HC Deb 15 April 1981 vol 3 cc348-409

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

5.11 pm
Mr. Mark Hughes (Durham)

It is a source of particular pleasure that you should be in the Chair, Mr. Deputy Speaker, as we debate the problems of the Northern region, because no hon. Member has been more assiduous in seeking to find solutions to those problems.

I should say at the outset that because we have lost the better part of two hours of the debate I have no intention of giving way during my brief speech. It is as well for hon. Members to know that in advance. Secondly, we understand and accept that the Minister of State, Department of Industry, has other duties, including meeting the National Enterprise Board and British Shipbuilders, which will inhibit him from being present throughout the debate.

The Northern region was a problem area long before I was born. The basic, classic industries of coal mining, iron and steel and shipbuilding were in difficulties before I was even a twinkle in my father's eye. What happened was epitomised in the career of Charles Mark Palmer who, starting with a coal mine at Marley Hill and the coke works associated with it, created from nothing the town of Jarrow to turn that coke into iron, steel and ships. He bought the ironstone mines to provide the iron, created the shipyards and produced what Carnegie described as the most elegant vertical integration in the world's history. He owned every ironstone mine, every coal mine and all the intermediate stages of the production of ships, which he sold at a profit on the world market.

The pattern, apart from Palmer himself, could be repeated throughout the Northern region. A great industrial empire was created on the indigenous facilities and natural resources of the Northern region—coal, ironstone and human skills and ingenuity. In 1851 the population of Jarrow was less than 1,000. Because of the skills and entrepreneurial drive of Palmer and his associates the population had reached tens of thousands by the turn of the century, and people were employed by him at Marley Hill and on the Cleveland hills.

After 1920 the classic cry "Do you want to buy a battleship?" rang a little hollow. The skills at the apex of that edifice were no longer required and even in the 1920s, if people did not want to buy the product of Palmer's yard at Jarrow, it was not just Jarrow which suffered, but the steelworks behind the town, the rolling mills, the cokeworks, the coal mines, and so on. The same story could be retold throughout the Northern region.

The run of towns in North-West Durham—Tow Law, Spennymoor, Willington, Crook and Witton Park—and in West Cumbria created, on the adventitious accident that they had both coking coal and ironstone in abundance, communities that exploited those resources with extraordinary skill. Throughout Cumbria and the North-East, the skill and initiative of local managements and local labour forces kept that going for many generations. In my constituency it is difficult to realise, as one drives through West Cornforth, better known as "Doggie", that it was the biggest rail-producing centre in the world in the 1850s.

All that was an economic development created from within the region, with the region providing the entrepreneurial skill, the capital, the labour and the profits. We did not import entrepreneurial skill and at no stage since censuses started in 1801 has any county had more of its population born within its boundaries than County Durham. It has been an inbuilt society and, with the collapse of much of that after the First World War, the problems arose.

Those problems were not only economic. They were, and remain, problems of unemployment in the basic industries. Consett is only the latest in a terrifying line of steel towns that were created out of indigenous raw materials on site which survived for some time by the skill and initiative of local people. However, unemployment was a problem at the time of my birth and it remains a problem. In December last year, unemployment in North-West Durham was 22.4 per cent. and there is every probability that in an area such as Consett unemployment will rise to between 40 and 50 per cent. in the foreseeable future.

The problems extended beyond unemployment. They occurred in housing and in settlement patterns, producing a series of pit villages that have many of the problems associated with inner cities but are excluded from inner city aid. The problems of many of the larger mining settlements such as Ashington, Hetton-le-Hole and Houghton-le-Spring are analagous to the problems of inner cities. However, because they are mining settlements and the settlement pattern is different, they are excluded from Government aid for inner cities.

In education, an unwillingness to take up education beyond the minimum school leaving age became a pattern of life for far too many children. Because job opportunities without CSE and O-level requirements existed, the pressure to leave school grew. No tradition was established of taking up higher education or even rudimentary sixth form education. Figures for as late as 1979 show that whereas in the country at large 27 per cent. of 16-year-olds stayed on at school the figure in the Northern region was as low as 18.8 per cent. This is another part of a long, ongoing set of problems.

This situation spills over even more into the problems of health. I need only refer to the recent report of the research working group under Sir Douglas Black on inequalities in health. The report recommended that 10 areas with high standardised mortality ratios should be the subject of a special health and social development programme costing £30 million in 1981–82. Four at least of those 10 worst areas are in the Northern region—Gateshead, South Tyneside, Durham and North Tyneside.

The decision of the Government not to accept the proposals contained in the report has a particularly adverse effect upon the Northern region. Not only do we suffer unemployment; our health is at risk. The same situation, without going into further statistics, applies to neo-natal mortality. Over a whole range of problems the social consequences of an earlier dependence upon coal, iron and steel, and shipbuilding have left deep scars that are far from being healed. The unwillingness of the Government to take action is the cause of some offence.

To deal with these problems, as far back as three days after I was born, Mr. Harold Macmillan, the then Member of Parliament for Stockton, proposed a set of Government measures. Those classic proposals have been central during the last 20 years to a bipartisan approach by Governments to the industrial problems of regions such as the North. This has led to the introduction of alternative industries to widen the economic base of the region by means of assistance, bribery, grants and taxation allowances, the providing to local authorities of moneys to alter the settlement pattern and to improve the infrastructure through improved roads and the cleaning-up of pit heaps, and to the providing of increased opportunities for industrial training.

For about 50 years, there existed a broad area of bipartisan agreement over how to embark on this process, although deep divisions existed over implementation. Since 1979, there have been considerable signs that this bipartisan approach has declined, changed and turned on its backside. We are now told that a solution to the problems of the Northern region can be found only through market forces being given free rein. Many of the policies associated with Lord Hailsham and others since the 1960s have achieved considerable success. No one living in the Northern region can doubt the improvement in the quality of life that has occurred in the last 20 years. The people have better housing. They have a cleaner environment.

I was amazed when I was told by Courtaulds in the Select Committee on Industry eight years ago that one of the reasons the company came to Spennymoor was the clean air. That view rings a bit sick in view of later events. It was, however, one of the reasons why the company came to Spennymoor.

The creation of new towns at Peterlee, Washington and Newton Aycliffe helped. New road structures have been a major influence in improving the lot in the Northern region. However, in the last 20 to 36 months—I must be fair and say that the change in Government in May 1979 is not a total break-point and that fears existed before the change—a new and far more formidable set of regional problems has assailed the Northern region. We are no longer faced with the problem exclusively of replacing the rundown of classic industries. That problem has not been solved. Anyone visiting Consett who believes that the provlem of the rundown of a classic steel town has been solved or that Government, local or national, know what to do about the issue, delude themselves.

In the last months a terrible and worse affliction has started to blight the Northern region. We have become, in part as a consequence of conscious Government decision, a satellite economy for multinational corporations. Many of the decisions affecting jobs in the Northern region are now taken in Eindhoven or Minneapolis. We are on the outer extremities of space in the Northern region in too many of our industrial concerns. If there is a circulation problem gangrene usually afflicts the toes before it affects the more vital organs. It is none the less fatal.

If multinational companies need to rationalise they close their Northern factories on the periphery first. I have already mentioned the problems at Courtaulds. that company has spent a lot of public money—with pleasure, I assume. Yet it fled the region at the first sign of difficulty. The decision to do that was not taken in Durham or Spennymoor or West Cumberland. It was taken outside the region. The decision-making has been moved away from the Northern region, with the result that many people in the North feel totally alienated. That is as true of management as it is of the work force. Local management does not know what its masters elsewhere have in mind for it. It has no security. Thus, it cannot give its work force any hope of security, in terms of long-term planning or investment.

I do not wish to embarrass my hon. Friend the Member for Easington (Mr. Dormand), but I give as an example a firm in Peterlee—Tudor Crisps. The factory was set up to manufacture potato crisps—a perfectly proper, small-scale industry in a new town. In seven years it has had four different owners. It has been moved about on the accountants' chess table with no reference to what is happening in Peterlee or to the work force or management there.

The pattern that has been established is causing a different kind of unease in the Northern region, a different kind of alienation from the one to which we thought we had the answer when we had only the problems of coal, iron and steel and shipbuilding. At least we thought we had an answer then. Now the answers are quite removed from our control. No decisions that effectively control the future of the Northern region are taken in that area. They are taken elsewhere. Fifty years ago, even if the decisions were wrong, at least they were taken in the Northern region.

In fairness, I must admit that it is no better in many of the nationalised industries that it is in the multinational corporations. I do not claim that local decision-making in nationalised industries is significantly better in terms of what is allowed to be done than it is in multinational companies. The coal industry is a major exception to that rule, but that is a matter of judgment.

Many of the people in the area feel alienated. They say—quite wrongly—that nothing that any Government have done over the past 20 years has made any difference. That is rubbish. Considerable advances have been achieved between 1960 and 1980 in terms of better housing, better health and more job opportunities.

What do we face now? As a consequence of the Government's policies, the industries that were brought in with Government money are creating the present unemployment. Those are the jobs that are being lost. We cannot hold on to the replacement jobs because we are satellite industries. We have too many satellite factories and it is easier to pull back to somewhere more congenial.

I give example of Ransome Hoffmann Pollard—a ball bearing factory at Annfield Plain. There is no evidence that it was less efficient in the production of ball bearings than the others. The evidence is that it was somewhat more inconvenient for senior London-based management to go and look at it. That is the way in which rationalisation pulls back, to the convenience of higher management. That is what worried me.

Finally, there is the role of Government. Government cannot escape, either passively or actively. The Government are a major employer. In January 1980, the Civil Service, by industrial categories, represented 708,000 people, of whom about 40,000 worked in the Northern region. But when the Government decide to cut back on everything except defence, they must realise that they are maintaining or increasing employment in defence. That, I assume, is their intention. The total payroll in Government defence establishments in the Northern region is 6,300, out of a total of 240,000 civil servants.

When an additional £1 million is spent on defence it does not go to the Northern region; it goes to the South-East. That is intentional counter-regional policy. If it is not intentional, the Government do not know what they are doing. If one spends those wages, there is a 0.7 per cent. spin-off effect of additional jobs elsewhere. It was open to the Government to transfer Civil Service jobs in the Ministry of Defence to the Northern region—to places other than the South-East. However, the Government chose, as an act of policy, not to do that, and that increased expenditure on defence further disadvantages the Northern region. The imbalance is the same in economic services—housing, and so on. The failure to move Civil Service jobs, even at this limited level of Government activity, disadvantages the Northern region.

Beyond that, the whole machinery of government is tilted against the interests of the Northern region. Many of the problems that I have outlined exist in Wales or Scotland, but there the civil servants have a career interest in knowing about, caring for and seeking solutions to the problems of those areas. They see a career in the Scottish Office or in the Welsh Office. It is difficult for any civil servant on the mainland of England to see a career in that set of terms as helping the Northern region. They are moved about ad hoc, from pillar to post. The Welsh and the Scots have a development agency. That does not add an extra tier of government, and none of us in the Northern region is asking for a development agency as an additional tier of government. However, such an agency would bring together forces and focus on the problems of the Northern region.

Summing up, what is terrifying is that the new economic disaster afflicting the North leaves the North with an increasing sense of alienation, with the feeling that it is not cared for. It may be mistaken in that. Fine words may well indicate the opposite. But what is quite clear is that the people of the Northern region feel that they can have no effective say in their own economic destiny.

If that continues for too long the future of effective democratic government in Britain diminishes. It is a recipe that will cause discord. The problems of the Northern region, both economic and social, require urgent reconsideration by the Government.

5.41 pm
The Minister of State, Department of Industry (Mr. Norman Tebbit)

First, I follow the hon. Member for Durham (Mr. Hughes) in his well-justified compliment to you, Mr. Deputy-Speaker, and your role in the past in the affairs of the North of England.

Secondly, I thank the hon. Gentleman for his understanding of the difficulty that I face today. Had I known for how little time I should be able to be present to listen to this debate when it was decided that I was to speak, I should have persuaded someone else to do so, because I feel that there is an element of discourtesy, albeit unintended, on the part of a Minister who speaks and then does not hear what others have to say. I undertake to read Hansard tomorrow more assiduously than I normally do.

Mr. Jack Dormand (Easington)

Easter reading.

Mr. Tebbit

Indeed, as the hon. Gentleman says.

The House welcomes an opportunity such as this to discuss the economic and social problems of the Northern region. It is some time since we last discussed the region. The hon. Member for Durham has set the tone of the debate in serious and reasonable terms. I disagree with parts of what he said, but I think that what he said was such as to provoke thought of a slightly deeper sort than often goes on in this type of debate, and I welcome that.

Although I am a Southerner, I understand the feelings, which might be described as peripheral alienation, to which the hon. Member referred. This is a complex matter, as he well understands. I should not want him to believe that those who live in the North of Scotland or in the farther parts of Wales are convinced that the civil servants who inhabit the offices in Edinburgh or Cardiff fully understand their problems. That does not make the problems of the North-East any better, but it suggests that it is not easy to find a solution to them without changing the geography of the United Kingdom—which I think is beyond the capabilities, happily, of any of us.

Whether or not the hon. Member intended to do so, he questioned the effects in the long term of what we had done in terms of regional aid. I do not question the need for regional aid. However, it behoves us all to question whether the aid that has been given has in the long term been as effective as it might have been had we been a little cleverer in the way in which we distributed it. I am not saying that we have any great new wisdom to offer on that subject; I do not believe that anyone has at present.

When we came into office we reviewed regional industrial policy very carefully. In carrying out that review we were conscious of the problems of parts of the Northern region. The changes that were announced in July 1979 by my right hon. Friend the Secretary of State for Industry were designed to ensure that assistance was concentrated in the areas that most needed it. That applies particularly to places such as Consett, Hartlepool and Sunderland, where many of our traditional industries, such as steel and shipbuilding, are based.

Incidentally, I welcome the fact that the top management of British Shipbuilders now spends its time predominantly in the North-East and has got rid of a large number of expensive offices that it had acquired in London. That shows a degree of sensitivity to the needs of the regions as well as a degree of understanding of the need to keep down unnecessary overheads.

In these areas, which remain special development areas, regional development grants of 22 per cent. are available. Firms investing there are eligible for assistance at the highest levels in Great Britain. The reductions in the coverage of the assisted areas, which are taking effect over a three-year period ending in July 1982, together with greater differentials in the aids available to industry in the different categories of assisted area, are intended to ensure—I believe that they will do so—that those that retain that status will be relatively more attractive to industry. Thus, regional policy, in its conventional terms, can be more effective for being the more concentrated. I take the hon. Member's point that it might thereby run the serious risk of bringing in from the outside the subsidiaries of major companies that may not have such an attachment to the area as would the domestically grown and natural product.

Of course the Northern region could not have any special immunity from the reductions in assisted area coverage, but there are good transitional arrangements for those areas to be down-graded. Even after the assisted area changes come fully into effect next year, over 88 per cent. of the population of the Northern region will continue to live in assisted areas, and no less than 81.5 per cent. of the population will be in special development areas and development areas. This is the second highest proportion in Britain after Wales.

The proportion of the Northern region covered by assisted areas is a measure of the region's problems. I share and understand the concern at the levels of unemployment in the region, and that concern is recognised in our regional policy, which gives such a high priority to the North of England. But regional policies alone cannot cure the problems. We have to tackle their underlying causes in many ways. The lack of competitiveness of British industry, which has developed over the years for a number of all-too-familiar reasons—wage increases that companies could not afford, restrictive practices, reluctance to change, not only on the shop floor, by any means—unwillingness to seek new markets with new products, and unwillingness to accept new techniques—again not only on the shop floor—is among those causes.

Inflation rates well above those of our competitors, to which Governments have contributed by over-spending and over-borrowing, have pushed up interest rates and inhibited investment. That is why the defeat of inflation is still central to our overall economic policies. That is vital to the country as a whole, but the Northern region above all desperately needs lower inflation and interest rates for its industrial recovery, not least because, as the hon. Gentleman said, when times are hard it is the periphery that suffers most. It is the economies, the regions and the industries and firms that have been weakened by past errors and failures that are most likely to be felled by inflation and recession.

It cannot be said too often that the best regional policy for any of the disadvantaged areas of our country is to create conditions from which the national economy can recommence soundly based growth. I have no doubt that there is enough drive and innovation, not least in the North, to nourish competitive firms that can make quality goods that customers want, at competitive prices, as they did in the past, given low inflation, sensible interest rates and steady currency exchange rates.

Naturally, after long years of failure there are pessimists who believe that it is our destiny to be the poor relation of Europe. They say that we can survive only in a siege economy, behind trade barriers with pay and price controls. Opposition makes a pessimist of any of us. If I may say so, there is a particular reason for pessimism in the Opposition's problems of the day. Equally, there are signs of success in the economy. The rate of inflation is coming down, and with it interest rates.

Dr. John Cunningham (Whitehaven)

Are the Government claiming success?

Mr. Tebbit

Does not the hon. Gentleman enjoy the success in reducing the rate of inflation?

Dr. Cunningham

What success?

Mr. Tebbit

The hon. Gentleman may not like the fact that inflation has fallen over each of the past 10 months, but most others do. Inflation rates are not set by the events of the weekly or the monthly report. It was primarily the monetary growth, the excessive Government spending and the excessive commitments to Government spending that we inherited that launched inflation at a much higher rate.

Dr. Cunningham

Why increase the rate of VAT?

Mr. Tebbit

There was a requirement to raise the revenue that we needed to finance the expenditure that we inherited.

Dr. Cunningham

The Minister is going back to his old ways.

Mr. Tebbit

As I have said, the rate of inflation is coming down. There is an accompanying fall in interest rates. There is more evidence of a rational approach to wage settlements on the part of managements, unions and work forces alike. There is plenty of evidence that some of the old, crazy, self-defeating and job-destroying restrictive practices are crumbling in the face of the new realism on the shop floor. The hon. Member for Workington (Mr. Campbell-Savours) chooses to laugh. There have been enormous increases in output per man hour in the steel industry in South Wales. What has happened at BL? Goods are now produced on time and at the right quality, as they never were before. The hon. Gentleman would be better to applaud that progress than to sneer at it.

It is highly dangerous to read anything into one month's figures, but the first rise in the index of production since November 1979, which was announced on 13 April, gives some further substance to the hope that we are at or near the bottom of the recession. It could be a misleading figure. It is not incompatible with a continued decline. However, it is far from incompatible with the behaviour of both the longer and the shorter leading indicators and, indeed, the coincident indicators, over recent months. I do not want to oversell any optimistic forecasts of spring, but I think that it is right that at least some of the pessimism should be tempered.

Labour Members often make much of the activities of the Scottish, Welsh and Northern Ireland Development Agencies and, indeed, of the Scottish and Welsh Offices. The guidelines given to the National Enterprise Board by my right hon. Friend in August 1980 asked the board to play a catalytic role in industrial investment in the assisted areas for a purpose similar to that of the Scottish and Welsh organisations. The derelict land clearance powers of the development agencies rest in England in the hands of local authorities. Similarly, the functions that are enjoyed in Scotland and Wales for promotion and publicity rest in Northern England with the North of England Development Council.

