§ Mr. Giles Radice (North Durham)
The purpose of the debate is to draw to the attention of the Minister for Small Business, Industry and Energy, and of Parliament, the closure of the Tanfield Lea zinc carbon battery-making facility in my constituency, with the loss of 350 jobs. I am seeking Government assistance to help the area to recover from that blow.
I was shocked and disappointed to hear about the closure, as, when I opened the 25th anniversary celebrations at the factory in 1993, Ever Ready International management assured me that the plant had a bright future. The plant was opened by Anthony Crosland in the 1960s under the regional policy of that time. It was taken over by Hanson in the 1970s, and, under its ownership, the plant and its work force were run down. The plant was eventually sold to the international Ever Ready company, which assured my constituents that the plant at Tanfield Lea would be integral to its international plans.
However, the international company dropped a bombshell on 17 January. when it announced the closure of the battery-making facility. The plant itself has not closed, as the company will operate a satellite unit employing about 40 people. However, I believe that that is only a temporary measure.
The closure of the facility—which is the biggest manufacturing plant in my constituency—has had an enormous impact. First, jobs have been lost in an area where unemployment is above the national average, and young people now face reduced employment opportunities—which is a bad blow in itself. Secondly, valuable income has been lost in an area of below average incomes. When people lose fairly well-paid jobs and go on the dole—which many of them are likely to do—less money is available to households and to the entire area.
The Minister, who used to represent a northern constituency, knows that Derwentside has had its problems. The Consett steelworks closed in 1980–81—I can assure the Chancellor of the Exchequer of that, despite his embarrassing gaffe on a local radio programme—but the area has made a considerable recovery, partly due to the very effective work of the local development agency.
In light of the recent bad news, I convened a meeting at the plant with the international management, the chief executive of Derwentside and the director of the development agency. I urged the company to reconsider its decision—in particular, I asked it to switch to the production of alkaline batteries, for which there is a much larger market. The company denied my request. It said that the efficiency of the plant or the effectiveness of the work force was not in question—on the contrary, it had nothing but praise for its operations—and it pointed to a change in its worldwide strategy and the necessities of the global market.
In western Europe in particular, zinc carbon batteries are being replaced by long-life batteries. Even though there is a big market for zinc carbon batteries in Asia and Latin America, according to the company, that demand can be met more efficiently by its so-called super-factories in those regions. The company took the 326 decision for international strategy reasons, and my constituency was reminded once again that Britain is part of the international market.
I accept the company's decision: I can do little to change it. However, I have told company representatives that they must fulfil their corporate responsibilities—they cannot simply walk away from the area. I am pleased to report that the company agreed to co-operate with the Derwentside task force in the rundown of the company, which will occur over a year. It is committing funds to retraining and to re-employment services.
The Derwentside task force is vital to the recovery of the area, so it must continue to operate effectively. As the Minister knows, the task force was set up after the collapse of the Consett steelworks, and it has now been reconvened. We have that facility in the area partly because of the problems we faced in the past: we know how to deal with jobs crises. The local council, the development agency, County Durham training and enterprise council, and representatives of English Partnerships, the Department of Trade and Industry and the office of the north will serve on that body. It has met once and another meeting is scheduled.
The task force has produced an outline strategy, which will concentrate on retraining, providing alternative jobs and reclaiming the site. It faces a problem in its latter objective, as battery making involves chemical operations, which means that the site must be cleaned very effectively. The task force aims also to attract alternative industry to the area. I am glad that we have been joined in the Chamber by my hon. Friend the Member for North-West Durham (Ms Armstrong), who also represents the Derwentside area.
I shall tell the Minister what we want the Government to do. He recognises that there must be a partnership between the local area and the Government, and I would like him to refer to that issue today. If he accepts that this is a major factory closure and a major redundancy, I understand that that would allow the County Durham TEC to become fully involved.
As to co-ordination, a number of different Ministries are involved. Representatives of the Departments of Trade and Industry—which the Minister represents—of the Environment and of Education and Employment must come together and devote their wisdom, energy and resources to a co-ordinated effort to assist the area. We need maximum support from the Government and from European funding programmes. I am not an expert on all the funds, but I understand that money is available from various sources, such as English Partnerships, the single regeneration budget and other European funds. We need the Minister's help and advice on how to access those funds and apply the full force of what is available in the constituency.
As the Minister knows, we have asked for a meeting with him and other Ministers either in London or in my constituency to discuss the problem, examine it at first hand and agree on a joint strategy involving the locality and the Government in trying to overcome a very severe blow to my constituency.
I very much hope that the Minister can help us. I come here not in a partisan mood, but to explain the problems to Parliament and to the Minister, and to ask the Government to help us meet the crisis and produce an answer that will assist my constituents.
