Hyndburn (Unemployment)

– in the House of Commons at 9:32 pm on 28 February 1983.

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

10 pm

Photo of Mr Arthur Davidson Mr Arthur Davidson , Accrington

Once again, I want to draw the Government's attention to the chronic and serious unemployment problem that now disfigures and blights the Hyndburn district, and to show how the figures, compared with the region and the country as a whole, illustrate the urgent need for Government action and aid.

As far as I know, the figures are the worst that the Accrington area has experienced since figures were first compiled, and the Government cannot escape their responsibility for them. The least that the Government could do is to restore assisted area status to the Hyndburn area which, as the Minister will be aware, was taken away in 1979. At that time, unemployment stood at just over 4 per cent. and was, according to the Government, too low to justify that status. The Government have refused to reinstate the area's status despite a fair and friendly hearing from the Minister when he saw an all-party delegation.

In the past three and a half years Hyndburn has witnessed a catastrophic rise in unemployment. The northwest has been hit particularly hard, but Hyndburn has witnessed an even more sustained and devastating rise in unemployment than other parts of the north-west. On the Government's new basis of calculation, unemployment now stands at 16·4 per cent. In Rossendale, unemployment stands at 14 per cent., but, as the Minister will be aware, it now enjoys development area status. I do not complain about that, but Hyndburn now has at least as strong a case as Rossendale, if not even stronger.

At the meeting, the Minister emphasised the need for evidence of a prolonged and relative decline for him to change the status of an area. However, that decline has been long-term in Hyndburn. In January 1980, unemployment in the Accrington travel-to-work area stood at 4·7 per cent. and has now risen by 274 per cent. to its present level. Since May 1979, unemployment in the Accrington travel-to-work area has risen by more than 310 per cent. Although the rise in unemployment has been bad in the north-west as a whole, it has been only—I say that advisedly, because it is a shameful figure—122 per cent. The national rise in unemployment from 6·1 per cent. in January 1980 to its present level represents only—again, I use the figure for comparison purposes—136 per cent. So the increase in Hyndburn far exceeds the increase both regionally and nationally.

The change in the method of counting the unemployed, which was made in October last year, tends to obscure the frightening level of unemployment in Hyndburn. Under the old system of counting, the present level of unemployment in the Accrington travel-to-work area would be 18·1 per cent., while in the Accrington employment office area the level would be more than 20 per cent. Even under the new system, about 20·4 per cent. of the Accrington travel-to-work male population is unemployed.

When the delegation to which I referred met the Minister in May 1982 we pointed out to him the scale of recent redundancies. In the period between that meeting and today, the catalogue of job losses has continued relentlessly and remorselessly. Three hundred jobs have been lost at the Stanhill spinning mill; 100 redundancies at GEC; 43 job losses at Moss Gears; 25 job losses at Holbrook Engineering; 71 redundancies at Wills Fabrics; 20 job losses at Shopfitters, and so the list goes on. The sad truth is that, despite all possible efforts, local industry is suffering far more than industry, badly hit though it is, elsewhere in the country.

This is not due to wage levels or to the cost of industrial property in Hyndburn, since both are among the lowest in the country. It is not due to bad labour relations or to indolent workers, who are so often scapegoats of ill-informed criticism. The work force and the population of Hyndburn share the Prime Minister's dedication to the Victorian work ethic. Unfortunately they cannot find work to practise that ethic.

Photo of Mr John Lee Mr John Lee , Nelson and Colne

On the plus side, will the hon. and learned Gentleman pay tribute to the Government's enterprise allowance scheme which, as he knows, operates in north-east Lancashire as one of three pilot areas in England? It has been extremely successful in north-east Lancashire, in the hon. and learned Gentleman's constituency and in mine, and has been extended by the Government to the end of the current financial year.

Photo of Mr Arthur Davidson Mr Arthur Davidson , Accrington

The hon. Member for Nelson and Colne (Mr. Lee) knows that I am a fair-minded person and that I have paid tribute to that scheme. The hon. Gentleman has saved me from making the compliment that I would have paid later in my speech. However, useful as it is, it does not go anywhere near to solving the chronic unemployment problem which has now hit the region.