Our purpose is to use, especially through the NEB, the limited taxpayers' funds that we can make available to encourage or induce greater amounts of private sector investment. The first such venture, the Anglo-American Adventure Fund, is seeking investment opportunities in the North as well as in other regions. It is getting off to a good start, and I hope that it will be followed by others.

We have established two northern enterprise zones, at Hartlepool and Tyne and Wear, which have been warmly welcomed. The Northern region has benefited more than any other area in England from my Department's funding of the English Industrial Estates Corporation's factory building programme. About 70,000 are employed in the region in the corporation's factories. That is over 75 per cent. of the total throughout England. There are over 200 units, totalling 2 million sq ft.

Under the Industry Act 1980 the corporation has power to raise private sector money, and at Team Valley, Gateshead almost 180,000 sq ft. of factory space will be available under a scheme with the Legal and General Assurance Company. More schemes are on their way.

Mr. Harry Cowans (Newcastle upon Tyne, Central)

There are empty factories.

Mr. Tebbit

On the contrary. In Team Valley two small and local firms have achieved considerable success. Reid Furniture doubled its floor space, and Shaws Biscuits doubled its work force. I accept that those are small firms, but Palmers did not start as a great multinational company. It began as a small operation and it grew. It is possible that the fault that we have had in the North and in other regions in recent years has been an abnormally low rate of creation of new small enterprises. We have done too little to encourage them and perhaps too much to encourage monsters to come, and sometimes go.

The EIEC's small workshops have been successful at Sunderland and at Jarrow, and there will be 24 more units at Stanley. Consett will have another 42 units. The units are going well, especially the smaller ones. The corporation spent £14.7 million in the region. That is not a huge sum, but it is important in giving new businesses the chance to get started. I know that my hon. Friend the Under-Secretary of State for Industry—the hon. Member for Norfolk, South (Mr. MaGregor)—will want to say much more about that if he has the chance to do so.

In the shipbuilding industry, in the past six months British Shipbuilders has announced orders for North-East yards of seven ships totalling 144,000 tons. Since May 1979 we have offered North-East shipyards over £75 million to assist them in tendering for 40 ships totalling 600,000 tons. I know that Labour Members will be immensely cheered, as I was, to read the most encouraging annual report and forecast of Northern Engineering Industries that appeared in the press today. It seems to be most encouraging, because it embodies a measure of hope in intelligent Government purchasing and a great deal of exporting success by that company.

We continue to support a range of schemes to keep jobs that would otherwise be lost and to provide training and work experience through temporary short-time working, job release schemes, the community industry scheme, the youth opportunities scheme and the special temporary employment programme. I accept that those schemes do not respond with an answer to the deep problems of the area. However, since we came into office in May 1979 £175 million has gone into regional development grants, a third of the total of RDGs for Great Britain. About £55 million has been offered in regional selective assistance to support projects totalling almost £500 million. In 1979–80 alone the aid to the Northern region—this is regional aid—amounted to nearly £48 per head. That was considerably more than in other parts of the country. It is nonsense to suggest that those cunning Welsh and Scottish civil servants are doing something for their countries' or regions that we in the Department of Industry are not able to accomplish.

Mr. Cowans

What are their unemployment figures?

Mr. Tebbit

Unemployment figures are by no means low in Scotland or Wales. Expenditure per head in Wales in 1979–80 was £36. In Scotland it was £23.6, and in the North-West it was £34. None of those regions is without its problems. Even if unemployment is not always as high in those areas as it is in the Northern region although it sometimes is in patches they suffer even more from the regional disadvantage of distance from the wealthy South-East. Therefore, surely it is not true that we have left, or are leaving, the North of England solely to market forces. Those figures give the lie to that suggestion.

The suggestion that is sometimes made that a Minister for the North is needed to even up with Scotland and Wales, which have their Secretaries of State in the Cabinet, is not tenable in view of those figures. It would only result in calls for more bureaucracy, with Ministers for the North-West, the Midlands, the South-West and East Anglia, and perhaps London, which is not without its problems and which is the largest region in the United Kingdom in terms of population. The result of such things would be little but extra bureaucracy and costs, not more lasting productive jobs.

If any positive proposals were forthcoming for the better use of existing resources and for improved liaison and more effective co-ordination to make more of promoting the North I should, as ever, be willing to consider them, as the hon. Member for Easington (Mr. Dormand) knows. That was the invitation that was left with him, that if he had proposals for how those existing resources could be used more effectively and the existing institutions improved, I should be happy to hear them. I am not saying that I should necessarily be convinced. I am sometimes a hard man to convince. However, I should be willing to consider such proposals.

At the end of the day, the future of industry and employment in the Northern region is at least as dependant upon the abilities and the attitudes of those who live and work there as upon the agencies of government. This morning I carefully considered whether I should say what I had thought of saying, but I decided not to. Perhaps a changed decision is a bad decision. I thought that it might come ill from a Southerner to say it—that is why I hesitated. When the need for more firms and Government Departments to be more firmly rooted in the North of England is referred to, I believe that it is a pity that often the North of England does not sell itself better. There are immense attractions in the North of England, which are not understood by those who do not know it. When I hear people say that they would not move their firms there because not only do the staff or the civil servants in the Department not want to work there, but their wives and children do not want to be there, that is most depressing. It is depressing that people should have that idea about the North of England.

For my part, if I were not so tied to London, and if I had the privilege of being born a Notherner, instead of that of being born a Southerner, I can think of no more attractive place to live, provided that there are jobs.

Mr. D. N. Campbell-Savours (Workington)

Why does not the hon. Gentleman stand as a Tory in Workington?

Mr. Tebbit

The hon. Member should not tempt me. I might come to defeat the hon. Member one day, when I get bored.

I hope that those who represent the region—both hon. Members and those in local authorities—will not dwell only on the difficulties and disadvantages of the North and of those who live there. When I talk to the would-be investors at home and abroad, it is not helpful to find that their view of the attractions of the North has been distorted or damaged by what has been said by some of the representatives of Northern England.

We are not leaving the North to market forces. We shall continue to use regional aid to support the region and to seek to engender new jobs. However, I share the hon. Gentleman's misgivings about the shape and form in which some of those jobs have come in the past. That is why I am particularly anxious that more smaller firms should be established, because if they are not there will he a repetition of those problems in 20 or 30 years' time and there will still be somewhat depressing debates about the fate of the regions, not least the North of England.

6.4 pm

Mr. Arthur Bottomley (Middlesbrough)

It gives me great personal pleasure, Mr. Deputy Speaker, to address you as such.

The Minister said that my hon. Friend the Member for Durham (Mr. Hughes) had made a thoughtful and constructive speech. I agree. In his reply to my hon. Friend the Minister said that the North could do more to help itself. We are conscious of that, and at times we have tried to do so. Perhaps the hon. Gentleman, with his desire to help us in that endeavour, will ensure that the Government give more money to the North of England Development Council and the various agencies which are now relatively bankrupt. We cannot let it be known that the North is far better than most parts of the world—I have travelled fairly extensively—and as good a s any region in this country. Like the Minister, I speak as a Southerner. Let me appeal to him as my Member of Parliament to do all that he can to help the North.

Mr. Tebbit

It is always a privilege to intervene in the speech of one's constituent, even if he did not necessarily vote for me on the last occasion. We want to continue to do what we can to assist the Northern region, but the hon. Gentleman will not forget that I said that the most effective and vital form of help is to continue the programme of the defeat of inflation, which means a commitment to continue to control and reduce public expenditure.

Mr. Bottomley

Certainly inflation should be reduced. I shall come to public expenditure in a moment, on which I beg to differ.

First, I shall deal with a matter that affects—not only the North but the country as a whole, the acute unemployment situation. Unemployment is the most soul-destroying state that man can endure. It takes away his dignity and makes him feel that there is no place for him in society. I know that from my experience in the 1930s. It is incredible that a generation that can achieve the scientific wonder of launching the space shuttle "Columbia" and returning it to earth should be unable to devise a scheme for the just and equitable arrangement of our economic affairs.

Long hours of work are no longer necessary to do the world's work. With the increasing development of automation, it is inevitable that computers and robots will do much of the work previously done by human beings. That development will affect our lives in our homes as well as in the factories.

I was most disappointed that the microelectric factory did not come to the North-East. I am sure that my fellow Members in the North will wish to join me in paying tribute to Councillor Mrs. Maureen Taylor, under whose chairmanship the North-East Development Council, as it was, did so much to attract industry into the area.

It is important that we should put our minds to producing the goods required by the world, at the right price, and with firm delivery dates. The Government have a duty to channel investment into such industries. The National Enterprise Board is the best method of achieving that.

Britain's share of the world market in manufactured goods has decreased in the last decade. Achieving growth in the economy by 1 per cent. would mean obtaining the equivalent income from North Sea oil and the further employment of 40,000 work people.

The Government constantly urge, as the Minister did a moment ago, the cutting of public services. That is not only economically unwise; it is unfair to some of the most dedicated people in the service of our country. An unemployed nurse, teacher, social worker or road man costs the State more than if he or she were employed. Unemployment benefit, loss of taxes and social security payments can amount to more than that person's wage, without counting the overall economic cost to the community of loss of output and services and the loss of morale for the unemployed person.

I have urged the promotion of a national development loan. The Government could appeal to the nation to subscribe to a policy of national development to clean up our decaying inner cities, to exploit every bit of wasteland and to provide new amenities for our people.

In Cleveland, where my constituency is, the most serious economic problem is the rapid increase in unemployment as the recession deepens, as it is elsewhere in Britain. Registered adult unemployment has increased by 13,500 in the past year. Unemployment is almost four times greater than it was in February 1975. It was then only 4.7 per cent.; and is now 10 per cent. higher. Cleveland has the highest unemployment in the country.

School leavers and other young people are severely affected, and 3,050 young people are registered as unemployed, which is 57 per cent. more than a year ago and four times as many as in 1975. In addition, 4,732 young people are engaged in special schemes, such as the youth opportunities programme, which brings the total of young people without permanent employment to 7,800.

The apprenticeship system has been severely affected by the recession. Only 1,083 apprentices were recruited throughout Cleveland in 1980, compared with 1,542 in the previous year. A further fall in recruitment is anticipated for 1981. That means that we are not training the skilled engineer to provide the services required for the future. Able-bodied young people are being denied the opportunity of full employment that they deserve. It is sad to reflect that that means deep frustration and bitterness and the thwarting of youthful hopes and aspirations.

When I first became the Member of Parliament for Middlesbrough, East in 1962 I urged that we should develop services to enable young people to enter clerical and administrative work. In the main, it was heavy industry. I suggested that a Government Department should go to the North, preferably to my constituency. In due course I persuaded the Government to agree that the Property Services Agency should move to Middlesbrough from London. The dispersal of the Civil Service from London was not a party matter. It was decided by both parties, so it is all the more regrettable that the Government stopped the plan from developing, after Middlesbrough council had spent hundreds of thousands of pounds getting the site ready. I shall continue to press the Government on the matter. I shall also do all that I can to make sure that a Labour Government will go back to the plan.

The Minister mentioned civil servants in Wales and Scotland and the fact that the system was not wholly satisfactory. In the North we need a structure similar to those in Wales and Scotland to enable civil servants to work and to be promoted in the region, without the bright ones having to come to London. It is no longer necessary to keep civil servants in London, as communications are now so simple. I hope that the Minister will remind his colleague that the Property Services Agency is still wanted in Middlesbrough.

My constituency has suffered badly from the recession. The steelworks have been run down and thousands are unemployed. Mr. Bill Sirs today said that neither Parliament nor his union knew how many cuts would be made and that we could expect thousands to be made unemployed in the not-too-distant future. When an opportunity presents itself, I shall raise that matter with the appropriate Minister. Shipbuilding, heavy industry and ICI are all losing workers. It is no wonder that in Cleveland we have the highest unemployment in England. I plead with the Minister to ease the situation by getting the Datsun car factory to come to the North. I should like it to come to my area, but as long as it comes to the North we shall be happy.

Another matter of vital interest to my constituents is that the Darlington to Saltburn railway line is kept open. Without it Middlesbrough is cut off from the main railway centres. The Esk to Middlesbrough line is also necessary for local residents and is good for the tourist trade and can earn us foreign currency. I hope that that, too, will remain open. The Secretary of State for Transport says that the money must be found from the subsidies already allocated, but the amount provided is nothing like enough to meet the needs of the service.

The Government must act soon, in the interests of the country. We are losing valuable skills, morale is deteriorating and many young people are being deprived of their right to a useful place in society and a purposeful life. We who have looked forward all our lives to making the country a better place to live in must be concerned to ensure that a speedy solution is found to this disquieting problem. I hope that the Minister, who is my Member of Parliament, will urge the Government to do just that.

6.17 pm
Mr. Geoffrey Rippon (Hexham)

I join those who have expressed satisfaction with the fact that we hold this debate with you in the Chair, Mr. Deputy Speaker. It is fitting that you should preside over us after all that you have done for the North of England.

It is always a pleasure to follow the right hon. Member for Middlesbrough (Mr. Bottomley). We all share the anxieties that he has expressed about the excessively high unemployment in the Northern region. In due course I shall follow him and make some observations on the subject of public investment, which is necessary in the region in a more effective way than perhaps we have seen recently. The right hon. Gentleman and I at one time collaborated to some good purpose to try to bring new investment to the North-East at a time of difficulty.

With your wide experience in these matters, Mr. Deputy Speaker, you will know that Governments do not retreat; they simply advance in another direction. If I can speak today with greater optimism than I could at the same time last year, it is because the Government have changed course significantly, especially since last year's Budget. I hope that it will give some comfort to my hon. Friend the Minister of State and his colleagues that I no more suspect the Government, as I did then of motorway madness—blinding along the monetarist lane, regardless of the state of the road. The new doctrine of detour, as announced earlier this month by my right hon. Friend the Secretary of State for Industry, illustrates—and I welcome it—an increasing willingness to make changes of direction as circumstances require.

As my hon. Friend has said, the goal remains the same. The beating of inflation and the restoration of sound money must remain the priorities. But the route, as I see it, will be more circumspect in the future. It is a pleasure to see that my old friend and colleague the Secretary of State has once again taken off his hair shirt and is more suitably arrayed in his coat of many colours. That is reflected in the rather gentle and, if I may say so, effective speech that the Minister of State made today.

As my hon. Friend said, the problems of any region can only properly be considered in the wider national and, indeed, international context. The most substantial cause for cautious optimism is the reduction in minimum lending rate from a horrifying 17 per cent. to 12 per cent. Although it is still too high, at least it is now below that prevailing among many of our industrial competitors. Moreover, it is no longer linked to a totally unreliable measurement of money supply, namely, sterling M3.

What has undoubtedly happened—and this has greatly affected the North, like other regions—is that high interest rates have fuelled the money supply and firms have been driven to borrow more and more just to pay the interest, never mind the principal. Even where bankruptcies have been avoided, profitability and thus investment have seriously declined. Meanwhile, the cost of servicing the public debt has added to public expenditure, which has also been burdened by the enormous and wasteful cost of subsidising unemployment instead of being, as I would wish, more usefully deployed.

It is quite possible to be a monetarist and yet be concerned about the level of interest rates. I think that most hon. Members would agree that the right hon. Member for Down, South (Mr. Powell) is normally regarded as a monetarist. The House may recall an important speech that he made to the Bangor junior chamber of commerce, which was reported in The Times on 31 May 1976. In it he said that a bank rate, or minimum lending rate, of 10 per cent. or 11 per cent. was a monstrosity. He added that no economy can prosper—it is a miracle if it survives—when money for investment or building is charged at 15 per cent. or more". He offered, if he were to become Chancellor, to pour a cornucopia of benefit upon the British people with a bank rate of 3 per cent. That might be a little difficult to achieve rapidly in the present circumstances. But it is important to remember that there was a time when we talked of cheap and dear money, when 3 per cent. was cheap, 5 per cent was dear and 8 per cent. was a crisis. The right hon. Gentleman was right to warn also against the international game of beggar-my-neighbour in competitive increases in interest rates, which he described as pure lunacy. It is unnecessary. It is futile; and it is harmful. I hope, therefore—because in the end this is the only way that the Northern region and the rest of the country will benefit—that the Government will use all their influence to get the world's bankers and finance Ministers to come together to stop the interest rate war, which is perhaps as threatening to the prosperity of industrialised countries as protectionism was in the 1930s and may, indeed, lead to the very protectionism which would be so damaging again.

I entirely agree with my hon. Friend the Minister of State that as inflation and interest rates have fallen—and I hope, as I know that he does, that they will soon fall again—the situation of the Northern region is, at any rate for the time being, showing some signs of improvement. My hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliott) suggested in the debate on youth unemployment on 7 April that there were now more factories opening than closing in our region."—[Official Report, 7 April 1981; Vol. 2, c. 831.] As he pointed out, the figures produced recently by English Industrial Estates suggest that there is a considerable new interest in trading estates in the region. My hon. Friend the Minister's words this afternoon confirmed that.

No less encouraging is the evidence to be found in this month's issue of the Northern Executive, which reflects growing signs of market confidence in the strength and experience of Northern engineering companies. It points out, for example that Clark Hawthorn Ltd., the diesel engine division of British Shipbuilders in the North-East, reports 15 new contracts, including what it calls several "firsts", placed since the formation of the company in April 1979. Opposition Members in particular will have read with interest the comments of Dr. Gordon Adam, the Labour Member for Northumbria in the European Parliament, who wrote in the same issue that the North-East is now poised to become a leader in the drive for energy efficiency just as it was once the leader in the energy revolution, because of its dominant position in the coal trade. Those are encouraging signs, but I think that we would all agree that much more remains to be done.

The problem of high unemployment is not new in the Northern region, as the hon. Member for Durham (Mr. Hughes) made clear. The hon. Member for Newcastle upon Tyne, West (Mr. Brown) also made this clear in the debate on youth unemployment, when he said: Over the past six years, male unemployment has doubled, while among women there has been a fourfold increase."—[Official Report, 7 April 1981; Vol. 2, c. 834.] It is right to emphasise that this is a continuing problem.

The Opposition are right to be humble about unemployment in the North-East, because by and large since the war the record of Conservative Governments has been rather better than their own. Between 1951 and 1964, in the period of Conservative Government that has been called 13 wasted years but upon which we now look back as a golden era, unemployment in the Northern region averaged 2.7 per cent. Between 1964 and 1970, under a Labour Government, it rose steadily to 4.8 per cent. Between 1970 and 1974, the Conservative Government pulled it back, albeit rather slowly, to 4.5 per cent., but sharp progress was also made in the creation of more jobs and opportunities outside the old basic industries, particularly in the service industries. Total employment in the region, therefore, rose.