§ The Minister for Small Business, Industry and Energy (Mr. Richard Page)
All Members, unless they are very new or very lucky, have had the painful experience that the hon. Member for North Durham (Mr. Radice) is now facing. It is something that I most dread as a constituency Member. One has to do one's best when a body blow of this nature occurs in one's constituency.
I congratulate the hon. Gentleman on his success in the ballot that has enabled him to raise those concerns today in the House. As we all know, one cannot guarantee the results of a ballot, and the hon. Gentleman's success has enabled those concerns to be aired in a public forum and has given me the opportunity to respond. I should like to think that, at the end of the debate, the hon. Gentleman will find it a helpful response.
The announcement on 18 January by Ever Ready was a blow to the people at Tanfield Lea and the surrounding Derwentside and north Durham area. It appears that there is no prospect of reversing the decision to close the battery production facility, with the loss of 350 jobs. I know that the hon. Gentleman has discussed the matter with the Ever Ready management, and I understand that the decision was made for global strategic reasons and is no reflection on the commitment and the performance of the work force in Tanfield Lea over many years; but it has happened, and we now have to bounce back.
The challenge that faces the area is to find a coherent and comprehensive response. I understand that the company has offered outplacement services to its redundant employees; that is welcome, but it is only a first step.
As the hon. Gentleman said, Derwentside has risen to those challenges in the past, notably the closure of the steelworks in Consett in 1980. That was in no small measure due to the efforts of the local partnership that is spearheaded by the Derwentside industrial development agency. We should pay tribute its success in attracting new industries to the area over the years including biotechnology, aerospace and high-quality food manufacturing. That provides a strong base on which everyone can build.
That base has been further strengthened—I speak as the Minister responsible for small business—by the formation of new and vigorous small businesses in the area, which have created some 5,000 jobs over the past 15 years. The growth of those businesses remains a priority. The small firms in Derwentside are undoubtedly benefiting from the county-wide single regeneration budget, which has been valued at more than £2 million and has created some 69 businesses and self-employment for more than 500 people in the past year alone.
In support of those projects, a comprehensive network of advice services has been established, including a Derwentside outlet for the business links network in the county of Durham. I am absolutely convinced that, as the months unfold, the value of business links will become increasingly important in helping those businesses develop and expand.
My Department has been active in providing more than £400,000-worth of regional selective assistance grants to small firms in the area during 1995 alone. That, in turn, has created some 100 jobs. We have been active in the area for many years. Since 1981, my Department made 328 165 offers of RSA grants worth some £16.5 million to Derwentside companies towards the creation and safeguarding of nearly 4,800 jobs.
As a consequence of all that, unemployment in the Newcastle travel-to-work area, covering most of Derwentside, has fallen from 16.5 per cent. in 1985 to below 10.5 per cent. today. In Consett, which bore the brunt of the impact of the steelworks closure, unemployment has fallen by more than 50 per cent., from a staggering 8,000 in the early 1980s to 3,500 in 1995. It is living proof that the initiatives are working, and I am sure that the hon. Gentleman will agree that those are impressive achievements. but they are not enough. We have to do more, so what more can we do?
§ Ms Hilary Armstrong (North-West Durham)
I hesitate to interrupt the Minister, because it is important that we hear the Government's view. It is also important, however, that the House recognises one of the consequences of the closure of the steelworks and other sources of employment.
There are now significant numbers of men in particular who have not worked since they lost their jobs, and are unlikely to work again. They are not included in the unemployment figures that the Minister has just given us, because they received a redundancy package which took them off the unemployment register, or because their wives are working.
There is a significant problem in Derwentside among older men aged 50 to 55, who have not had employment opportunities. We are also looking for measures to enable them to find a way back into work. The Minister may not be able to help us this morning, but I hope that the Government will take into account the fact that some of the men who work at Ever Ready and come from my constituency and that of my hon. Friend fear that they may not work again because of the loss of jobs there.
§ Mr. Page
I fully understand those worries and concerns, but I should point out that there has been a substantial improvement in the area from the position some 15 or 16 years ago. To be perfectly honest and open with everybody, although that is good, there is more to be done. We are not resting on our laurels and saying that we have now finished. There is more to be done and, as a Minister, I am perfectly willing to try to improve matters.
I can confirm what the hon. Gentleman said—that the process of formulating a response to the Ever Ready announcement has already begun, and several meetings of the Derwentside task force have already taken place. They were attended by the Government office for the north-east as well as English Partnerships, and I assure the hon. Gentleman that my officials will continue to play an active role in the process, now and in the period from May onwards when the job losses begin to take effect.
