up factories in Germany, Belgium and elsewhere within the Community and do better out of it? What incentive have we to come to the north-east?" It is a question of fiscal and taxation policy. That is why I have grave misgivings about the Government's intention to restrict dividends again this week, as forecast, because it is a positive discouragement to investment and therefore to the creation of jobs in the north.