In the five years of Labour Government between 1974 and 1979, unemployment in the Northern region rose to 9 per cent. of the working population. Worse still, youth unemployment began to rise faster than any other form of unemployment, so that by the end of the Labour Government's period of office it was eight times what it had been when the Conservative Government left office in 1974. Indeed, in 1978 Newcastle city council stated that one in five of the under-twenties in Newcastle who had left school were without jobs. This indicated that, if one really dug deep, the figures were worse than they were in the 1930s. Therefore, as the hon. Member for Newcastle upon Tyne, West and others have fairly said, this is a continuing problem in the North. I think that it must be accepted that the Government inherited a difficult situation.

I believe that the economic health of any region is dependent upon the state of the national economy as a whole. At the same time, regional policy has an essential part to play. It is necessary to stimulate long-term growth in the less prosperous areas by increasing their economic attraction and improving their amenities.

I am one of those who agree that tax concessions and other subsidies are not the real answer. That has been proved by the record over the years. New industries—and this has clearly emerged from this debate—must want to come to the North because it possesses the necessary infrastructure of roads, communications, housing, and so on. That is why I have always believed that the Government should use their power as the major client of the construction industries in particular, but also of a number of other important industries, to stimulate selective public expenditure on investment, particularly at a time of economic recession.

I said when I was the Minister responsible for industrial and regional policy—and it remains my firm conviction: For regional policy to be successful industrialists must want to invest in development areas. Many of the development areas, again like my own, have great natural attraction and many of the towns and cities lie close to scenery of outstanding beauty. It seems to us that the basic aim of regional policy must be to concentrate resources not on indiscriminate assistance but on providing the services and creating the conditions needed for new industrial growth, and that rural as well as urban."—[Official Report, 9 July 1970; Vol. 803, c. 877.] It is at this point that I say that it is necessary to press for a strengthening of Government policy in this regard.

There is another aspect of policy to be considered. It should be noted that over the years the Northern region has benefited considerably from the European Community's regional fund grants. Since 1975, the North has received £113 million, and we should welcome the fact that on 13 March the European Community announced that a further £58 million would go towards infrastructure investment programmes in the North. The North has also benefited from loans at lower rates of interest from the European Investment Bank and grants from the European social fund. In my constituency, the cost of the Kielder project to the taxpayer has been considerably reduced by the aid which has been received from the European Community.

Mr. W. E. Garrett (Wallsend)

Will the right hon. and learned Member tell the House how much the taxpayers in the North-East contributed to the Eurofund?

Mr. Rippon

I am sure that the hon. Gentleman will be pleased to know that, although we contributed 20 per cent., we got back 27 per cent. The percentage may be a little lower this year because Greece comes in, and, although we do not rank very high in the Community league tables, we are still somewhat richer than Greece. So we must be grateful for that.

Instead of always criticising the European Community, some Opposition Members, including the hon. Gentleman, would do better to concentrate on ensuring that these funds are maintained and, indeed, increased and made to work more effectively. It would help if they would at least recognise that that is an important contribution. Successive Governments, I am afraid, have been reluctant to regard this aid as additional to the national regional aid, as I believe it ought to be considered. Nevertheless, local authorities are rightly very keen to get some of this regional aid because it enables them to finance important projects with a grant instead of a loan and so to avoid not only interest payments but payments back of principal.

I shall not cover the ground which I tried to cover in the Budget debate, but it is a matter of continuing concern to me, as it must be to many other right hon. and hon. Members, that the cuts in public expenditure have tended to be on capital investment rather than on current consumption. Governments have two weaknesses: first, they tend to be over-statistical, and the statistics they use are always out of date or wrong; secondly, they rely too heavily on whatever happens to be the current economic orthodoxy.

I believe that in evaluating the effects of economic measures more emphasis must be placed on their social and political consequences. This is the point at which the political judgment of the Government must override the economic theories with which they are presented in a narrow and unrealistic context.

It is another failing of economists generally and of those in the Treasury in particular that they refer to capital expenditure in the public sector and in the private sector as if they were referring to two mutually and, indeed, actively competitive zones. Nothing could be more wrong. When private capital is laid out upon capital expansion in industry, it is on the assumption that the public capital investment will go ahead at the same time. Indeed, it is necessary very often that it precedes it, because that public capital expenditure is on the roads, water services and means of public transport without which industry cannot operate. It is equally true to say that the overwhelming bulk of expenditure in the so-called public sector is basic expenditure in the private sector which carries out the work which the Government authorise—and everybody knows that it is the private sector which has been hardest hit.

There are two other factors that influence industry in deciding whether to go to a particular area. The first is the availability of skilled labour. That is why I welcome the Government's emphasis on training and retraining schemes and why I have always said that Ernest Bevin was right when he said that in difficult times we must not encourage people to solve their problems by moving to another area, because the people who go will be the people with the greatest skills, leaving the region, when the recovery comes, in an even worse state than it was before.

The second problem is the level of rates. The level of local expenditure, and thus the level of rates, in many parts of the Labour-controlled areas of the North is not only discouraging people from coming but beginning to drive firms out of business or out of the area altogether. If I may make a constituency point, one of the reasons why unemployment is not as high in my constituency as it is in some others is that the ratepayers—domestic, commercial and industrial—have the benefit of the very prudent Conservative Northumberland county council.

I do not want to end on a partisan note. We all know full well that most of our national and regional problems can be solved only if we work together to rebuild business confidence. We must create business confidence in the North of England. Confidence has been drained by constant ideological bickering and partisan legislation.

I am very grateful, and I am sure that everyone in the North of England will be, for what the Minister said about the great advantages in the North if we can make good use of them. Undoubtedly; over the years great damage has been done by people suggesting that the North is a sort of disused slag heap. We have a beautiful and productive countryside. I speak with all the more enthusiasm because, like the right hon. Member for Middlesbrough and many others in the Chamber today, I am a comer-in. We have a wealth of young talent in the Northern region which is being wasted. We must channel that talent into productive industry and commerce rather than let those young people swell the ranks of the unemployed or under--employed.

Sometimes, when surveying the problems of the Northern area, it is difficult to be optimistic but, as Winston Churchill said in 1941: Do not let us speak of darker days, let us speak of sterner days. I do not think that we can escape the fact that there are stern days ahead, and we have a stern task before us. But—and this is better than could be said last year—I believe that there is hope, and that hope is the genesis of self-confidence. It is self-confidence that we need in the North, just as we do throughout the length and breadth of this land today.

Mr. Campbell-Savours

On a point of order, Mr. Deputy Speaker. Many hon. Members wish to speak. If they all take 17 or 20 minutes, few others will be able to speak. I ask you, Mr. Deputy Speaker, to appeal for moderation and short speeches.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Perhaps the hon. Gentleman's eloquent words will be more effective than anything that I could say. I am sure that his words were heard in all quarters.

6.40 pm
Mr. A. J. Beith (Berwick-upon-Tweed)

It is a pleasure to follow the right hon. and learned Member for Hexham (Mr. Rippon), who is my neighbour in constituency terms. I agree with much of what he says, and with much of what he has said in the last year or so in criticism of monetarism and the drastic reductions in public capital investment. There is a colossal waste of public money in the North-East, particularly in subsidising unemployment. We are spending ludicrous amounts of money on unemployment. We are wasting that money, and the lives of people. Some of them are skilled and senior and others are youngsters who should be getting equipped for work. It is an appalling waste.

Some of the waste is the result of the general economic situation and can be traced to general economic policies. the exchange rates have hit our exporting industries hard, and they subsidise the imports with which those industries compete on the home market. The high interest rates have crippled small businesses in particular. Such businesses should be expanding. Once a 7 per cent. bank rate was thought to be a national disaster. Businesses today have to cope with very high interest rates, even after the recent reductions.

High nationalised industry prices cause serious problems to many industries. During the debates on the Budget many hon. Members, including eloquent Government Members, referred to the appalling dangers of the current economic strategy. They believe that, far from achieving the Government's objectives, it will bring about more unemployment and greater inflation in about a year's time.

I shall concentrate my remarks on a number of recommendations for action in several spheres which I believe will be helpful to the North and to that part of the region that I represent. We welcome new industries in our constituencies. I do not altogether agree with the hon. Member for Durham (Mr. Hughes), who appeared not to welcome American and other outside investors who are playing a major part in the North-East. Among the new industries in my constituency are firms such as Sterling Winthrop, which is American-owned but which is investing substantially in that area. Polychrome, another American-owned company, has expanded in Berwick. We welcome such firms.

However, we are not helped by the present policies on regional aid and development areas. The Government are not concentrating aid where it is most needed. They do not appear to apply logic when setting the boundaries.

Alnwick and Amble in my constituency have a 13 per cent. unemployment rate which conceals an even higher figure in Amble. I cannot understand why they have been demoted to intermediate area status when some of the most prosperous outer suburbs of Newcastle, such as Ponteland, are treated as special development areas. The right hon. and learned Member for Hexham also mentioned the illogicality of the arrangement. Some of the most prosperous areas in the region are eligible for the highest levels of aid, but others with the most serious problems are given the very limited intermediate status at the most. The present policy affects eligibility for the various forms of European aid. The Government are cutting us off from the aid that we should receive.

In addition to looking after new industries we should safeguard the existing industries on which the North is based. Two of the traditional industries in the rural North are agriculture and fishing. We have other opportunities to debate them in detail, but they are tremendously important to the region's economy, and we must look after them. It is not only the problem of the common fisheries policy, but successive Government measures that are making the people employed in the fishing industry believe that they have no future. If that industry goes, employment opportunities right down the coast of North-East England will be lost.

We must also look to the future of the engineering industry, which has suffered greatly from present Government policies.

The coal industry has a far greater future in the North-East than the Government recognise. Off the coast of my constituency there are many opportunities for future development if the National Coal Board is allowed to invest in such development. We need a commitment to re-investment in the coal-fired power stations of the North-East, allied to the development of district heating. I cannot understand the CEGB's enthusiasm for looking all over the countryside for sites on which to establish nuclear power stations when it has existing sites in which it can invest to provide coal-fired power stations and district heating. That would reduce the colossal energy waste. We should be moving in that direction rather than investing in nuclear power stations at Druridge Bay, for example. We must make effective use of our coal resources.

The important quarrying and extractive industries of the North-East depend upon the state of the construction industry. The construction industry in its various forms in the North-East is in an appalling condition. Various bodies associated with that industry have banded together in the northern group of eight to express their deep concern about the effect of the economic situation on all the industries, trades and professions allied to the construction industry.

There is scope for public capital investment of a selective and useful kind in housing rehabilitation, for example. That would directly help the construction industry. Much energy could be saved by a housing insulation policy. That would also provide work for the construction industry. Many other public works are needed. The whole of the Northern England sewerage system needs urgent investment. Investment is also needed in railways and telecommunications. Without such investment the area will suffer, because areas with better communications will benefit. The expansion of business has been frustrated by the lack of investment in telecommunications and the railways. Many businesses suffer as a result of delays in telephome installation and difficulties with the telecommunications network.

We must also have a sensible public buying policy. Examples of foolish buying by Government Departments keep coming to light. There is a fear, for example, that Marconi, in the North-East, will suffer by the choice of specifications that favour a Dutch concern rather than Marconi for investment by the Ministry of Defence.

The Government must scrap the imposition on the life and commerce of the North-East of the 20p increase in the tax on petrol and diesel fuel. That will have a damaging impact throughout the North-East, particularly in the rural areas. Petrol and diesel prices are already higher in rural Northumberland than in the rest of the country. Diesel prices are higher in Britain than in most of Europe. That has a serious impact on attempts to provide employment, to expand business and to get people to work. When people in my constituency take into account the cost of getting to work and the tax taken from them, they find that in few of the jobs available can they earn more than unemployment benefit. That is ludicrous.

We must do something about fuel costs to industry. That was a missed challenge in the Budget. We must enable industries such as engineering and aluminium smelting to remain competitive in a hostile international environment.

The future of the Development Commission should be safeguarded. It has played an important part in establishing factories in the rural areas. Through the Council for Small Industries in Rural Areas it has also helped small businesses. I can understand the enthusiasm that was expressed by the right hon. Member for Huyton (Sir H. Wilson) the other day to expand COSIRA and do something similar in urban areas. However, I am anxious that COSIRA's expertise should not be diluted and taken away from the rural areas and that if a parallel service is provided in the urban areas it is not at the expense of the rural areas. We cannot afford to lose the small, almost skeleton, team that is providing this aid to small businesses in rural areas in order to provide an alternative in the urban areas.

Mr. John Home Robertson (Berwick and East Lothian)

Is the hon. Gentleman aware that the Scottish Development Agency provides such an excellent service in rural areas as well as urban areas? Perhaps the Northern region could benefit from a similar type of development organisaion.

Mr. Beith

I am aware of that. I said that to the Labour Government on many occasions but they seemed rather slow to respond to the possibility. Although some hon. Members may tonight advance the case for a Northern Development Agency, I am concentrating on the need to make the government modify some of their policies in order to mitigate some of the impact that they are having on the North-East. I hope that more immediate results will emerge from this debate than the longer-term objectives which I share with other hon. Members.

I do not want to leave my point about the Development Commission without paying tribute to the work that it has done. I hope that its ability to remain independent of the shifts and changes of overall Government policy will continue. That body has been in existence since the days of Lloyd George, who established it. Its commitment to rural areas has survived all sorts of nuances of Government policy. I hope that it will continue to work for rural areas, many of which are in the North.

Education is also of great importance to the future economy of the North-East. The Northern region has a lower rate of youngsters staying on at school after the age of 16 than any other region in the country. Only 18.8 per cent. do so, compared with nearly twice as many in London. All sorts of reasons have contributed to that, particularly the pressure to get a job in order to contribute to the family income. However, the Government have now added a new incentive for youngsters not to stay on at school. The new social security benefit regulations effectively say to young people "Either leave school now or miss the chance to get social security benefit until September". The Government are saying this at a time when teachers are urging youngsters to stay on until the summer and take their GCE or CSE examinations. The effect of the new social security regulations is to bribe youngsters to leave school before they obtain examination qualifications that could help them in later life. I plead with the Government to end this ridiculous incentive to youngsters not to obtain qualifications. It is absurd. I can see no logic or sense in it.

Many aspects of national and regional policy merit major changes. In the long-term, the North should be given a greater opportunity to control its own affairs. At present, within the Civil Service structure, it is worrying to see power drifting away from the North to places such as Leeds. The Newcastle offices of Government Departments are being made subservient to offices in Leeds. That is no way to get decisions taken in the North by people who are constantly in communication with the local authorities and the organisations in the North.

That is a great mistake. The Government ought to reverse their policy and move towards a system under which the North can take more charge of its own affairs. As well as making those changes in major overall policy for which more and more people in Parliament, business and industry are pleading, the Government should act on some of the specific recommendations to which I have referred.

6.55 pm
Sir William Elliott (Newcastle upon Tyne, North)

I should like to follow the hon. Member for Berwick-upon-Tweed (Mr. Beith) on many of his points, including what he said about education, but if I do so it will take more than the 17½ minutes to which the hon. Member for Workington (Mr. Campbell-Savours) suggested we should restrict our speeches.

I should like to comment on the exclusion from development area status of places such as Amble and Alnwick. We must be flexible. I hope that we shall not return to the situation in 1964, when the Labour Government spread aid too widely, because if that occurs it ceases to be aid at all. That was the discovery that we made in the years after 1964. It is necessary to concentrate aid, first, where it is most needed, and, secondly, where it will do most good. Therefore, we must be flexible. I appreciate the problems associated with the places mentioned by the hon. Member for Berwick-upon-Tweed, and I hope that in due course they will be included in aid proposals.

The hon. Member for Durham (Mr. Hughes) set a sensible tone to the debate. Like the hon. Member for Berwick-upon-Tweed, I did not agree with all his comments, particularly his comments about firms from abroad making the North a satellite region. However, I agree that the problem is deep-seated. Like the hon. Gentleman, I was born in the area and have loved it all my life. The problem of unemployment is both deep-seated and long-standing.

As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said, there was a period in the late 1950s when the North enjoyed virtually full employment, as the term was defined by the late Hugh Gaitskell. That is almost unbelievable now, but in fairness it must be said that the storm clouds were gathering even then. Conferences were being held in Newcastle upon Tyne, called by the then Lord Mayor, to face the inevitable consequences of the rapid contraction in the shipbuilding, coal and steel industries. Over 15 years those three industries have lost 170,000 jobs. It take an enormous number of small units to make up that number of jobs. Nevertheless, it is estimated that during that same period the region has attracted about 127,000 new places.

I am encouraged that so far we have not heard much about a development agency or Minister for the North. In the past it has been suggested that that would solve all our problems. I have great respect for past Ministers who have had responsibility for the North, including the right hon. Member for Houghton-le-Spring (Mr. Urwin), but to suggest that the creation of an additional layer of bureaucracy would solve our problems is to give false optimism and hope to the region. I do not believe that it would. We must build on that which exists.

Mr. Dormand

We are not saying that.

Sir William Elliott

It has been said enough times in the past. At present the region enjoys regular visits from Ministers, and I know that the Government are fully aware of our problems. So were the Labour Government. During the time of the Labour Government, I once calculated that the Northern region enjoyed visits from Ministers at the rate of two-and-a-half a week. We have almost achieved that rate now.

I agree with the hon. Member for Durham that we have been too slow in encouraging new industries to come into the region. We have hung on for too long to our old, established industry and tried to make it work. If anyone were to suggest that unemployment has risen sharply in the last two years I should disagree, because it has always existed. It was hidden unemployment, because the industry of the North was heavily overmanned.

We are now preparing for an upturn in the economy, with industry that is leaner, harder, and more able to meet foreign competition. They were the problems faced by British industry towards the end of the Labour Government's period of office. Our main industry had become uncompetitive, and if we do not realise that now it bodes ill for the future. For too long we have tried to create an industrial pattern based on the old coalfields.

We should be wary of suggesting massive public works ventures or further subsidised employment of any sort. We want real employment, real jobs; work that is being done and manufacturing that is being undertaken to produce goods that are required.

I am very anxious that the Government should stick to their main strategy of reducing inflation. Any more public works engendered simply to create employment, and the subsidisation of further temporary employment, will inevitably mean more borrowing, or more taxation, in order to provide the subsidisation. Either of these things will mean higher interest rates. Higher interest rates are the problem in the Northern region, for they deter the new employers who are so badly needed in our region. Hon. Members on both sides of the House are working throughout the region to try to find the right answers to our problems.

I should like to say a word about education in general. Let us build on that which is good. As the hon. Member for Durham opened the debate, it might be a good moment to mention the two excellent universities that we have in the Northern region. There used to be only one, the University of Durham. Charles Grey, the hon. Gentleman's predecessor, who had a considerable reputation in the House and was greatly respected, took part with me in getting the necessary legislation to part the then King's college from Durham university. Now we have two splendid universities in the Northern region. The expertise and the professional and management skills to which those universities have contributed will help our industrial revival, not only in the Northern region, but all over the country.