One of the problems is lack of investment in industry in recent years. Hyndburn has suffered because adjacent districts have been able to secure investment to the detriment of employment in the borough. I apologise for reeling out the figures to the Minister, but more than 80 per cent. of all Hyndburn's industrial property was built prior to 1945 with 64 per cent. being built before 1914. That is not the Minister's fault, but it is an important figure to bear in mind. Local firms in Hyndburn with expansion problems frequently complain about the lack of incentives for investment, particularly for plant and machinery and for new buildings. The sad truth is that national firms with factories in Hyndburn have invested in those areas of the country with most assistance for development—either the new towns or assisted areas.

The council has used its manpower and financial resources to the fullest in assisting individual firms with expansion plans and upgrading older industrial areas to encourage new investment but, unfortunately, its resources are not enough.

The Government have stated rightly and understandably that there is a need to examine other social and economic factors apart from basic unemployment statistics when formulating regional policy. I shall direct the Minister's attention to one or two of those factors. There is unprecedented unemployment in Accrington but the area has also lost a large percentage of skilled and supervisory workers, many of whom have left the area permanently. With unemployment increasing, there is a danger that a large pool of unskilled unemployed will remain. This will mean increased dependence on the social services.

The following figures illustrate the depth of unemployment in the area. In January 1980 393 people in Accrington had been unemployed for over six months. In October 1982 there had been an increase to 2,336. That was a six-fold increase. In January 1980 224 had been out of work for over 12 months. By October 1982 that figure had increased to 1,211, an increase of five and a half times. In January 1980 240 under the age of 20 were out of work. By October 1982 that had increased to 897.

In January 1980, 73 among the 20 to 29-year-olds had been out of work for over six months. That had increased to 690 in October 1982, an eight-fold increase. Only 25 in that group had been out of work for over 12 months in January 1980, but by October 1982 that had increased to 320, a 13-fold increase.

I am sure that the figures that I have recited impress themselves upon the Minister as being serious and deep-rooted, but there is also a need to improve the physical environment within and on the fringe of the main urban areas. Industrial decline has given Hyndburn a legacy of derelict factories and sites and acres of despoiled land. Hyndburn council is able to find only a fraction of the expenditure that is needed for environmental improvement. Adjoining areas have been given help under the Inner Urban Areas Act 1978 and Operation Groundwork to tackle their dereliction. I am not complaining about that but, unfortunately, no special recognition has been given to Hyndburn. Despite the high level of dereliction and the fact that in Hyndburn 6·9 per cent. of the housing is unfit compared with only 4·7 per cent. in the county as a whole—in England and Wales 33 per cent. of the housing stock dates from 1919, but in Hyndburn there is the staggering figure of 62 per cent.—Hyndburn has failed to receive priority treatment from Government and has had £1 million cut from its housing investment programme.

I want to give the Minister time to reply and I am aware that I have strayed over areas that are not within his direct responsibility. I am sure that he will pass on the points that I have made to the appropriate Department. I am quite happy if the relevant Minister writes to me about points that the Under-Secretary cannot cover today.

The recent announcement by the Secretary of State for the Environment of an aid package for the north-west, which I welcome, has further worsened Hyndburn's position in relation to its neighbours, some of which now have additional powers and finance to aid industry. Blackburn, for example, has been upgraded to a programme authority under inner urban areas legislation while Burnley has been designated a district. Neither of them, bad as their circumstances are in terms of urban deprivation, is significantly different from Hyndburn, even on the basis of the Department of the Environment's criteria.

I hope that I have shown the Minister that on a variety of criteria, the problems in Hyndburn are crying out for some type of aid, either urban or, preferably, by giving Hyndburn full assisted area status. The Minister will know that it is a hard-working area. The hon. Member for Nelson and Colne, whom, I am pleased to see, has sat through this debate, would be the first to acknowledge that. It is not an area that believes that the Government alone can help it. I am not suggesting that the Government are the only saviour for the area, but the area urgently needs aid. Unemployment is severe and getting worse. I hope that the figures that I have given—I hope fairly—will produce a fair response.