It might be helpful if I touch on some of the key issues that need to be tackled as a matter of urgency. Perhaps the most immediate task is to consult the other occupants of the site to ensure that the announcement by Ever Ready does not impact negatively on their business and long-term prospects.
Clearly, as the hon. Gentleman has already mentioned, it is important to work with Ever Ready to ensure that the jobs that are to be retained on the site—about 40—for the production of zinc calots and liner papers will remain for 329 the long term. It is also important that, within that number, a small research and development team has been retained. That will help to provide the remaining work force with a focus for some new development.
The agencies will also need to work closely with those companies on plans to redevelop the site in the future and on how the site will be marketed to attract new industry. I am sure that English Partnerships, the Northern Development Company, DIDA and others will prove to be up to that task.
Another priority will be the training and retraining of people affected by the job losses, which touches on the point made by the hon. Member for North-West Durham (Ms Armstrong). I am pleased to announce that the Employment Service has agreed to waive its usual eligibility criteria, to provide immediate access to its schemes for the Ever Ready work force. That is a positive step in trying to ensure a continuation of job prospects.
Officials are working closely with the County Durham training and enterprise council to identify the areas where resources can most usefully be deployed, to tackle the immediate effects of the announcement. The overriding priority—I am sure all hon. Members are on this wavelength—will be to create new jobs. I am delighted to announce that my Department has offered a £940,000 grant to a major company in the area for an expansion project that should create well over 100 new jobs.
The House will understand that I cannot be too specific at this moment, because of the commercial confidentiality of the current discussions. However, that development represents an immediate response to the Ever Ready announcement. We all hope that that grant will be accepted, and that the project comes to fruition.
§ Mr. Page
I ask the hon. Gentleman not to press me, because, if I am too specific, everybody will be able to work out the location and the company's identity. The offer has been made, and we are waiting to learn whether it has been accepted. I hope that we will be able to announce the creation of 100 new jobs and their location.
Derwentside is well placed to take advantage of the north-east region's outstanding record of success in inward investment—some £4 billion over the last 10 years, creating or safeguarding more than 50,000 jobs. It reflects to the credit of this country that so many overseas organisations have established themselves in the UK and are playing a full and vital part in the manufacturing process.
One example is a recent investment by Nippon Silica Glass to manufacture silica quartz at Annfield Plain. Silica quartz is a vital component in the manufacturing process for wafers at the successful Fujitsu plant nearby—which last year announced a huge additional investment of some £800 million to increase production and jobs.
330 There is a need for a wider local regeneration strategy. I welcome the target that the Derwentside economic development strategy has set itself, of securing 500 net new jobs for the area by the year 2000 through inward investment. It is vital that all the local partners work together to make sure that that challenge is met.
That objective will certainly be assisted by the £100 million Project Genesis development to redevelop the centre of Consett and to establish a high-quality business park on the former British Steel site at Berry Edge, in addition to impressive leisure facilities. The Government have also provided £1.2 million of support through the derelict land grant programme, as well as £1 million of support through European regional development funds for the project. My Department also stands ready to discuss further funding packages for that flagship project, as and when required. We anticipate that the development will create at least 2,700 jobs, as well as improving industrial land and infrastructure in the area.
More generally on the regeneration front, the first two rounds of the single regeneration budget included two large projects for Consett and Stanley worth more than £5 million in total, which shows that resources are being put where they are needed.
The hon. Member for North Durham asked whether he could bring a delegation to meet me or another Department of Trade and Industry Minister. The answer is yes—I would be more than willing. However, perhaps I may offer the hon. Gentleman a choice—what more can I do for him? The relevant people could come to the Department to discuss matters. Alternatively, my noble Friend Lord Fraser, who is the sponsor Minister for the region, would be prepared to meet when he is in the area a delegation led by the hon. Gentleman to discuss matters there and then, on the spot.
I leave it to the hon. Gentleman to decide which arrangement he prefers. No doubt he will discuss those proposals with the people involved in his constituency and let me know his decision. I hope that, by then, even further plans for tackling the redundancies will have firmed up, and we can make a more focused response to help the people who are going to be out of work.
I assure the hon. Member for North Durham that my Department is actively engaged in the process of assisting the people of Derwentside to deal with the consequences of Ever Ready's announcement. It has been made absolutely clear that Ever Ready's decision is due to no failing on the part of the company's work force, but is for global strategy reasons. Such decisions are made sometimes, and they are a damaging blow—but I am certain that the hon. Gentleman's constituents can come together in a focused and positive way to bounce back.
The evidence of the past 15 years, and the announcements that I have been able to make today, make me confident that the partnership in north Durham will meet the challenge. I look forward to learning the hon. Gentleman's decision on the arrangements to meet his delegation.