I remind the House that the Finniston report suggested that there should be a four-year engineering course. I hope that as a consequence in May, when certain decisions are made, Her Majesty's Government and others will recognise the enormous importance of our universities to the future of our region. I also include the Newcastle polytechnic, which is playing a substantial part in providing essential skills for the further development of the North-East.

I recall the days when, in our debates in the House on the Northern region, mention was often made of the possibility of having a university of technology on Teesside. We did not get it, but we have the Newcastle polytechnic. I visited it recently, and just before that I attended its awards ceremony. We should do all that we can jointly to persuade those who are responsible to maintain our universities and our polytechnic at least at their present strength.

During last week's debate on the youth opportunities programme I sought to encourage those young people who have not yet known what it is to be employed. I happily do so again, and here I should like to develop a point made by the hon. Member for Berwick-upon-Tweed. There is a problem in encouraging the brightest children to remain at school. Children who remain at school are subsidised indirectly, in that the parents still receive some benefit.

This is a matter that is worrying headmasters, as two of them in the city of Newcastle have told me. Those who stay on at school to seek extra qualifications see their fellows obtaining unemployment benefit, and that is very disturbing to them. I sought recently to bring this problem to the notice of my right hon. and learned Friend the Secretary of State for Education and Science, and he assured me that the position was being watched very carefully.

Training for those who leave school is available to a greater extent than ever before. The youth opportunities programme has been extremely successful in the Northern region, and it augers well for the future. It is now possible for a school leaver to have a 13-weeks short training course. This can be linked to 26 weeks with an employer for work experience, and there can then be a further six weeks of training. In the North-East of England we have a better trained young work force than we have ever had in my experience, and it augers well for the upturn in the economy and the effect that it will have on our region.

There is much about the Northern region that is still worrying, but there are encouraging features. The hon. Member for Durham used the term "satellite region". There is nothing satellite about the industries of the North-East. Some of them have recently gained substantial orders. There is nothing satellite about the £8 million order for Drax B, which was won by R. P. Automation, Gateshead. In the Team Valley, Abrahams and Company has just won an export order for £1 million. These are excellent pieces of news, and they are far from being the only ones. We should not over-emphasise the gloomy aspect, because there is so much happening at the moment that is good.

The particular problem of Consett worries us all. It is no small thing when an entire steelworks is closed and no fewer than 3,500 people are made redundant. But I am sure that we all welcome English Industrial Estates' letting of the first large unit. We welcome Paul and Loughram (Gas Equipment) Ltd., which will occupy a 10,000 ft. factory in Consett. Four smaller units are already let, and negotiations for a further five are almost complete. There is interest in 19 additional factories. This is good news. This is progress. We have a long way to go, but it is encouraging.

I pay due credit also to the combined effort that is being made in the Northern region. I have long advocated it in debates of this sort. A number of conferences are being organised. Some of them will be of the greatest benefit to the region. I welcome the fact that the conjoint committee, as it calls itself, is producing a conference in the North-East in June which will bring together the CBI, the British Institute of Management the Tyne and Wear Chamber of Commerce, the Northern Institute of Directors and several bodies which in the past have worked too much apart. They are now seeking to work together. I welcome also the Industrial Trades Fair conference, which is being held in South Tyneside, for a second time.

I recently attended a meeting in our ancient guildhall in Newcastle of the merchant adventurers. The "Coaly Tyne", as we used to call it, used to be a scene of great activity, and the port of Tyne was a busy one. Sadly, in recent years, the port of Tyne has not been so busy. I am very pleased to read, therefore, of the possibility of the National Coal Board exporting a great deal more coal from the Tyne than has been exported for many years. I am pleased in this context to read of the proposed development of Jarrow Staithes. I am pleased to note that the hon. Member for Jarrow (Mr. Dixon) is in his place. I hope that the Port of Tyne authority will continue to improve its facilities. It is good to know of the second roll-on roll-off berth at Whitehill Point.

My message in the debate is one of optimism. A great deal is happening that is good. We have a great distance to go. The central problem, that of overcoming inflation, is still very much with us, but I can say with more confidence than ever before that the Northern region is ready and able to do that which it has always wished to do, namely, to take part in the economic revival of this country.

7.9 pm

Mr. Frederick Willey (Sunderland, North)

I shall respond to the appeals that have been to be brief and will confine my remarks to the subject of my constituency, Sunderland. Unlike the right hon. and learned Member for Hexham (Mr. Rippon), I shall use figures that have no political connotations.

In Sunderland, in 1965 3.7 per cent. were unemployed. In 1975 the figure had risen to 8.7 per cent. In 1980 12.2 per cent. were unemployed. That figure has now risen to 17.4 per cent. The position for men is far worse. In the past 12 years I doubt whether fewer than 10 per cent. of our men have been unemployed in any one month. At present, 21 to 22 per cent. of our men are unemployed. The number is rapidly increasing. The latest figures show that in the last month we lost 862 jobs. Soon one in four of our menfolk will be unemployed.

The Minister of State and the right hon. and learned Member for Hexham spoke about a possible improvement and recovery. I hope that they are right. However, from experience we know that any recovery will be shallow and will last only a limited time. In any event, we have to recognise that Sunderland is a large industrial town with permanent heavy unemployment.

Recently we discussed youth unemployment. In Sunderland, 1,344 young people are unemployed. Wellover 2,000 young people are on the youth opportunities programme. Despite what the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, we are losing fewer than we expected from our schools at Easter. However, a good 4,000 will leave school in the summer. Atpresent, there are about30 vacancies for the young unemployed. The youth opportunities programme was a temporary measure, but it has become irrelavent to Sunderland. Consequently, in addition to heavy unemployment, there is a sense of hopelessness among our young people.

When we turn away from statistics and look at the town, what do we find? Let me take, first, shipbuilding. We have been told that we should encourage technological industries. However, the Japanese happen to be doing very well at shipbuilding. We have probably got the two best yards in Europe, but we have lost a lot of jobs and we are worried about the future of shipbuilding. We have completely lost our ship repair industry. The port is a shadow of its former self.

Thanks to Comings, we have a glass industry, but it employs far fewer people than it used to. We have completely lost the rope and paper industries. Of the new factories, many years ago Thornes collapsed. The large Plessey factory has been lost. In addition, we have lost textile and clothing factories.

In Sunderland we are back to the 1930s. Some parts of the town are worse off than others. I have two wards with heavy unemployment. In Southwick more than 40 per cent. are unemployed. Of the population, 60 per cent. receive welfare payments. One in four households have had their gas disconnected. Over 90 per cent. of children leave school without any qualifications. The young people who are lucky enough to find jobs, get dead end ones.

I am not referring to an inner city area. Southwick was once a village, but was brought into the town just before the war. The community is enterprising. It has a very good neighbourhood project. Unfortunately, the Tories complained about it and the Government withdrew the grant. Fortunately, the borough council continued it. Later this year I shall lead the carnival. It will be held in good spirit. That reminds me of Brixton, because the situation is not dissimilar. The ravage is unmemployment. The position is intolerable and unacceptable.

We are always told that we should be more dependent on our abilities and that we should prove ourselves by being more effective. However, we have two remarkable bodies in Sunderland, namely, the liaison industrial committee and the war-for-work executive. They are complementary. The executive was set up on the initiative of the Sunderland Echo. No town in the country could have greater support from its local newspaper. These are all-party bodies. They contain Members of Parliament, members of the borough council, trade unionists, members of the CBI, as well as people from Sunderland polytechnic and Durham university. We have dealt with a host of matters. We have tried to identify the training needs of industries. We have dealt with industrial courses on microelectronics; we have provided for innovation and development. We have done all that we can for small businesses. We have promoted exhibitions. What more can we do?

Mr. T. W. Urwin (Houghton-le-Spring)

Perhaps my right hon. Friend will mention the job desk set up by the Sunderland Echo in conjunction with the war-for-work campaign, which has succeeded in providing about 150 jobs in an industrial desert.

Mr. Willey

I am obliged to my right hon. Friend. That point could be expanded. I defy anyone to find something that we have not thought about and tried. However, we are volunteers and have no executive powers. We have raised with the Government the issue of trainees and of a skillcentre, but we have not got far. Although we are pulling together and doing what we can, it is a heartbreaking experience.

About one in four of the menfolk are unemployed. That is expensive and unproductive. What can we do? First, we should recognise our failure. Regional policy has been a complete failure. Since I became a Member of Parliament I have argued that the rate of unemployment in Sunderland has continued to be twice the national average. The pattern of aid is not new. It was introduced before the war. There were then distressed areas. Now there are special areas receiving loans and grants. The Government built factories and have continued to do so. There is alleviation of our difficulties, but there is no success. Such measures did not succeed before the war. It was the war that brought an end to unemployment. We should recognise that.

I pay tribute to the concept of an enterprise zone. I do not like it much, but at least someone is thinking about different approaches. We must be more serious about the development agency, but the appointment of a Minister for the North-East is much more important. Lord Hailsham did a good job, and his report was beneficial to the North-East.

I can only repeat what I have said a score of times about Sunderland. The Government need to take the initiative and set up a commissioner charged with the responsibility of dealing with Sunderland's problems and putting people to work in the factories that we have built. We cannot afford to leave factories idle.

Our own experience is that there is much greater scope for providing the work than people recognise. We always pay tribute to the small businesses, but we need a definable, recognisable and responsible person backed by funds to put people into work.

7.20 pm
Mr. Neville Trotter (Tynemouth)

We are discussing the ongoing history of 3 million people in our region. It is a history with a great deal of success behind it. It is natural that in hard times of world recession great problems are presented by areas such as Sunderland which are foremost in our minds in this debate. The underlying problem has been with us for a long time. The North-East was built up initially on heavy engineering, steel and coal and inevitably it suffers traumatic change as world conditions change.

However, it is not only the North-East of Britain that suffers in this way. Similar regions in all the industrialised countries of Western Europe have the same problems. We must remember that the problems are not just ours.

We have achieved a great deal. I do not accept that the regional policy has not succeeded. The figures that the right hon. Member for Sunderland, North (Mr. Willey) quoted show how much remains to be done. It would have been much worse if nothing had been done. In the North-East we have had to run to stand still. We lost about 200,000 jobs during the 1960s and 1970s in the old industries. Most of those jobs were recreated in new industries and a tremendous effort went into obtaining those new jobs. It was an extremely successful effort, but it has not been sufficient to cope with the present recession.

It is a worry to all of us that nearly a quarter of the jobs in the North-East are still dependent on the old heavy industries. That proportion must be about twice as great as it is in the rest of the United Kingdom.

One cannot get away from the world picture by looking only at one part of the country. The world picture shows terrifying competiton from developing countries such as those in the Far East. It was almost a Geordie delegation that went out to those parts last summer. Three of the four hon. Members were from Tyneside. We saw people working hard for 60 or 70 hours for £40 to £45 a week. Not only did those industries have the advantage of incredibly cheap labour at a low rate per hour, but they often had the advantage of modern plant. When we visited the shipyards and steel factories in those countries we saw the most modern plant manned by people working very long hours at low rates of pay. That is formidable competition for us in the North-East and for all Western industry. We cannot escape the fact that our future in the North-East and in the Western world depends on keeping ahead of them in technological progress. The productivity in our factories is the key to prosperity in the future.

We have one great advantage in the North-East. We have perhaps been too tempted to refer to our disadvantages and have not given sufficient attention to our advantages. The one factor above all else that comes to my mind is our good industrial relations. They are exceptionally good and a tremendous asset to the area. I was encouraged when recently I read an article by the head of the TUC in the North-East. He spoke about the need to deliver goods on time, to produce goods of high quality and for people to be skilful, efficient and reliable and to produce price competitive goods. I pay tribute to that gentleman and have a high regard for him. He is a man of sense and example, and the trade union movement in the North-East takes its image from him.

On the other side we have sensible employers at the head of many of our industrial firms. The effort made by those working in and managing firms in the North-East is one of the most important factors in securing our future.

The denial of the suggestion that free market forces are being allowed to decide the future of the North-East has already been well dealt with by my hon. Friends. It is worth while to mention that 80 per cent. of the region is assisted. That is the highest percentage of any region in the United Kingdom. However, a matter that I hope my hon. Friend will deal with when he replies concerns the delay in the payment of regional development grant. I cannot see the common sense of saying that a grant may be given for capital expenditure but that it will be delayed. Surely the aim is to inspire confidence so that people will invest in new plant and by so doing will create immediate employment and greater productivity for the future.

A delay of about four months was imposed in 1979 in the payment of grants. I speak not just as an hon. Member but as an accountant. It is correct that there should be an audit of those grants. If there were not an audit, some would take advantage of the system. It is inevitable that it will probably take three to four months for that checking to take place. On top of that inevitable delay, a further delay of four months has been imposed. I find that hard to justify. I hope that my hon. Friend will explain why that continues. We are considering a one-off exercise, because it is only in the year in which the delays are removed that there will be additional cost. After that, the cost would be no greater.

I am conscious of the enormous amout of effort put in to attracting firms to the North-East by the organisations concerned. However, there is, in my view, a need for more co-ordination of the effort. We always hear arguments in favour of development agencies. The Government of the day always explain why we cannot have one. Like all hon. Members from the North-East, I have given a great deal of thought to the subject. We do not need an agency to carry out the same tasks as are the aim of the agencies for Wales and Scotland. The first of their tasks is to provide finance for Welsh or Scottish industry. There will always be people who want to start with nothing and find it difficult to raise the initial money. I am sure that that applies just as much in Wales and Scotland as it does in our part of the country. But most people do not find a lack of finance the factor that prevents them from expanding in the North-East. Finance is available from various sources and we cannot base the need for an agency on finance.

The second role of the agencies in Wales and Scotland is to build factories. That task is well carried out for us now by the English Industrial Estates Corporation and by the local councils. We are fortunate in that the corporation started on Tyneside. As has been said already, the corporation is stronger in the North-East than in any other part of the country. Factories are readily available and therefore we do not need an agency to construct factories.

The third task in Wales and Scotland is to clear land dereliction. That has been energetically undertaken, perhaps rather late in the day, in the North-East already. Enormous progress has been made as all of us who live there know.

There is, however, a need for a better co-ordination of the existing effort. We need a body that does not have the political connotations that sometimes attach to bodies already active in the North-East. For the purpose of attracting industry, it needs to be a body that is above politics.

I am pleased to say that from what I hear there is at this time effective co-ordination, mostly behind the scenes, in the pursuit of the Datsun factory. The good case for the North-East is being put harmoniously, quietly and sensibly. I am sure that much will be made of the good labour relations in the area, the supply of skilled labour and the fact that workers in the area are used to shift working. Certainly if Datsun comes to the North East it will be made welcome and will find a supply of excellent labour.

We suffer from the fact that there is no proper regional industrial framework in this country. We differ in that respect from some other leading industrial countries, including Germany, which have a system in the regions that is based more on the federal or State organisation.

The hon. Member for Durham (Mr. Hughes) made some scathing comments about foreign firms that come to the North-East. That was unfortunate. I agreed with much that the hon. Gentleman said in his speech, but I do not accept that point. In the North-East we have about 200 foreign firms from 16 countries and they have been welcome and have provided many thousands of jobs.

Last summer I visited Denmark as the guest of a Danish company and saw industries in that country. My hosts have a factory in the Blyth constituency and I was pleased to hear them speak of their high regard for Geordies, who were described as good workers, able and effective, comparing favourably with labour in Denmark. That is the sort of comment which I like to hear when I travel overseas. It made up for the bad image of British Leyland. The harm done by British Leyland in the past few years has had a widespread effect and has extended well beyond the motor industry and has damaged the general image of British industry. One hears comments from individuals who have been dissatisfied customers and from those who read the adverse press comments. Fortunately these have not been so frequent recently.

I welcome the foreign firms in the North-East because of the employment they bring. I do not think that we have suffered from their headquarters being in Minneapolis, Eindhoven and other such places. I am more concerned that we do not have enough United Kingdom firms with headquarters in the North-East. Here I agree with the hon. Member for Durham. It is an unfortunate feature of our industrial scene in the region.

We have NEI-Parsons, which has just announced good results and has a healthy order book, and the headquarters of British Shipbuilders, which faces great problems in the future, but we do not have the headquarters of enough substantial firms. The hon. Member for Durham made a fair point when he said that firms that do not have their headquarters in our region tend to cut back on the furthest flung branches, and although I do not believe that there is animosity to the North-East, it makes sense to those firms to concentrate nearer to their head offices. I should be happier if we could attract headquarters and not just branch offices.

Perhaps the best way of ensuring that we have the headquarters of large firms in the North-East is to encourage the growth of existing firms. That leads on to the encouragement of small firms, because great oaks start with little acorns. There is a formidable list of people in the North-East who are helping smaller firms. My hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliott) mentioned the excellent universities and polytechnics in the North-East. The Durham university business school is wholeheartedly supporting smaller businesses, as is the small business unit of Newcastle polytechnic. In addition, help is given by Enterprise North, citizens advice bureaux, industrial development offices, council planners and industrial development departments.

Mr. Cowans

I join the hon. Gentleman in praising the university and the polytechnic, but is he not aware that public expenditure cuts are detracting from their ability to do work that he suggests they are doing?

Mr. Trotter

It is a question whether money is being spent to the best advantage. I do not accept that we can exclude universities from the general restraints on public spending which are necessary if we are not to have higher inflation or higher taxes, both of which are harmful to industry.

Dr. Keith Hampson (Ripon)

Is my hon. Friend aware that the research and development budget for universities has remained constant in real terms and has not been cut?

Mr. Trotter

I am grateful to my hon. Friend. I was about to say that the allocation of funds within universities has not been cut pan passu throughout. The most worthy projects have been protected

In North Shields, in my constituency, the Rev. Alan Spivey of the United Reform Church was so concerned about the need to provide employment at this time of high unemployment that he set up a group in his Church with a view to trying to create work for the unemployed. He has been helped by a number of bodies, including the local council, the co-operative development group and the Action Resource Centre, which is another excellent outfit which is seconding people to give small firms the advantage of their experierce. There is a long list of groups and individuals who are helping small firms in the North-East.

The number of applications for that assistance is showing a welcome expansion. A year ago there were about 240 inquiries a month and there were more than 1,000 in a recent month. There are signs that small businesses are beginning to blossom. However, there is I believe, a need for the education system to encourage the thinking that is necessary to create the initiative that starts small businesses. That does not come through in our education system, and the country suffers in consequence.

The image of the North-East is an important factor. All of us in the area were outraged when the head of Inmos decried the North-East and said that it was not the sort of area that would attract the skilled scientists and managers that he needed. We say that he is the loser by not coming to an area with so many attractive features, but there is a problem, to which my hon. Friend the Minister of State referred, in the distortion of the image of the North-East. It is the task of all of us from the area constantly to proclaim its advantages and to remember that if we refer to the snags out words can be distorted and used against the region.