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment) 10:17, 28 February 1983

I congratulate the hon. and learned Member for Accrington (Mr. Davidson) on his good fortune in the ballot and on choosing this subject for debate. I agree that we are at one in our feeling that it is an area of the country that deserves real consideration. My hon. Friend the Member for Nelson and Colne (Mr. Lee) frequently reminds me, as does the hon. and learned Member for Accrington, that it is an area in which a large number of people have worked hard and want to work hard. None of us would want to underestimate the serious effects of unemployment in Accrington and its surrounding areas.

I know Accrington relatively well and I am pleased to be able to answer the questions that the hon. and learned Gentleman has raised. Nevertheless, we cannot do so without examining the background. Hyndburn has specific problems, but it suffers from unemployment principally for the same reasons as we have unemployment in most parts of the United Kingdom and why there is unemployment in most parts of the industrialised world.

We must remember that unemployment in Britain is largely the result of two factors. The first is the world recession and the fact that it is more difficult to sell our goods at home and abroad because of the contraction of the market as a result of the oil price hikes and the effects of the world recession. The second reason, which perhaps affects Britain more than other countries, is that for a long time we have hidden from ourselves the reality that our prosperity depends on our being able to sell goods at a price that people are prepared to pay and of a quality that they are prepared to accept.

Unfortunately, even in the parts of the country where there are relatively competitive wage rates and where the management and workpeople have worked hard together to create a sensible enterprise, there is considerable suffering from the general fact that we in this country have been less competitive than we should have been. That is a marked fact of our economic life.

I hope that the hon. and learned Gentleman, who has been most fair in many of the things that he has said, will accept that one of our real problems is that year after year we have sought to pay ourselves money that we have not earned. The difficulty is that those who have not benefited in the past because they have been sensible in their wage demands and have sought to make their enterprises successful are among those who suffer when the chickens come home to roost. At the moment we are paying the cost of many years of spending today money that we did not have much hope of earning until the day after tomorrow.

I remind the hon. and learned Gentleman that in the 1970s wage rates went up by over 330 per cent., while the productivity required to pay for them went up by 16 per cent. It is not therefore surprising that unemployment has risen by 200 per cent. By paying ourselves money that we do not earn, we create unemployment. That is the lesson from which none of us can escape. I am afraid that it is as true in the areas that have been relatively more sensible than others as in areas where people have grabbed money—some would say more efficiently—with greater alacrity than in Hyndburn.

I hope that the hon. and learned Gentleman will take from me a point that is sad but true, which is that Hyndburn cannot isolate itself from the wages that we are now paying for our sins. We have sought to spend money that we have not earned. That has meant unemployment. My hon. Friend the Member for Nelson and Colne has been brave in pointing out—which must be unsatisfactory to his constituents, as it is not easy to tell the truth in these circumstances—that much of the problem today is that we cannot sell our goods abroad as we would like nor compete with foreign goods at home as we would wish because our prices and quality do not meet theirs.

In Hyndburn I hope that the hon. and learned Gentleman will help me by bringing pressure to bear on his local council. One area that he did not cover was the effect of the actions of his local council on employment locally. I note with sadness that from 1982 to 1983 rates in Hyndburn rose by 19·3 per cent. If one asks people who are producing jobs to pay out well above the rate of inflation, one cannot expect people to be able to compete in the market. That is a sad and difficult thing to say and I wish that I did not have to say it. I hope that the hon. and learned Gentleman knows me well enough to know that, for me, unemployment from the earliest age was a scar. It was pressed upon me in family terms that it was the one thing that we must seek to avoid, as it destroys people's independence and dignity. I am saying this only because it needs to be said. Local authorities have in their hands a great opportunity if they can make their areas more attractive to industry.