The advantages in the North-East are numerous. We have an excellent infrastructure. Indeed, it must be one of the best areas in Western Europe for transport facilities. Our road system is excellent, the high-speed trains that bring many of us to the House on Mondays are first-class, the air services are excellent, and I pay a particular tribute to those who are responsible for running the ports in the North-East. The Tyne, which faced traumatic changes as a result of the drop in the coal exporting trade, saved itself by its own efforts and the Tees is one of the best ports in the country. We have excellent industrial relations, based on the friendly attitude of our Northern people, and we have beautiful countryside.

I should like to end on an optimistic note. There is good news in the North-East, including the orders for NEI-Parsons and the comment in The Journal in Newcastle today that the North-East CBI sees a glimpse of light at the end of the tunnel of recession. There are some excellent comments in the annual report of Alcan showing how the huge smelter at Tynemouth has triumphed over adversity and had a successful year in 1980. British Shipbuilders is selling ships to Hong Kong and China, a most difficult area in which to compete.

I see no need for a mood of defeatism in the North-East. Let us not be hostile to our friends who live in the South. Let us not adopt an "us and them" attitude. Let us work together with colleagues in the South.

No longer do we in the North have the supplies of raw materials on which our prosperity was founded. However, we retain the skill acquired over the centuries. We must, and shall, match that skill with the will to succeed by our own efforts.

7.40 pm
Mr. James Tinn (Redcar)

I shall try to take less time than did the hon. Member for Tynemouth (Mr. Trotter), though it is tempting to match the length of his speech. Hon. Members have an opportunity to discuss the Northern region only when the Opposition are prepared to provide a Supply day. We then find the debate dominated in terms of time by the speeches of the few Conservative Members that the North sends to this place. I may be accused of adopting a parochial approach, but I wish to refer to my own area.

The problems of the area are general to the region as a whole, with one important exception. Teesside is heavily dependent upon basic industries—iron and steel, the industry in which I formerly worked, and ICI chemicals at Billingham and ICI plastics at Wilton. Over one-third of the work force in Teesside works in one or other of those industries, against a national average of 4 per cent. The lack of diversification that is common throughout the region makes it vulnerable to a recession. I am proud, therefore, that Teesside has achieved high standards in productivity, competitiveness and industrial relations. I can support each of those claims.

In productivity, steel at Redcar is already a success story despite the fact that this large modern plant is still under-utilised because of lack of demand. Such plants, if they are to achieve peak performance, require to be fully loaded. However, there is a good story to tell, including achievements in industrial relations, as Mr. MacGregor commented on Teesside recently.

In competitiveness, ICI will match the world except when hampered and undermined by gas and oil pricing policies in the United States, which amounts to unfair competition. I welcome the fact that the present United States Administration appear to be starting to deal with the problems. I hope that the Government will support the European Commisssion in the pressure that it is exerting on Washington for a further easement of the effective subsidies given to the United States petrochemical products industry.

In industrial relations, I mention not only the steel industry and ICI but Teesport. This is now the third largest port in the country and is likely, in time, almost inevitably, to become the largest. Part of its success is due to excellent labour relations and the sensible, practical working agreements reached between management and unions, which must be the envy of older declining ports.

Despite restructuring, which has been especially savage in the steel industry, we face job losses without any alternative employment. The figures as they affect Teesside are appalling. Our problem is sometimes hidden by tremendous capital investment, which is assumed to have brought jobs. The difference between Teesside and most of the North is that ours was the first part of the country, even before the recession, to begin to suffer technological unemployment. Massive investment in ICI and steel has been counter-productive in terms of jobs. ICI is still shedding labour. In the Teesside area, including Hartlepool, 20,000 jobs in steel have been lost since 1968.

In my home town of Consett, the loss of 3,500 jobs is catastrophic. The town is dependent upon steel. The loss of 20,000 jobs on Teesside means 20,000 homes threatened and damaged. I wish to support strongly the case put to Ministers by Langbaurgh council for an extension of special development area status to Teesside. The unemployment figures unquestionably support the claim. The existence of areas with special development area status, although with only marginally higher unemployment, so close to Teesside effectively denies the possibility of attracting many developments. Who will come to Teesside when it lacks the advantages that are obtainable a little further north or along the river? Special development area status is an urgent requirement.

The council has also asked the Government to abolish the additionality rule. I accept that this rule has been operated by a Labour Government as well as by the Conservative Government. Under the rule, funds received from the European Community for development in the region are offset by reductions in funds made available by the United Kingdom Government, thus effectively denying any net benefit.

I believe that I have been successful in my promise to speak briefly. I should, however, like to acquaint the House with the views of a constituent who has asked me to forward her comments to the Prime Minister. Her remarks are deeply moving. The lady has brought up a family of seven, two of whom are still at home, one unemployed and the other at school. Her husband has been unemployed for just over a year. His wage-related benefits have run out. She was working in a Social Services department, but after going into hospital towards the end of last year she has been unable to pick up her employment again.

The family has been receiving supplementary benefit. The husband travels hundreds of miles looking for work. He is willing to go to Saudi Arabia, as so many people in the North have been obliged to do. He attended interviews for jobs at Butlins only to find that he was one of hundreds of applicants and had no prospect of a job. The lady informs me that 65 per cent. of the family income goes on heating and lighting, leaving £19. She feels that the boy still at school and his father are suffering the most. The boy has no decent clothes in which to go to school and has poor shoes. This is all too terrible. I shall certainly pass on to the Prime Minister the letter that the lady enclosed for her. I hope that the right hon. Lady will find the time to read it, and perhaps even her heart will be moved.

7.50 pm
Mr. George Grant (Morpeth)

I welcome this opportunity to debate the economic and social problems of the Northern region. The region has the worst unemployment in the whole of the United Kingdom, except for Northern Ireland. I shall be brief, and concentrate on two or three matters that affect my constituency.

The Minister talked about the special measures that were introduced by the Government in 1979. Like Berwick-upon-Tweed, Morpeth and Blyth lost their special development area status and were reduced to development area status. At that time, unemployment was 10 per cent. Today male unemployment in those three areas is running at 14 per cent. Unemployment is such in Morpeth that any benefits in the adjoining contituencies of Berwick-upon-Tweed and Blyth will benefit my consstituency, too.

As my hon. Friend the Member for Durham (Mr. Hughes) said in opening this debate, the problems in the North-East are deep-seated. If we are to understand the problems we must consider how the situation has developed and changed. Thirty years ago, in the Northumberland coalfield there were 59 collieries and 50,000 miners. In Ashington colliery alone there were 5,000 workmen, and in the Ashington federation there were 15,000 workers. Ashington was the biggest colliery town in the world.

Today in Northumberland there are only seven pits. At Ashington colliery there are only 1,000 men. Last week one colliery closed down. Ashington is a town that was built on coal, and unless new developments are brought in its future will extend for only a matter of months, not years. During the recess, I shall go down the pit at Ashington to see for myself what is happening. I hope that money will be made available to develop the seam to keep the people of Ashington in employment. At the moment, unemployment stands at 14 per cent. in the area.

Adjoining Ashington colliery there is one of the finest colliery complexes in the world—the Ellington-Lynn complex, which produces 3 million tonnes of coal a year. I mention that because collieries have been closed all along the Northumberland coast. The villages that are left have no employment to replace coal mining. Those villages include Widdington, Broomhill, Hadstone, Chevington and Amble. About 50 per cent. of the population are affected by redundancy, early retirement, social security provisions, as well as unemployment.

The Ellington-Lynn complex works six miles out under the North Sea. Recent borings have shown that there is a bonanza of coal off the Amble coast. In the High Main seam, there are 15 million tonnes of coal. The seam section between 36 in and 60 in—the Low Main—has 30 million tonnes. The Brass Thill, at 26–120 in, has 90 million tonnes. The three-quarter seam, the Victoria and the Marshall Green give a total of 250 tonnes.

I appreciate the difficulties that face the National Coal Board. But there are 39 million tonnes of coal in the ground. New capacity is where the cream is. However, in the national economic interest some geographical consideration should be given to providing new capacity. The position in our three constituencies is such that this coalfield must be developed because of the high unemployment in the area and the need there for new power stations. At Blyth, we have Blyth A and B—coal-powered stations. The station was started in 1959, and when it opened it was expected to last for 25 years. It is still going. Now the Central Electricity Generating Board proposes to build a nuclear power station at Druridge Bay. However, the local people object to that proposal. That resistance, since the Three Mile Island incident, has turned into anger and fear. Moreover, the nuclear power station is to be sited on a popular beauty spot and there is a population of 200,000 people within a radius of 10 miles of Druridge Bay.

Mr. Kenneth Lewis (Rutland and Stamford)

I thank the hon. Gentleman for giving way. It has been suggested that there should be a coalfield in the Vale of Belvoir, but I am not aware that the miners or the National Coal Board are worried about its being a local beauty spot.

Mr. Grant

I shall not go into that matter. I have been used to pit heaps all my life, but what is more important to me is full bellies.

The building of the proposed power station is against the wishes of the local authorities. The Minister told those of us who represent constituencies in the North-East that we should tell people outside about the good aspects of the area to attract industrialist, management, executives and their families to come to the area. But I put this question to him: What industrialist, manager, or executive would want to move to an area where industry is so badly needed and where there is the shadow of a nuclear power station?

The coal is there in Northumberland. There is an existing site, and the land is available. The land was bought for the C station at the same time as it was bought for the A and B stations. I ask the Government to do two things. Let them forget about the nuclear power station. It is a waste of money to proceed further. Let them tell the CEGB that we want a coal-fired power station, and get on with the development at Amble to provide the much needed employment on the North-East coast.

Mr. Bernard Conlon (Gateshead, East)

My hon. Friend has expressed most clearly his sincere views about the nuclear power station. However, he must recognise that the nuclear industry provides thousands of jobs in the North-East. If the policy that he is advocating tonight were accepted, those jobs would be lost for ever.

Mr. Grant

I hope that my hon. Friend has followed my reasoning. I am not against nuclear power for the sake of being against it. I am posing the question: is it right to have a nuclear power station within a 10-mile radius—bearing in mind Three Mile Island—of such a heavily populated area?

What I am proposing is a coal-fired power station. The power plant industry will get the benefits of a coal-powered plant in the same as it would from a nuclear plant. There is social capital tied up in the Druridge Bay area in houses, roads, schools and communities, but there are few jobs. We need to attract new industry. A nuclear power station there would dissuade everyone from wanting to go there.

The construction industry has been going downhill in the Northern region for five years. The Royal Institute of British Architects conducted a survey recently. The work that architects have on the table for the fourth quarter of 1980 is down by 27 per cent as compared with that of he fourth quarter of 1979. With the slide that has been taking place in recent years and is continuing, unless something is done the construction industry in the Northern region will go out altogether.

I ask the Government to consider the matters that I have mentioned: the construction of the power station, and the go-ahead for the National Coal Board to develop, for geographical reasons, a coalfield which may not be attractive but which, for the reasons that I have given, should be considered.

The recent improvements in redundancy pay, early retirement and transfers are good things for men who have given a lifetime to the industry. However, I hope that the Government do not think that this is the answer to pit closures. What helps pit closures to be more bearable is the development of new capacity.

The time has come to stimulate the economy. The £15 billion that is being used to pay unemployed people should be used to revitalise British industry. The trouble with the Budget was that it took money out of people's pockets so that they had less money with which to purchase things. This can only mean fewer jobs. This morning I spoke on the telephone to the employment exchange manager in my constituency. I asked him for certain figures and asked what news he had of future job prospects. He said that he had done a survey of every firm in the travel-to-work area and that he had had no response. No firm had said that it was expanding or expecting an increase in jobs. That is the picture in my constituency.

I ask the Government to consider seriously the matters that I have raised.

8.4 pm

Dr. Keith Hampson (Ripon)

The debate has shown that there is a great sense of responsibility and concern on all sides. If Conservative Members keep coming back to the matter of inflation, that is not because we believe that unemployment is a lesser evil—it is not. We are saying that unless we can lower inflation it will be impossible to lower the levels of unemployment. Looking at the 1960s and 1970s, one realises that there is a relationship between mounting inflation levels and mounting unemployment.

In the North-East, to a fair extent our success is determined by the success of the economic strategy for the country as a whole. Central to that is the process of reducing interest rates so that we can ensure that however fragile, slow or delayed the upturn is, companies can be successful and make something out of that upturn. They are slimmer and have fewer manning problems. There is a greater sense of realism in industry from the point of view of both management and trade union practices, and so on. With de-stocking coming to an end, and with the savings ratio changing, I believe that that upturn will occur.

The hon. Member for Redcar (Mr. Tinn) showed very vividly the tremendous investment in his constituency. He mentioned the iron ore terminal, steel, Imperial Chemical Industries, and so on. With the motorway programmes that we have had in the North-East we have virtually unrivalled transportation facilities compared with anywhere in Europe. We have the metro link in Newcastle and all the tremendous investment that has gone into the North-East,

It is virtually 20 yeas since my right hon. and noble Friend the Lord Chancellor, Lord Hailsham, was Minister with responsibility for the North-East, yet still the basic problems exist. It is still a declining region in terms of employment. Not to make too much of a partisan point, whatever the approach, and whoever the Government, the problem has existed. I have just checked some figures. Under the last Labour Government, Teesside saw an increase in unemployment of 98 per cent. Poor Hartlepool, always a black spot, saw almost a 120 per cent. increase in unemployment between 1974 and 1979. Therefore, the problem is always there, whoever be the Government and whatever the approach. Why? Because of the over-reliance on major traditional heavy industries. It is clear that those industries will continue to run down, and that is where the nub of the difficulty rests. Obviously, despite what the hon. Member for Durham (Mr. Hughes) said, we must pursue a regional policy that draws in companies from abroad. Surely it is fundamental to bring in new investment from wherever possible. As so much of it lies in Germany, America and Japan, that is where we must search for it.

There is another statistic. In addition to having new major oprations as well as the traditional ones, we must, as many hon. Members have said, have more of a small industry base. We need a better mixture so that we are not over-dependent upon any one sector.

I think that the North-East has a lower proportion of total income coming from self-employment than one finds in any other part of the United Kingdom. How can we stimulate and develop that? Clearly the Budget offered a great deal in terms of new start-up schemes, but it was a disappointment in a number of ways to business men in the Northern region. For example, it did not help those major industries that are heavy consumers of energy. The region is a very high energy consumer. As my hon. Friend the Member for Tynemouth (Mr. Trotter) said, the Budget did not meet the needs of those small companies with potential and which are eligible for grants but have had them delayed by four months. They are often phased grants, with each phase being delayed by four months. My hon. Friend the Minister has such an example that I put to him, of a company whose managing director lives in my constituency.

It is important that whatever we do to encourage new companies to appear, it is the companies that already exist and have potential for growth that are helped so that they are successful when the upswing comes and so can mop up some of the dreadful unemployment.

I should prefer to have seen a better psychology in the Budget. An extra percentage point off interest rates was the key thing. If we could have reduced interest rates by another percentage point, the whole climate would have been so much better for business.

Specifically, we must look at our grant system to see whether we can refine and improve it. It comes back to the crux of what a small company needs in order to get bigger. It needs money for investment. Money is extremely expensive today. So first let us deal with interest rates. But we also have a grant policy. It provides ready money. Many of the high pockets of unemployment—not just in the North-East—are omitted from the regional aid system. We must assess whether we can use the money that is available in a slightly different way.

It might be better to be more generous with the grant but gear it more to specific black-spots areas and to impose a time scale—for example, a proviso that the special grant for such areas will last for only a year or 18 months. That will bring forward potential expansion and development that otherwise will not come in the crucial period that we shall run into at the end of this year and next year. It is important to bring forward as much investment and development as possible so that we do not hit the ghastly total of 3 million unemployed throughout the nation and the acute level that we would suffer in the North-East.

Instead of taxing the banks, I should have preferred the banks to operate a scheme to provide cheaper interest rates for companies that are in the special areas that I have mentioned, to make it possible for them to launch programmes that create new jobs.

Mr. Cowans

I accept the argument on behalf of small firms, but does the hon. Gentleman accept that at a stroke the region is losing large firms with 1,500 employees? Even if we had hundreds of small firms with about 10 employees there would still be a net loss to the region.

Dr. Hampson

I have accepted that. I have said that we shall not find a solution to the problem of mass unemployment by small company start-up schemes. First and foremost, we must have a lowering of interest rates to help all companies. In addition, we must have special help to enable potential investment to be brought forward; something that will boost the confidence of the business man in a smallish or medium-sized company that could expand. We must not concentrate only on the man with two employees who could have four or five employees. There are many medium-sized companies that could take on new work and expand, but they are hesitant about doing so largely because of the cost of money and concern about potential markets if the necessary investment is undertaken.

The other striking statistic in the North-East is related to the dependence on basic traditional industries. The region is greatly dependent upon craft jobs. It is an appalling statistic for the nation that over the past seven years it has lost 600,000 semi-skilled or limited-skilled jobs. Bearing in mind the pace of technology throughout the world, this presents a major problem for the Northern region, which has a disproportionate number of craft and limited-skill jobs. Britain has tended to downgrade the importance of training and vocational preparation for young people covering the end of their time at school to their first few years in employment.

If we are to keep abreast of technology and developments in other countries we must examine their systems. It is a competition not only between companies and products but between education and training systems. In this country we have not had a clear framework for providing key skills in growth areas and for handling the considerable problem presented by young people in their final years of school and the period that immediately follows when they are in the job market.

In Britain, 44 per cent. of young people leaving school go into jobs where there is virtually no systematic further education and training. In Germany only 7 per cent. of those leaving school receive no education or training, and in France the figure is 19 per cent. That highlights the problem. I urge my right hon. and hon. Friends in the Department of Industry to get cracking and to implement the Finniston report. What has happened to thatreport?

Of course, that is only part of the problem. The Department also has a vital role in ensuring that the Department of Employment, which, as the sponsoring Department, handles the training boards, achieves the right structure. There must be some sectoral support for industry. For example, someone must cover the problems of the car industry or the steel industry. But, in addition, there must be a localised system. We must examine closely how we can reshape the special programme boards of the MSC so that the problems of the locality and the region may be met by the provision that is available, whether it is in local education authorities, careers services, or the MSC joining with employers and trade unions.

There must be a combination of a certain amount of sector-ITB support, together with a new regional or local structure. We do not need a glib catch-all solution, such as a Northern Development Corporation. We must identify the problem and set up the systems that will cope with it. There is nothing in the development corporation idea that leads me to suggest that we would be able to cope with any of the problems any better than we are—whether it be in terms of national investment in the infrastructure, or what we are already getting from Europe, or in any other of the key areas that can be identified but for which we do not have the necessary approach or systems.

Of course, we in the North must help ourselves. I agree that we have done a great deal. I do not begrudge any of the efforts that have been made over many years by everyone in the North-East. However, sometimes we do not help ourselves. Some of the councils do not help much at times. There is Langbaurgh, with its excessive manpower levels, and Newcastle, with its massive commercial and industrial rates. In Newcastle, I understand that there is a rate poundage of almost 230p—far ahead of almost anywhere else. Hence of course, the importance of the enterprise zone on Tyneside.

Mr. Robert C. Brown (Newcastle upon Tyne, West)


Dr. Hampson

I promised to be brief. I am sure that the hon. Gentleman will be able to advance his argument in his speech.

High rate levels have a depressing effect on jobs. Companies in the enterprise zone will be freed from the rate burden. I hope that we shall be able to stimulate a new growth area that is free from that burden.

Our polytechnics are good. However, the way in which they have been handled by some local authorities, such as Teesside, means that they are not as good as they might be. The polytechnics are a major national resource as well as a regional one. We cannot afford to have these institutions at the mercy, or at the whim, of the political and financial pressures of local authorities. It does not follow that the institution is better able to meet the needs of a locality because it is owned by the local authority. Robert Gordon college in Scotland meets the requirements of the local community and the oil industry even though it is funded by the Government in the form of the Scottish Office.

It is important that we get the system right. The polytechnics are too important to leave to local authorities. We must ensure that the money that goes to them is directed to technician-level. courses of the type that the nation has lacked over many years. We must ensure that the system of funding prevents resources from going into all the other courses—alreacly well provided in universities and colleges of higher education—which should not be primarily the job of polytechnics.

Mr. Brown

The hon. Gentleman referred to Newcastle's rates. Newcastle is the regional capital and it has more than its share of problems. The hon. Gentleman then referred to education. 'One of the major industries in the North-East has recently given a cheque to one of the universities. If the Government get cracking with the Finniston report, they will be able to use that cheque.

Dr. Hampson

I take the hon. Gentleman's point. As he knows, I have long been concerned about getting the Finniston report moving. The Government's lack of response is disappointing. The fault lies not only with the Government. The real culprits are the professional institutions and particularly the Council of Engineering Institutions. They are stymieing the Government's efforts. I should like to see the Government putting in the boot and get cracking with a system that has statutory backing.

Although we talk about the problems of the localities and the region, it comes down to the overall economic strategy and its hoped-for success. It comes down to getting the national provision right, whether it is the polytechnics we are talking about, technician training, or grant-aid, or whatever. We should not just be viewing these things as parochial matters, just because we are North-East Members.

8.19 pm.

Mr. T. W. Urwin (Houghton-le-Spring)

A week ago the Palace of Westminister was quietly but effectively invaded by hundreds of trade unionists from the Northern region, and not for the first time. On this occasion they came to remind us that every day since May 1979 2,500 people in the United Kingdom have become unemployed and have signed the register. They came to tell us of the bitterness, anger and frustration of the people who are now in the dole queue. There is the fear and apprehension of the thousands more who stand on the threshold of redundancy and all that that holds for them. They came to tell us that in 1980 46,500 redundancies were declared in the Northern region alone—double the figure for 1979.

At present, job losses are measured at the rate of 1,000 a week. There are massive job losses in the manufacturing sector of industry in the Northern region. Our seed corn is literally being wasted. The new industries which are coming into the region are not by any means compensating for those losses.

The press and media have focused the attention of thousands of people in the Northern region on the debate today. There are people who understandably expect that someone will be able to wave a magic wand so that new jobs are provided and the dole queues are reduced.

As my right hon. Friend the Member for Sunderland, North (Mr. Willey) said earlier, my local newspaper is running a campaign called the war-for-work campaign. Another newspaper is circulating a questionnaire amongst its readers. I have received many of those during the past few days. The questionnaire asks three questions. The first is: Do you agree that unemployment is the most serious problem facing Briain? The second is: If so, what are you going to do about it? Those questions could have been sent to the Prime Minister, to the Secretary of State for Industry, and to the Chancellor of the Exchequer, because the third and most important question is: Would you support a major new programme of public investment to get Britain back to work? My answer to that question is a resounding "Yes", as other colleagues of mine have said.

I should like to say what my shopping list is. It is more lengthy than that of the hon. Member for Berwick-upon-Tweed (Mr. Beith). I wish to suggest to the Government some of the major contributions which they can make towards reducing the dole queues and getting people back to work, remembering what the Prime Minister said during the last election campaign, that Labour was not working. By Heaven, Toryism is not working either, to a far greater extent than could have been said about the last Labour Government.

One major contribution that the Government can make is to relax the crippling monetarist policy pursued by them over the past two years. There should be a further reduction in the minimum lending rate in order to increase profits. I believe in profit making, because profit provides the ability to reinvest and invest more than is being done now, as the right hon. and learned Member for Hexham (Mr. Rippon) said.

Other policies have been superimposed on the economic policies. The Government have imposed a stranglehold on local authorities. There should be a restoration of democratic control to the elected members of local authorities. They should have complete autonomy, to which they are entitled.

Mr. Campbell-Savours

My right hon. Friend said that there should be relaxation in the monetary strategy. I do not believe that that would resolve the problem. Is not the problem far greater? The monetary strategy has been relaxed because the Governent are off target. They have overshot that target. The money which we demanded last year has been brought into the economy. The whole strategy of the free market is failing. That issue is far more complex.

Mr. Urwin

I entirely agree with my hon. Friend. Perhaps he will be patient, as I shall come to that point. He may have saved some of my time as well as adding a few minutes to it.

A much better climate for house building should be created. Here again I agree with the right hon. and learned Member for Hexham, who called for additional public expenditure for housing and building, as the Government have always been the biggest customer of the building industry.

At Question Time today we again saw clear indications that the Government's housing policy is based almost exclusively on selling council houses rather than on putting building operatives to work and building new stock in the public and private sector.

I want to see the development of a much stronger and more realistic regional policy, properly co-ordinated. I want to see not only further diversification of the industrial base in the region. Like many others, I want to see other aspects of infra-structural development in broad comprehensive terms embodied in a strong regional policy. I want to see a Northern regional development agency. Every one of us on these Benches has been fighting that battle for a long time. It is not enough to say that we get more money than Scotland or Wales. We do not have the institutional resources that they have. The Sunderland district council made representations to the Minister about establishing a development agency, and his reply was that we should help ourselves. In the North that is done not only by local authorities but also by those elected to them.

My hon. Friends the Members for Easington (Mr. Dormand) and for Durham (Mr. Hughes) have reservations about having a Minister for the North, but no one can belittle Lord Hailsham's tremendous contribution when he had the appointment. I, too, held the position for a short period of seven months and can testify that there is tremendous value for the region in having its own Minister. For instance, it would help with the Nissan project.

I want to see a national economic plan to aid recovery. It is no good pepper-potting here, there and everywhere. We need an objective. I want to see the establishment of a national investment bank using North Sea oil revenues to sponsor industrial and economic development in the region. If necessary, I want to see pension funds with unlimited financial resources harnessed to achieve the objectives. I want to see a strengthened National Enterprise Board—not a fragmented or truncated one, as we have now. We need a stronger NEB, as conceived by the previous Government, at least aspiring to the ideals set for it. It must have adequate funding in order to make a real impact on the Northern industrial scene.

I hope that the Minister has taken note of everything said in the debate. Many of us could have spoken for hours about the region's requirements, but let us hope that the Government will learn the lessons quickly.

8.27 pm
Mr. Ian Wrigglesworth (Thornaby)

I agree very much with the right hon. Member for Houghton-le-Spring (Mr. Urwin), and I hope to develop some of the points that he made.

Just over a year ago I said that we faced the horrific prospect of having 150,000 people unemployed in the Northern region. We now face the prospect of 200,000, with 188,000 unemployed at present. It was said earlier that we can spend too much time on statistics. No one from the North is unaware of the horrific facts behind the figures. Some time ago I published letters written to me by people in the region outlining their experience of life on the dole—broken marriages, strain within families, children sent to school without proper clothing, the prospect of Christmas with not enough money for presents and all the other humiliations of being unemployed. I think that we are all aware of the real human facts behind the figure of 188,000 unemployed in the Northern region.

I wish to say something about the position on Teesside, following what was said by the hon. Member for Redcar (Mr. Tinn), then deal briefly with some of the national implications, and finally say what we in the region might, and I believe should, do.

First, as the hon. Member for Redcar said, Teesside has something of an image for having many new industries and much capital investment in new industries, and of course that is true. In recent years the area has been the recipient of the highest level of capital investment of any county in the country. But it now also has the highest level of unemployment in the country, barring the Western Isles. I do not think that the level of unemployment is always appreciated, even in the region. In Middlesbrough, the largest part of my constituency, we have reached, and indeed gone beyond, the sad state to which the right hon. Member for Sunderland, North (Mr. Willey) referred, where more than one in four—26 per cent.—of the male work force is unemployed. That is 14,000 people. In the county as a whole, 3,375 young people are unemployed. That is over 150 per cent. higher than the figure in 1978.

The situation in Cleveland is as desperate as in any part of the region or, indeed, of the country. That is why, in recent times, together with others in the Northern region, we have been pressing for the Datsun plant to come to our area, and I am delighted that two of the sites that we suggested are being considered. I very much hope that the plant will come to the Northern region—not just for the jobs, which of course are the main benefit, but because I believe that it will be an enormous boost to the moral of the region and a vote of confidence in the work force, the industrial relations record and all the attributes of the region that we know so well. Those factors are well know in some parts of the world, but if we had that plant I believe that we could demonstrate what we can offer to international companies of that kind.

I was a little worried when the hon. Member for Durham (Mr. Hughes), in opening the debate, referred to the region as a satellite economy. I believe that we must attract companies from all over the country, and indeed from all over the world, to build their plants in the region.

Mr. Dormand

As reference has twice been made to my hon. Friend the Member for Durham (Mr. Hughes) on the same subject in his temporary absence I should like to clear the matter up. He did not say that we would not welcome foreign investment in the Northern region. His point was that the decision-making took place outside. I think that hon. Members on both sides will agree that there are problems with closures. I wish to clear up that point, because I should not like the impression to be given to the Government that the Northern region does not welcome bona fide foreign investment

Mr. Wrigglesworth

Of course I accept that. I shall come to decision-making towards the end of my remarks.

We must face the fact that the problems of our region, and indeed of others facing great difficulties at this time, will not be solved unless we can break away from some of our past activities, particularly in the political sphere, but also in the economic and social spheres. Ding-dong battles have been waged continually over the years between those who support nationalised industries and those who support private enterprise, each seeing no good in, and continually attacking, the other.

The continuing difficulties that we have had in getting a settled system of pay determination in the country that will give the sort of economic stability that is a precondition of growth in the economic area are becoming increasingly serious. If we are not able to obtain a national consensus on that and on the other factors that have divided the country over the last three decades, we shall not make the sort of progress nationally that is a precondition of our getting the growth and the jobs in our own region.

I want to go into this question of decision-making in the region and to follow up some of the remarks that have been made, particularly on the question of the Northern Development Agency. I think that, as the hon. Member for Durham said, the basis on which our economy was built was the indigenous capital within the economy, the people in the economy—the Peases, and he mentioned the Palmers. I could go through a whole list of names of the people who started the Stockton and Darlington railway, the mining, the engineering and the other industries in the area, which were very largely home-grown industries.

If we want to bring about that sort of thing and ensure the accountability and co-ordination of the bodies that have proliferated in the region over recent years—the Northern National Enterprise Board, the Northern Economic Development Council, the Northern Economic Planning Council that we used to have, the proposed Northern Development Agency, which I strongly supported, the English Industrial Estates Corporation, COSIRA—we must go one step further than people in the region and nationally have been prepared to go so far.

If we are to go down that road, I hope, and my colleagues hope, that we shall go for greater decentralisation from Whitehall, and Westminster and give power to the people in the Northern region; pull it back from Whitehall and have an elected body in the region to give the thrust and provide the creativity and the control in the region over these activities.

I and my colleagues are very strongly in favour of decentralisation and of devolution to Scotland and Wales. I know that some hon. Members on the Opposition Benches are very much opposed to devolution to Scotland and Wales. They should think about devolving power to the Northern region in the same way as to Scotland and Wales. I have always supported devolution to Scotland and Wales. Instead of opposing that it would be better to support it, and at the same time to support devolution of power to the Northern region, to give more democratic control over all the bodies that have proliferated and thereby bring together the creativity, the abilities and the resources that we have within the region, in order to stimulate the industrial, economic and social development that we all want to see.

8.38 pm
Mr. Kenneth Lewis (Rutland and Stamford)

I have sat through the whole of this debate, and I wish to make a contribution for a particular reason. The hon. Member for Durham (Mr. Hughes), who opened for the Government, talked about Jarrow.

Mr. Urwin

On a point of order, Mr. Deputy Speaker. With all due respect to the hon. Gentleman, what interest does he have in the Northern region? This is an Opposition Supply day. The subject for debate was chosen by the Opposition, and it is essentially a Northern region debate. Although the hon. Member was born in the North of England he certainly does not represent a Northern constituency and there are Members here who have been waiting all day to speak in the debate.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

The hon. Member has been here throughout the debate. I hope that he will be very brief indeed.

Mr. Lewis

I hope that my remarks will be helpful to the Northern region. I was in Jarrow in the 1930s. I was chairman of the local Young Conservatives and I saw the Jarrow march. I am concerned about the region. I have a love for it because I was born and brought up there.

The problems of the region are repeated throughout the country. The unemployment problem in the Northern region will be solved when it is solved throughout the country. No Government can survive an election with 3 million unemployed. Some officials in industry and banking and on the fringes of Government predict that unemployment will rise to between 3 million and 3½ million If that happens, I shall fall out with my Government. Nevertheless, I do not believe that the Government are the cause of all the unemployment. Unemployment is caused mainly by the world situation, the price of oil and a number of other factors. However, the Government must at least try to hold back the rising tide. I cannot regard the prospect of its continuing to rise to unacceptable levels in the next 18 months with any enthusiasm. Unemployment must somehow be made to move in the other direction.

The Minister provided an effective catalogue of Government measures already operating to help the North-East and the country as a whole. I was delighted to hear him wax enthusiastically about what the Government have done. He said that he recognised that the market cannot do it all. That was something of a mini U-turn for him. Perhaps that attitude will be reflected throughout the Government. It represents a move towards more action—and the Government have already done a great deal—to try to improve the industrial and economic position of the country and, therefore, of the Northern region.

The Government can use their power, influence and resources in many ways. Countries such as the United States, Germany and France are using Government power to help in the recession. Many Governments of capitalist countries support industry. There is no reason why a Conservative Administration here should make excuses for assisting in the improvment of the country's economic condition or for helping individual industries. That can be done in a number of ways.

First, with the support of the Chancellor of the Exchequer, the Government can use research and development programmes. Secondly, they can use capital investment programmes in the nationalised industries and Government Departments. Some could be on a national level. The Government should also get involved in short-term capital programmes, including some for the Northern region. We must take the country through its difficulties until the world recession ends. There is much to be said for the Government committing themselves to short-term programmes to deal with our present special situation. If there is an upturn in world trade, these capital programmes will not then be required. Industry by itself will be able to employ more people.

The Department of Industry can also assist by using that sleeping quango, the National Enterprise Board, which has been retained but which the Government are hesitant about using. The NEB can do a great deal by using both money and resources to back up our new technological industries. During my grandfather's time, and to a lesser extent my father's time, the North was in the vanguard of the motivating industries behind the British industrial effort. I should like to see the North again lead the field in new technology. I hope that the Government, perhaps through the NEB, will encourage and support companies to go there.

Do not let us apologise for the fact that the NEB should be used. There is no point in retaining it if it is not used. It will have failures as well as successes. Of course, we do not want to spread money around for the sake of it, but the Department of Industry should try to make certain that money is allocated to enterprises that are likely to be successful.

In many ways I am sorry that during the last year or so many good companies have got into difficulty when they should not have done. I refer not only to companies in the North-East but to firms in many other places. The Government and the Department should pay special attention to companies which are marginally in trouble but which with support could stay in business.

My right hon. and learned Friend the Chancellor should recognise that a company which employs people contributes to the Exchequer. The company itself may not pay much tax. Corporation tax is easily avoided. However, those employed by any company pay large sums of money to the Exchequer. They do not do so when they are on the dole. Therefore, there is a lot of virtue—and value to the national effort—in ensuring that companies in the North-East and elsewhere remain in business if possible, so that when times get better they can expand and employ more people.

8.48 pm
Mr. Bernard Conlan (Gateshead, East)

We are drawing to the end of the debate and a number of my hon. Friends still wish to speak. I shall therefore deal with only one problem which affects my constituency. More can be done to assist industry, and I do not think of additional financial support. My thoughts lie in another direction. What I have in mind can best be illustrated by relating the recent experiences of three firms in my constituency.

The first is Osram-GEC, which manufactures lamps of all descriptions. During the middle of last year, because of the flood of imported vehicle lamps from Eastern Europe and the Far East, the Osram market was completely undermined.

I have drawn Ministers' attention to the unfair practices in regard to the importation of the lamps. I have also drawn attention to their inferior quality. At long last, after many months of pressure, the Under-Secretary of State for Transport—a Minister for whom I have the greatest respect—has now decided that he will have consultations with the industry to lay down a code of conduct that will prevent these inferior, low-quality lamps from coming into this country. But if the discussions with the industry are not concluded quickly, there will be no lamp industry in this country to protect, so speed is of the essence.

The second company is a large international company called International Paints. It has developed a product which is revolutionary of its kind. It is a compound for the treatment of ships, to prevent corrosion. It is known as "Intersmooth SPC". The company is selling the compound throughout the world. It is being sold to the Norwegian, Danish and Spanish navies. The American navy is using the product to treat five warships.

For four years I have been trying to persuade and cajole the Royal Navy into using the product. I have been doing all sorts of things, regular and irregular, without much hope of success. The Royal Navy has treated one frigate that has recently been built on Tyneside, and apparently the tests will take two years. In the meantime, the company's prospects of marketing the product overseas are undermined, because it cannot claim that the Royal Navy is using its product. Something should be done about it.

The gravest problem concerns the third company that I want to mention. I left London yesterday to meet on Tyneside the joint shop stewards committee of the Marconi Radar Company. The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the problem earlier today. This company manufactures high-quality radar for both civil and military purposes. It has learnt recently that the Ministry of Defence is about to cancel a contact on which Marconi is currently working and to buy equipment from Holland, of all places.

This is not a precedent; it has happened before. The Civil Aviation Authority, when purchasing equipment for the civil airports, entered into a contract with Marconi. It laid down the specifications. Marconi was working to the specifications laid down by the Civil Aviation Authority, but at the last minute the authority decided that the specifications were wrong, and that the only place where it could get the radar off the shelf was from the very same firm in Holland.