I am sorry to say that in a country in which unemployment is as high as it is we cannot recommend special help for the area. As a matter of fact, it is not my Department's decision, but that of the Department of Industry. Unfortunately, the reason is that other areas seem to have greater need. I shall answer directly the hon. and learned Gentleman's point about his neighbour Rossendale.

The area of Hyndburn certainly has what we would all regard as a distressingly high rate of unemployment, but it also has a wider range of industries upon which to base its employment. The difficulty with neighbouring areas is that there are places which have extremely narrow employment bases and where the real need is to attract new industry to widen that basis. That is not because the crude figures are very much worse—in some cases they may be slightly better—but because the underlying structural problem with which we are concerned is very much more serious. That is why I have to say to the hon. and learned Gentleman that Rossendale has a different regimen from his area. I say that not because we have anything against his area, but simply because of the narrowness of the base upon which industry is set. That is something that we need to try to put right, difficult though it may be in our present situation.

I think that the hon. and learned Gentleman was a little less than fair when he went through the areas of redundancy. Hyndburn is attractive to many people. It is an area where those who are in employment, and have been in employment, have been known for their hard work and determination to try to ensure that their industries and factories are successful. It is an area which is now beginning to have a number of new jobs.

The hon. and learned Gentleman listed the sadnesses of Hyndburn, but I hope that he will recognise the other side. I refer, for example, to the success of Riley's which is recent and well worth while, and will mean more jobs.

There are also other firms which are now beginning to expand. I believe that we can look to them for the new jobs which are so desperately needed.

At the same time, firms are eligible for assistance under section 8 of the Industry Act 1980. There is special help under the microelectronics support programme, the coal-fired boiler scheme, the private sector iron and steel scheme, and the small firms loan guarantee scheme. Under the Science and Technology Act 1965 there are the microprocessor application project, the software product scheme, and the fibre optics, optoelectronics, robotics and Cadcam schemes. There is a range of schemes which are made the more important now that my right hon. Friend the Secretary of State for the Environment has designated north-east Lancashire, including Hyndburn, as an area to have one of the new enterprise zones.

The hon. and learned Gentleman should follow his own point, which was that the Government cannot do everything.

Photo of Mr Arthur Davidson Mr Arthur Davidson , Accrington

I think that the Minister was a little unfair to the Hyndburn council, just as he no doubt thinks I am a little unfair to his Government. The Hyndburn council has done a great deal to help industry in the area. When his colleague, Lord Bellwin, visited the area—he was gladly welcomed by me and others—he paid tribute to what the local council had done in helping to set up the Hyndburn enterprise trust to assist local industry, in conjunction with business men. I hope that the Minister will recognise the very substantial plus side in speaking of what the local council has done.

Photo of John Gummer John Gummer Parliamentary Under-Secretary (Department of Employment)

I am sure that the Hyndburn enterprise trust, to which the hon. and learned Gentleman refers, is one of the things that we would support. However, I must remind the hon. and learned Gentleman that his local council budgeted to exceed its expenditure in 1982–83 by 6·7 per cent. Although its grant will be £.80,000 higher in the current year, the grant is affected by those decisions of the council.

Those of us who desperately believe that it is our major concern to do something about unemployment have to say that if we are to see the effects of inflation being reduced to 4·9 per cent.—the lowest level for 13 years—and to make a difference in areas such as Hyndburn, we must look to the local authority for support, and an increase in rates of nearly 20 per cent. does not help industry. In those circumstances, we cannot sell our goods.

If we had sold on the export market the same amount or proportion as we did 12 years ago, and if we had sold against imports the same proportion as we did 12 years ago, there would be 1½ million more jobs in Britain, and many of them would be in Hyndburn, for precisely the reason that the hon. and learned Gentleman mentioned. Hyndburn is a victim of our general lack of competitiveness and of the fact that there and in the rest of the country we have for so long paid ourselves more than we have earned that we have made ourselves uncompetitive, even in areas such as his constituency and mine, where we have long histories of good industrial relations and people who really want to work. Therefore, I ask the hon. and learned Gentleman—

The Question having been proposed at Ten o' clock 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 half-past Ten o'clock.