Bearing in mind that very unhappy experience, on this occasion Marconi, ever mindful that the same thing could happen again with the radar for the Navy, has been developing radar equipment which is equivalent to the Dutch equipment. It is now able to offer to the Royal Navy an equivalent radar system, competing in weight, in efficacy and price with the. Dutch equipment. Therefore, there can be no possible justification for buying the equipment overseas when the criteria laid down for the equipment can be met by a British contractor.

When our foreign competitors see the folly of our actions, they must laugh their heads off. They must be astonished at our incredible stupidity. We are damaging our indigenous industries in buying from overseas. If that continues for much longer, the experienced and skilled teams of both designers and manufacturers will be broken up and will never be restored. That is a serious threat to the industry.

I understand that a decision will be taken in May. Therefore, it is essential that the Government should tell someone in the Department to buy British. Last Thursday, the Prime Minister replied to a question from my hon. and learned Friend the Member for Leicester, West (Mr. Janner) on the subject of Marconi. She said: We try to buy British wherever possible and make strenous efforts to do so even on some occasions when it costs just a little more."—[Official Report, 9 April 1981; Vol. 2, c. 1111] We all concur with that. But words are not enough; action is drastically needed.

8.55 pm
Mr. D. N. Campbell-Savours (Workington)

From my constituents' point of view, this debate is a little premature. However, I am grateful to my hon. Friend the Member for Easington (Mr. Dormand), because he pressed for it.

The debate is premature only because last weekend The Sunday Times printed an article which suggested that there would be 1,200 more redundancies in my constituency. If such redundancies should occur in addition to the announcement due about school leavers and the redundancies that have been announced at Condura and other factories in my constituency, unemployment may rise from 14.1 per cent. to nearly 20 per cent. by July. In other words, in the 26 months since the general election—when unemployment accounted for 2,164 people in my constituency—unemployment will have risen to nearly 6,000.

Such redundancies mean that the Workington travel-to-work area has one of the highest unemployment rates in the whole of the United Kingdom. The problems of unemployment further aggravate the special problems that affect young people. I must express gratitide to the Labour Government and to this Government, because they have persisted with the youth opportunities programme. YOP schemes have been of vital importance and have ensured that many young people in West Cumberland have had an opportunity to work.

In my brief contribution I appeal to the Government to think deeply about the possibility of increasing youth opportunities programme allowances. I have carried out research. Letters were sent to 126 district and county authorities in special development and development areas. Of those who replied, 79 per cent. maintained that the materials allowance available under the youth opportunities programme represented a major impediment to the formation of an adequate special measures programme entailing YOPs. The authorities informed us that another major impediment involved the transport charges made to the places of activity for YOP personnel. In development and special development areas, the Government would do well to consider giving special concessions to young people.

The Parliamentary Private Secretary to the Minister may be aware that the West Cumberland Training Association communicated earlier this week with the Under-Secretary of State for Employment. It drew his attention to a scheme that it was promoting on the basis of traineeships. The traineeships involve setting up modules that incorporate several activities which will be highly beneficial to young people. Those activities will involve general work experience, further education day release and the possibility of training in workshops that have been set up by local authorities and others. They will also involve general preparation for work.

As a step up from the national YOP arrangements, the Government might consider introducing traineeship schemes on a higher rate of grant support from central Government through the Manpower Services Commission. Young people could then be given wider opportunities for industrial and social training.

Last October I sent a letter to the then Minister of State, Department of Industry—Lord Trenchard. I argued the need for a number of new initiatives to be used not only in my travel-to-work area of Workington but in the county of Cumbria as a whole and in a wider area of the Northern region. I asked for additional funds to be made available to the district authorities of Allerdale and Copeland for the formation of an industrial development unit to help us to promote ourselves in the absence of special development area status which was removed by the Government shortly after they took office.

I put a 12-point programme of demands to the Government. Not one of those demands has been satisfactorily responded to. I sought a regional energy pricing strategy. That factor was missing from the NEDO energy report, but it would have meant that in the regions industrial operators could have purchased energy at lower prices than those applicable in other parts of the United Kingdom.

I also sought interest rate subsidies against factored invoices on the basis that a facility should be made available to every company in a development area with a ceiling of interest rate subsidy. That would ensure that the largest companies gained the least and the smallest and start-up operators would gain the most.

I also sought the formation of newly designated development areas—I referred to them as special development localities. They would form areas smaller than the current travel-to-work areas, which are the designated areas for assisted area status. In the special development localities there would be many incentives that are available within special development areas.

I sought a number of other measures including special grants for the conversion of old industrial premises, rate relief for industries in the development aeas, and a selective programme of regional public works. I hope that as the Secretary of State cannot attend the debate he will reply bycorrespondence to many of the points made by my right hon. and hon. Friends.

9.2 pm

Mr. W. E. Garrett (Wallsend)

The debate so far has shown a rather cosy attitude about employment prospects among Conservative Members. I share the view that the increase in work which has allegedly taken place in the region is temporary and likely to remain so.

The Minister of State mentioned new orders in shipbuilding and an order book of seven vessels. However, Lloyd's List of Wednesday 1 April shows that at the same time the Japanese had orders for 31 ships—a total tonnage of nearly 2 million. The subsidy from the Japanese Development Bank for those ships is between 65 per cent. and 75 per cent. That is the type of work we must provide in our area if we are to keep the jobs. The money would be much better spent on those jobs than on paying unemployment benefit.

I draw attention to last night's edition of the Newcastle Evening Chronicle. The story "Crime on the Dole" concerned the chief constable of Northumbria's annual report. It said: Northumbria is now fourth in the national crime 'league'. And Chief Constable Mr. Stanley Bailey links the increase in crime to rising unemployment … 49 per cent. of detected crime was committed by people who were unemployed. So far, the young unemployed in the Northern region have been docile. It may not have dawned on some of them that they may never work in their lives because of the introduction of robots and new technology. Yet we provide no facilities for conditioning them to that possibility.

It was claimed that high unemployment, the lack of job prospects and bad housing caused the riots in Brixton at the weekend. The same circumstances exist in the North-East, and I warn the Government that they should not be too complacent about the fact that the young unemployed are quiet at the moment.

Some weeks ago, there was a demonstration against unemployment in the Northern region. I have seen better, but it was an indication of the anger, frustration and fear felt by the unemployed. We must do something to help them. I pay tribute to the Newcastle trades council, which has provided a centre for the unemployed. The council depends on funds from local authorities and voluntary subscriptions from trade unionists and other sources. It has been claimed that the activists at the centre are militants, and they are not necessarily members of the Labour Party, but they are trying to help the unemployed to lead useful lives. If Government money can be made available to help, it will be most welcome.

9.7 pm

Mr. Robert C. Brown (Newcastle upon Tyne, West)

Because of lack of time I shall be brief and shall refer only to the plight of the construction industry. I have repeatedly warned the Government over the past 18 months that, following the completion of major schemes such as the Tyneside metro, Kielder water and the Tyneside sewerage scheme, unless further major schemes are brought forward rapidly, the construction industry in the Northern region will be all but destroyed. There is no other way of describing it.

If Ministers tend to get bored with Labour Members referring to the construction industry time after time they ought to take note of the Northern "Group of Eight". Two construction industry trade unions—UCATT and the TGWU—are involved, but the other organisations are the Royal Institute of British Architects, the Royal Institution of Chartered Surveyors, the Institution of Civil Engineers, the National Federation of Building Trades Employers, the Building Materials Producers and the Federation of Civil Engineering Contractors.

No one on the Government side will suggest that they are lunatic "Lefties". I remember many members of those organisations displaying posters in their cars during the election campaign urging "No to Building Nationalisation". Today, the group states: There is no evidence in reports reaching the Northern 'Group of Eight' representing the Construction Industry in the Northern Region, to support recent statements by Government Ministers heralding an upturn in the economy … The overall picture is of a potentially dynamic industry, which has always been ready and able to provide the nation's buildings and essential infrastructure, wasting away through under-deployment. There is much more that I should like to have said, but I shall conclude with a quotation from the Official Report of 7 May 1940. At that time, the country was on the brink of disaster. The words were those used by Cromwell to the Long Parliament when he thought that it was no longer fit to conduct the affairs of the nation: You have sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go."—[Official Report, 7 May 1940; Vol. 360, c. 1150.]

9.10 pm
Mr. Harry Cowans (Newcastle upon Tyne, Central)

I shall be brief. If there were as many vacancies in the North-East as exist at this moment on the Conservative Benches, we would not need this debate. I hope that the Minister will not rely on the old argument that the situation is not the fault of the Government but is due to lack of action by the Labour Government. Since our debate on 20 January 1980, 50,000 jobs have gone down the river.

New concerns that have come to the North-East, whether or not they are foreign investors, are welcome. There is, however, a major problem. Not more than 10 years ago, Vickers, at Scotswood Road, one of the most bustling areas one was ever likely to see, was employing 20,000 people. Now it is lucky if it employs about 3,000. The problem of Bellesinger also has to be taken into account.

The enterprise zone is to be welcomed. One possible problem is that Vickers will shed labour and develop a new plant in the enterprise zone without creating any extra jobs. People may well stay due simply to the creation of the enterprise zone. It is a strange quirk of fate if the zone means only that people move around within it and the number of jobs is reduced.

The structure plan has recently been published. The Secretary of State for the Environment does not inspire confidence when he knocks back any chance of extensions to the Metro. The chance of attracting industry into the area is not helped when the right hon. Gentleman turns down the idea of a land bank for industrial concerns. How can one attract industry if one cannot supply the land? If this had happened nine months hence, the area would have had no chance of attracting the Nissan plant. It should be communicated to the Secretary of State for the Environment that if he adopted a different attitude he might inspire more confidence in the area.

9.13 pm
Mr. Don Dixon (Jarrow)

I have sat throughout this important debate. It is a pity that hon. Members who spoke at the beginning of the debate did not make the brief contributions that we have heard at the end. If that had happened, all hon. Members present would have had the chance to raise constituency questions. It annoys me that hon. Members should speak for 20 or 30 minutes when others have constituency matters to raise. One could put the world right in 30 minutes if one talked common sense.

It is time that some of the people who shed crocodile tears felt what it is like to be unemployed. It is no good talking about statistics. When one is unemployed, one is 100 per cent. unemployed. There is nothing worse than the humiliation of begging for money rather than receiving the dignity of the pay packet.

The Northern region has been top of the unemployment league for a considerable time. This has happened under Governments of both parties. I am not blaming the present Government. If the idea of regional policy is to have economic parity, the policy has failed in the North-East and the Northern region. To those who believe that expansion is taking place and that the region is attracting industry to replace old industry, I would point out that last year there were 40,000 fewer jobs in the region than in the previous year. I am talking about 40,000 fewer jobs not 40,000 redundancies.

My hon. Friend the Member for Wallsend (Mr. Garrett) said that the North-East has about 26,000 people working in British Shipbuilders, where the present state of orders is a matter of great concern. Could not the Government pass over some naval and MOD orders to shipyards in the area?

The Prime Minister said that people should be mobile. The trouble is that the people who are mobile are the young and active ones. When they go, they leave behind the community centres, hospitals and old people's homes, the parks and the libraries, for which someone has to pay. The right hon. Lady should have a word with the Secretary of State for the Environment about public expenditure cuts. Incidentally, my authority was mentioned in the Black report. Had that report been implemented, it would have been given aid and the Northern region would have had £11 million extra aid.

The last ship repair yard in my constituency—the Mercantile Dry Dock—has been put on a care and maintenance programme. The last pit in my constituency, at Boldon, was on the hit list.

I have little time left, but I want to put one or two constructive points to the Minister. I have sat here all day and I intend to put them to the Minister. Perhaps I can give an idea of the size of the problem of youth unemployment in my area by saying that when the local authority advertised for 22 apprentices it received 654 applications. There were 232 applications for one apprentice electrician. There were 231 applications for the job of clerk-receptionist in one of our community centres—a dead-end job, paying about £2,400 per year.

We are told that we must help ourselves. When we had the Jarrow march in the 1930s we were told by the then President of the Board of Trade that we should go back and work out our own salvation. The Jarrow marchers were not marching for an extra crust of bread or for another bowl of soup. They were marching for the right to work, as is happening now. The Jarrow authority implemented the Jarrow Corporation Act, which allowed the local authority to aid industry. The Minister should bear that in mind when the local government legislation comes up for review, and, should make sure that provision enabling district authorities to help industry is not taken out of that legislation.

My last point is again a constructive one because we are trying to help ourselves. South Tyneside, my local authority, has just had a successful industrial fair, for the second year running. It was run in co-operation with the English Industrial Estates Corporation and the Department of the Environment—with incidentally, the backing of the local newspaper, the Shields Gazette, the Newcastle Chronicle and Newcastle Journal, the Sunderland Echo, and the South Tyneside Post. Over 7,000 people attended the fair in two-and-a-half days. Its purpose was to enable local business men to display their wares, bring their customers to the exhibition, and to see what was on sale within the area. It was also to give a psychological boost to local business men and the general public and to ensure that there was a wide diversity of business within the area. In the longer term, its purpose was to encourage young people to start their own businesses in the area. That is surely constructive.

The Minister said earlier that he was prepared to help people to help themselves. Let him come to South Tyneside and discuss with the local council the possibility of a permanent exhibition centre in the area. It would require Government aid. The community has the will, the spirit and the land. Let us now see whether the Government will encourage the local authority.

Having listened to the whole debate, I thought that I would make those remarks. I have tried to be constructive. I have put to one side statistics which I could have mentioned. I apologise for having spoken for so long.


Mr. Jack Dormand (Easington)

The Opposition feel that it is very significant that all of the Conservative Back Bench speakers in the debate referred to the North-East. They had apparently forgotten that this has been a debate about the Northern region—and that includes Cumbria. The Opposition are just as concerned about the problems in Cumbria, which match those of the four North-Eastern counties.

The hon. Member for Rutland and Stamford (Mr. Lewis) has not had the courtesy to wait for the replies, although I know that he has been present for most of the debate. Although we do not question his motives for speaking in this debate, we deplore his contribution to it when some of my hon. Friends have not been able to speak on matters affecting the Northern region. When the problems of his region are being discussed, we might suggest that one or two Labour Members from the Northern region should make contributions to that discussion. I do not want to waste any more time, because the hon. Member wasted plenty of it. We shall test his sincerity by seeing on how many occasions he comes into our Lobby when matters affecting the Northern region are debated in the future.

We welcome the presence of my right hon. Friend the Member for Huyton (Sir H. Wilson). It is a measure of his continuing concern for the North. We recognise the most valuable work, done during his premiership, by a Labour Government.

I think that my right hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) perhaps misjudged what was said by my hon. Friend the Member for Durham (Mr. Hughes) and myself about there being a Minister responsible for the North. We are not opposed to having a Minister responsible for the North. We are concerned that the present Government, of all Governments, might attempt a bit of camouflage by appointing a Minister for the North without any real powers. If we had a Minister for the North with real power and with a seat in the Cabinet, we should all concur with that. We all pay tribute to what my right hon. Friend the Member for Houghton-le-Spring did when he was Minister responsible for the North.

I am sorry that the Minister of State is not present. We understand the reasons for his absence. I say to the Under-Secretary—I am sure that he will convey it to the Secretary of State—that I found the Minister of State's speech frightening in its complacency. We had a catalogue of what the Government are doing. Everything that the Minister mentioned was done by the previous Government. Since then, the base has been narrowed considerably. The Minister gave a catalogue of the kinds of aid that are being given. What we say—I shall develop this matter—is that it is simply not sufficient. That is the burden of our argument.

For some time I thought that we would be getting some possible support. We got some for a time from the right hon. and learned Member for Hexham (Mr. Rippon), when he talked about interest rates, which affect the North and other parts of the country. His remarks on public expenditure were commented upon by one or two of my hon. Friends. However, the right hon. and learned Gentleman did his own U-turn and said that in general he now supported Government policies, particularly as they affect the region. That is rather different from the kind of speeches we have heard from him in recent months.

The Minister of State said that the Government do not question the need for regional aid. If the Government were true to themselves, Ministers present today would have told the House that market forces will solve the problems of the Northern region. The Secretary of State for Industry went a very small distance down that road when announcing substantial changes in regional policy in 1979. But the whole country knows that matters have deteriorated since then.

I do not intend to give too many statistics this evening. However, a little over a year ago, when the new regional policies were just beginning to take effect, there were 117,000 people without jobs in the Northern region—an unemployment rate of 8½ per cent. The most recently published monthly figures show 186,000 unemployed, representing a rate of 13.6 per cent. of the work force. That is a rate which is exceeded only in Northern Ireland. It is getting worse literally daily, as my hon. Friends have pointed out. If areas such as the North are to survive, it is essential that the Government of the day not only operate a strong and vigorous interventionist policy but recognise that it is a fundamental part of their policy. That is perhaps expecting too much of this Government. It is evident that they are unaware of the bewilderment, despair and anger felt by our people in the North.

The Secretary of State's philosophy was perhaps best expressed in his speech on regional policy on 24 July 1979, when he said: There has to be self-help in the assisted areas. There has to be enterprise, competitiveness, high-productivity and a reputation for co-operation between management and the work force in the assisted areas if they are to reach the level of employment that we all want them to reach."—[Official Report, 24 July 1979, Vol 971, c. 373.] We all say hallelujah to that. However, I challenge the Under-Secretary of State to say which of those aspects of self-help are not present in abundance in the region. We have had some excellent examples from my hon. Friend the Member for Redcar (Mr. Tinn), not least concerning the excellent industrial relations that exist in our region.

The burden of the Government's case in introducing new regional policies in 1979 was that resources would be concentrated where they would be most needed. We are entitled to know why unemployment in the Northern region has increased by no less than 80 per cent. since the institution of those policies. The Government know that £9 million a week is being spent on unemployment benefit in the region. The hon. Member for Berwick-upon-Tweed (Mr. Beith) mentioned the illogicalities of assisted area status in his constituency. My hon. Friend the Member for Morpeth (Mr. Grant) said exactly the same. My hon. Friend the Member for Workington (Mr. Campbell-Savours) gave some interesting examples of assisted area status in his constituency.

I hope that the Government will press the region's case with the EEC. How much of the refund due to the United Kingdom from the EEC budget will be spent on public spending projects in the region? [HON. MEMBERS: "Nothing".] It is about three months since I asked the Under-Secretary of State about that aid. I understand that no statement has been made. Will he give the assurance that the case for the North, specifically for the Northern region, is being urged by the Government with the EEC?

My hon. Friends and I are sometimes accused of being merely destructive when dealing with the region's problems. We do not accept that. Heaven knows, there is much to be destructive about with this Government. I shall turn to a number of suggestions. I merely add to those that have been made by many of my hon. Friends in their fine speeches. These are suggestions which the Government will be able to implement with the minimum of trouble if they have the will to do so, and which will be of considerable benefit to the North. I make no apology for saying again that we should like to see the establishment of a Northern development agency.

We have had a travesty of the truth from the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) and from other Conservative Members who have given the impression that we think that a Northern development agency would produce miracles and provide all the jobs that we want. They suggest that we think that there would be no further problems if it were established. We never said that and we do not say it now.

Sir William Elliott

Has that been the suggestion?

Mr. Dormand

Yes, it has. The hon. Member for Newcastle upon Tyne, North said exactly that in his speech. He will be able to check it in Hansard.

We do not regard the Secretary of State's recent refusal as the last word on the matter. One of the arguments used by the Government is that other regions would also demand such an agency if the North were granted one. Our response to that argument is that other areas do not have the strength of our case. The Northern region has topped the unemployment league for the whole of its history. No other area has had the industrial structure of the North and its subsequent decay, and no other area is so vulnerable to the competition of the Scottish Development Agency and the Welsh Development agency.

That argument can be developed more closely by considering the parallel case of the National Enterprise Boards. There are two regional boards—those of the Northern region and the North-West region. Those boards were instituted because of the special needs of those areas. In spite of their emasculation by the Government, the Secretary of State maintains them in existence, so presumably he feels that they have an important role to play. However, has there been a queue of other regions demanding regional NEBs? I understand that no other area has expressed the wish to have one.

Therefore, a co-ordinated attack on job finding to prevent the dissipation of present efforts by a multiplicity of bodies, coupled with adequate resources, would go at least some way towards meeting the disastrous decline of employment in the Northern region. If the Government refuse to accept our view on that matter, perhaps they will consult the Northern CBI, which has expressed continuing support for a Northern development agency.

Sir William Elliott

Will the hon. Gentleman give way?

Mr. Dormand

I shall not give way to the hon. Gentleman.

The second proposal concerns the three new towns in the region. The Government have decreed that the development corporations concerned should be wound up at the end of 1985. The Government's misjudgment in that matter epitomises the misjudgments and misconceptions about the Northern region as a whole. The three new towns are the most successful job-finding agencies in the area and the need for them will continue long after 1985. The announcement of the termination in that year is already causing expert and dedicated staffs to leave the corporations. The new towns' recruitment of jobs to theirareas has gone against regional and national trends.

In Peterlee—which I know so well—in my constituency, there has been one extension of the designated area to provide more land for industrial use. The corporation is presently seeking a further extension of 400 acres. That speaks for itself. I know of no local authorities in the areas which are opposed to an extension of the lives of the new towns. I beg the Government to think again on that matter.

Mr. Derek Foster (Bishop Auckland)

My hon. Friend will be aware that in the new town of Newton Aycliffe there was a net gain of 4,000 jobs between 1974 and 1979. Newton Aycliffe was an oasis of prosperity, but in 1980 there were 1,275 redundancies. That represented 15 per cent. of the total employment of that town. We need the status of new town to continue well beyond 1985.

Mr. Dormand

I am most grateful for my hon. Friend's constuctive and valuable intervention. My hon. Friend knows what effects that town has on his constituency.

We earnestly request the Government to reconsider there decision not to disperse Civil Service jobs to the Northern region. The Minister will recall that the last Government proposed to transfer about 4,000 jobs to the North. The present Government almost immediately stopped them on coming to office. We are constantly told that that was done on economic grounds, but it is strange that the Hardman committee, which took two years to consider the matter, did not say that. Nor did the Society of Civil and Public Servants, which is one of the largest Civil Service unions.

Dr. John Cunningham

Nor did any of the Tory candidates in Cumbria during the last general election. They supported dispersal.

Mr. Dormand

I am sure that that intervention will be noted by the Minister.

The Society of Civil and Public Servants said that Government's reasons were totally fallacious on economic, recruitment and employment grounds. The findings of the University of Strathclyde, which were well publicised, were that the plans abandoned by the Government would have created an extra 25,000 jobs in the regions and produced long-term savings of well over £800 million, which should appeal to the Government. There is a conflict of evidence, but, with the desperate need for the type of employment that the Civil Service provides, the Government should be flexible and reconsider Civil Service dispersal urgently.

My hon. Friend the Member for Morpeth is knowledgeable about the coal industry, which plays a major role in the Northern region. The miners in the North have a well justified reputation as one of the most reasonable and conscientious work forces in the country. they have helped to produce record tonnages, but, because of their efforts and because of the gloomy market, we have coal stocks of nearly 40 million tonnes, many of them in the Northern region, which is causing concern to miners and their families. The National Coal Board is likely to sell 6 million tonnes less this financial year than last year. Stocking alone will cost £35 million.

The Government can do two things, and they have already started on one. They are encouraging the greater use of coal in industry. It is almost universally recognised that over the next 20 years major industrialised countries will have to shift their energy needs away from oil. In the recent disastrous Budget, the Chancellor said that £50 million would be made available over the next two years to help industry to make the change from oil fired to coal fired boilers. We welcome the principle, but are deeply disappointed at the comparatively trivial sum. If two or three major companies converted to coal, the money would disappear in a few months.

The last thing that we wish to do is to give the impression that the North is a desolate, barren region, lacking excitement, enjoyment, beauty, sport and culture. The exact opposite is true. Most of us who have the honour to represent the area were born there and will not move away. The Government should ask the civil servants who moved to the North some years ago whether they would like to return South. In no circumstances would they go back.

Our people are responsible, proud and hard-working. The managers of the factories established in the North more recently will confirm that unequivocally. However, we need to have the same opportunities as the remainder of the country. We are reluctant to demand rights, but our history, which is one of hard and dangerous work in heavy industry, cries out for a man's right to work, to live in a decent house, to continue education in accordance with his ability and intelligence and to live in pleasant environment. Much has been done to that end, especially under Labour Governments, but much more remains to be done.

I hope that the Government will seriously consider the splendid contributions made from these Labour Benches tonight. Tory Governments have little support in the North. If the Government ignore the pleas to improve the serious state of the area, they will receive even less in the future.

9.39 pm
The Under-Secretary of State for Industry(Mr. John MacGregor)

Despite the fierce tones of the hon. Member for Easington (Mr. Dormand), it is a pleasure to follow him in this debate. I know that he has always taken a great interest in his own region and has played a leading part in it. It is a pleasure for me personally, because in a previous and different capacity we worked together, silently perhaps, but in the interests of the House as well as of our own parties, as part of what is euphemistically described as the usual channels. I am therefore delighted to follow him today. From his experience, like my own, as a former Whip, he will know that in the interests of all Members of the House we have to cut short our own remarks to enable others to participate, as I am sure they wish to do. Therefore, it may not be possible for me to respond to all the points that have been made in a very wide-ranging debate. On the specific points that were raised, if I cannot cover them all in my speech, I shall endeavour to reply to them in writing.

I begin by paying tribute to the tone set by the hon. Member for Durham (Mr. Hughes). With a few exceptions towards the end, I think that the tone that he set has made it a constructive and worthwhile debate. I should declare at the outset that I have no strong connection with the region, although in a sense I have two. I was born and brought up in a part of Scotland that shares many of the problems of the Northern region—a coal mining area with all the difficulties of dereliction, declining jobs through declining industries, all the coal seams disappearing, and so on. I remember clearly my own feelings at that time and the way in which my thinking was affected by the original Toothill report, which was produced by the Scottish Council. That document concentrated not only on infrastructure, but on growth centres and played a large part in the thinking of my right hon. and noble Friend now the Lord Chancellor when he produced the original report in 1963, which led to much of the fundamental new infrastructure that has been greatly praised by many hon. Members today, including my hon. Friend the Member for Tynemouth (Mr. Trotter).

I also remember clearly experiences that I had in the Northern region because I used to holiday there every year. I agree with all the comments that have been made about the many attractive parts of the region and, incidentally, the importance of drawing attention to them. Very recently, on almost my first visit as a Minister, I visited Consett and other parts of the Northern region. I was struck by some of the promotional literature, including brochures on the county of Durham, which brought out in a striking way how attractive is much of the region. As many hon. Members have stressed, I believe that it is important to emphasise that side of the region, rather than the difficult areas, in trying to attract new industry, executives and so on.

Of course I share the deep concern that has been expressed about the levels of unemployment. I must tell the hon. Member for Wallsend (Mr. Garrett) that I am in no sense complacent. The hon. Member for Durham rightly recognised that the problems of the Northern region are of long standing. Indeed, reference has been made to the fact that at some points in the 1950s, the early 1960s and the early 1970s it looked as though some of the problems were really being overcome and that the Northern region was not only sharing, but going ahead of other parts of the country, in the growth that we experienced. He was right to emphasise that point, because it has been since 1975, covering periods in office of two Governments that growth of that region has become lower than of any other region except the West Midlands. It is not a problem that has arisen in the last two years. It is a problem of long standing. If we are to overcome these problems through effctive action over time—and I emphasise those words, because clearly it will not be easy to do it quickly, and certainly no one has succeeded in doing it quickly to date—we must understand the reasons for them.

I wish to spend a short time on those reasons before dealing with the specific points that have been put to me. I believe that there are two local reasons relating to the Northern region. The first, which was particularly emphasised by the hon. Member for Durham, who put it more eloquently and in a more learned way than I ever could, is the need for industrial adjustment from the declining heavy industries. That has been spelt out by others in the debate. It clearly takes time to bring in new industries in sufficient number and get them growing to compensate in any sense for the decline in employment caused by the decline in other industries. It is all very well for hon. Members to look askance at that, but they know that it has happened under several Governments, and not just under the present one. There is therefore a problem of time.

In addition, there is a different, modern problem, namely, that so often the new industries are capital-intensive, high technology industries which do not employ the same numbers as the industries of the past.

One or two hon. Gentlemen referred to this and it is important to understand it. It is crucial to the future economic benefit of the region that these new industries, capital-intensive and others, are attracted to the area.

The second problem is that of the infrastructure and location adjustment, because what was often a suitable location for old industries is not always the best for the new. We learn from new investors from overseas that they quite rightly look for factors other than the grants or other things that the Government offer. They look for the ports, the markets, the communications, and these will not always be in the particular areas, even within the Northern region, where the original industries grew up. This is a problem that we face, for example, in Consett, and I want to say a word or two about that later.

On the national side—and the hon. Member for Easington must face this—particularly in this increasingly competitive world, there is a need for us to adjust very rapidly to greater efficiency in our industries, to rid ourselves of our old habits—the bad habits to which my hon. Friend the Minister of State referred. What we are facing, on top of that regional adjustment, is the fairly rapid adjustment of many industries have become uncompetitive at a time of world recession. This makes it very difficult to find the new jobs quickly enough to deal with the decline in the old.

There are some good signs in the national economy. As we see from the results of the Northern engineering industries, they are coping very successfully with the adjustments that they have had to make, but it does mean a reduction in numbers of jobs, because included in that is dealing with overmanning. This is a point that must be faced and taken into account in looking at the shifting balance in industry and the effect on jobs.

I think that the point was made very well by my hon. Friend the Member for Tynemouth, when he drew attention to the fact that areas like the Northern region throughout the whole of Western Europe, with the same types of industries, are facing exactly the same problems.

Mr. Campbell-Savours

But not the same levels of unemployment.

Mr. MacGregor

In many cases we have suffered because our industrial decline over 20 years or more has been faster than that of many of our competitors. We have to face the fact that we are having to deal with that rather faster decline, and therefore it is bound to have a more dramatic effect.

I part company from the hon. Member for Durham when he says—and I think that I am quoting his exact words—that since 1979 there has been considerable evidence to show that the Government's approach to regional aid was being turned on its backside. I think that that was the elegant phrase that he used. I refute that absolutely. We have first to look at the situation on regional development grants and assisted area status. The general point which I think is very important here is that the concentration on the areas of highest need effectively helps the Northern region more than most others. Most of the Northern region still has assisted area status when that has gone from most other parts of the country. There has been a general reduction from 44 per cent. to 25 per cent. in the country as a whole, yet 90 per cent. of the Northern region still has assisted area status of one sort or another and over 50 per cent. has special development area status. So that effective concentration really is directed to help the Northern region.

My hon. Friend the Minister of State also quoted figures of expenditure per head in regional aid and demonstrated just how much the Northern region benefited compared with other areas of the country. I am taking the past year—I say to the hon. Member for Easington, because he said that so much that had been done was catching up with the previous years' expenditure—and looking at what has been spent in the Northern region in the various forms of aid from the Government and from Europe. If the hon. Gentleman will look at the figures of Government spending in the Northern region as a proportion of aid nationally he will see that the remark that the approach to national aid had been turned on its backside is absolutely nonsensical.

In the past year the Northern region has received £122 million in regional development grants, which is 37 per cent. of the total for the whole country. Dealing with the point about the English Industrial Estates Corporation, 70,000 people now employed in its factories are in the Northern region, which is about 75 per cent. of all employees of the corporation.

Since 1975, £128 million or 20 per cent. of the total funds available from the European regional fund has been spent in the Northern region. A total of 13 per cent. of the money available under YOP and £7.4 million or 25 per cent. of the total available under derelict land clearance programmes was spent in the Northern region last year. It cannot be said that the Government's regional aid policy has been turned on its head. By far the highest proportion of the aid available is concentrated on the Northern region.

Mr. Mark Hughes

The figures that the Minister has given total about £300 million—at the most. The amount spent on unemployment benefit in the North is £1.2 billion. To pay people to do nothing in the North is the Government's real sin.

Mr. MacGregor

That is a separate argument. I shall deal with it if I have time. I accept that unemployment in the Northern region is particularly high. We know the reasons for that. A high proportion of Government aid is concentrated on that region. It cannot be said that the regional aid programme has been stood on its head.

I agree with my right hon. and learned Friend the Member for Hexham (Mr. Rippon) and my hon. Friend the Member for Newcastle upon Tyne, North (Sir W. Elliot) that bringing inflation and interest rates down—the Government's central strategy—is crucial to the rebuilding of business confidence and is more important than anything else for the regeneration of the economy in the Northern region and elsewhere.

It is easy for Opposition Members to call for more public spending and to argue that that is the answer to the problems. The hon. Member for Easington was guilty of that. It is important to get the balance right. The more that public expenditure is pumped in all over the shop, the greater is Government spending and Government borrowing and the less are the chances of bringing down inflation and interest rates.

Pure public spending and Government assistance are not the answer. Many people accept that the Consett decision was right for the future health of the steel industry. I accept that the decision was tragic for the area. Many people acknowledge that the Government are doing all that they can to help. We are building a £13 million ongoing scheme for Consett. It includes small workshop units and 32 units involving 100,000 sq ft are under construction. Nineteen units covering 124,000 sq ft are vacant and 12 are reserved. New factories are being built to try to deal with the problem. Many inquiries have been made from small firms and that will provide a base. However, the basic difficulty is attracting the big United Kingdom or foreign companies with internationally mobile jobs.

Consett's main problem is its location. Government spending will not necessarily solve the problem. The Government are concentrating all resources on trying to build the estates and provide jobs. However, when Government direct industries they are often located in the wrong places for their products. That weakens the economy and the industries have to close. We have seen that happen elsewhere.

I should like to comment on overseas investment, and in doing so I may be able to rescue the hon. Member for Durham, who was unfairly criticised for some of the remarks that he made. I suspect that the hon. Gentleman welcomes overseas investment in the Northern region. The attraction of overseas companies is important to the Northern region. I recently had the pleasure of visiting Japan with the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans), when we saw for ourselves that there was considerable interest in Britain. I know that at least one Japanese company in the Northern region has created many jobs. It has also brought with it new high technology and management. I therefore agree with those who have said that in today's increasingly international business environment it is important to do all that we can to attract these companies.

The problem is that many other countries and regions are trying to attract exactly the same investment. It is therefore important that there should be a positive attitude from the region, on top of all the other infrastructure benefits that it possesses. For example, it has ports, which were referred to by the hon. Member for Redcar (Mr. Tinn). It also has universities, which are important for new high technology firms. That was mentioned by my hon. Friend the Member for Newcastle upon Tyne, North. The region also enjoys good communications and high speed trains, to which my hon. Friend the Member for Tynemouth referred. At the end of the day, a positive attitude from the region will above all, attract such companies.

I recently had the pleasure of visiting West Germany with a trade union official from the Northern region. He did a splendid job in trying to overcome the resistance towards investing in Britain. I say that even though a German company is located in Newton Aycliffe. People in Germany acknowledge many of the attractions and believe that we have a good chance of pulling our economy round. However, they are still afraid of other things, such as our apparent bad industrial relations record. The more that we can do to overcome that problem by talking positively, the better for the region.

There is a four-month moratorium on regional development grant payments. That is part of the containment of public expenditure announced in the Budget. However, there are other administrative delays in clearing the grants, which I have tried to improve. The length of delay has come down considerably, and I hope that it will continue to improve.

I know that the hon. Member for Whitehaven (Dr. Cunningham) agrees that it is important to have stability in the regional grant aproach as well as in the areas themselves. There will be fluctuations from time to time in the relative levels of unemployment between different travel-to-work areas. However, to change them too quickly makes is difficult for industry to plan ahead with confidence. At present, both Berwick and Morpeth have levels of unemployment below the recognised levels for development areas. That brings me to the point raised by the hon. Member for Berwick-upon-Tweed (Mr. Beith). It is difficult to separate small pockets within a travel-to-work area, and say that they should have a certain type of status. Some anomalies will always exist at the borderline. It is therefore important to maintain stability. We have made it clear that if there are signs of long-term structural change in unemployment levels, we would be prepared again to review the status of such areas.

The hon. Member for Berwick-upon-Tweed referred to the level of unemployment benefits—as did the hon. Member for Durham—as against a massive public works programme. That sounds a simple concept in theory which appears to be attractive as a general approach. However, the problem is extremely complicated. Alas, I do not have time to deal with the matter tonight, but I assure the hon. Member for Berwick-upon-Tweed that we have looked carefully at this issue. If we tried to achieve what hon. Members seek without increasing overall Government spending in order to maintain the economic strategy, public expenditure would often be capital intensive and would, therefore, not create many jobs. Secondly, if we tried to create actual new jobs, the level of wages would often be a good deal higher than the level of unemployment benefit. Thus, once again, we would add to the level of Government spending. That is why there is such a heavy concentration within the Government on employment measures.

I apologise for being unable to deal with many of the other points that have been made. I shall endeavour to reply in writing. I simply have not had time to deal with many of the detailed points that have been raised.

One of the points that came out clearly during the debate and is extremely important is that the northern region, instead of constantly clamouring for more Government spending or drawing attention to the bad, derelict areas, should concentrate a great deal more on its advantages.

I am sure that my right hon. and learned Friend the Member for Hexham and others of my hon. Friends are right when they stress the importance of the Government continuing with their strategy of getting inflation and interest rates down, because, for the Northern region as elsewhere, it has been our higher levels of inflation—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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