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Mr. Henderson: I am pleased that the right hon. and learned Gentleman said that we should try to deal with such matters in a non-partisan way. I know that he endeavours to do just that and to consider the interests of the nation. I attempt to do the same, but sometimes I am denied the opportunity because of the way in which issues are raised.
On efficiency, I am absolutely confident that with a tough, systematic approach, we shall be able to achieve the goals that we have set ourselves. In some areas it will be possible to make much greater gains than 3 per cent.,
but in others it will be extremely difficult to make any gains at all. However, I am confident that we will be able to make the overall efficiency gains to which we are committed.
Mr. Bruce:
Will the Minister give way?
Mr. Henderson:
I really have to press on, although I may take interventions on other issues.
The hon. Member for Salisbury also mentioned the Western European Union. Let me make it clear that the concordat that was concluded in Washington related to capability, not institutions, within Europe. A number of signatories to NATO said that we must look at how things are done in Europe and at how to achieve the capability that we need. The decision did not relate to the institutions. The hon. Gentleman said that it was a failure that a decision had not been reached as to how the WEU would relate to NATO, the North Atlantic Council and the European Union. In my opinion that was not a failure but a strength. We must get the political principle and the military resource assessment right before deciding how the bureaucratic structures should relate to each other. I think that we got our priorities right. At a meeting that I attended in Washington about six weeks ago, there were still differences in NATO about emphasis, but this weekend there was unanimity and that is a major step forward.
My hon. Friend the Member for Dunfermline, West (Ms Squire) and the hon. Members for Romsey (Mr. Colvin) and for Aldershot (Mr. Howarth) mentioned the Defence Evaluation and Research Agency. There was some expectation that an announcement would be made about it, but there is still work to be done.
Mr. Bruce:
Will the Minister give way on that point?
Mr. Henderson:
No. There is no point in the hon. Gentleman pressing me. There is work to be done, and the House will be first to know of any decisions taken when it is complete.
I want to move on to questions raised by hon. Members who have attended the whole debate. My hon. Friend the Member for Alyn and Deeside (Mr. Jones) was as indomitable, brief and comprehensive as ever. He raised three important points relating to his constituency, but I believe that they are of major significance for the nation's defence. I shall try to pick up some of the other points raised as I deal with my hon. Friend's questions.
My hon. Friend the Member for Alyn and Deeside asked about RAF Sealand, and we all value the work that that important unit performs on behalf of the nation. My hon. Friend also asked about the ASTOR ground surveillance system, in which there is a great deal of interest. That system featured in points raised by the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis), by my hon. Friend the Member for Dunfermline, West, and by several other hon. Members.
I can tell the House that the facility in the constituency of my hon. Friend the Member for Alyn and Deeside is renowned as a centre for excellence. No decision has yet been made, but it is a great tribute to our defence industries that there is a choice in the matter, as the relevant capabilities exist in different parts of the country and therefore are able to bring different excellences to the decision.
The third point raised by my hon. Friend the Member for Alyn and Deeside concerned large carrier aircraft. The matter was raised also by my hon. Friends the Members for Leyton and Wanstead (Mr. Cohen) and for Chorley (Mr. Hoyle), and by the hon. Member for Ruislip- Northwood (Mr. Wilkinson). The point brings to the House's attention the essential role that air lift plays in the modern deployment of our armed forces. Anyone who did not believe that that was important six weeks ago certainly now knows that it is a crucial factor, as air lift capability has been required in a number of different ways.
We need to renew our present fleet of large carriers to maintain our air lift capability. We will therefore need four C17s, or their equivalents, in the period ahead. Bids are being considered, and I hope that the decision will be made by 2000. However, other, more long-term decisions will have to be made in relation to large aircraft.They will have to be made in the context of the needs in the Ministry and of the ability of British industry to meet those needs, and the requirements of a wider export market in the future. That big and crucial decision will have to be faced in due course.
My hon. Friend the Member for Dunfermline, West has a long record of participation in these important debates, whether we are debating matters on a single-service basis or in the more modern framework. She drew to the House's attention the importance of Rosyth dockyard, and the crucial work that it is doing as part of the allocated programme. I thank her for her kind words in that regard. It is absolutely important, for the needs of Scotland and of Britain, that the Rosyth yard should be able to carry out that crucial defence work.
My hon. Friend the Member for Dunfermline, West also asked whether Kosovo would lead to a delay in procurement. The answer is no: we are determined to modernise as we have proposed in the strategic defence review, and we shall press on with that, our additional commitments at the moment notwithstanding.
The hon. Member for Somerton and Frome (Mr. Heath) asked about ordnance stocks. I am running out of time, so I shall write to him in more detail, but I can tell him that we must make sure that we have the necessary stocks. The hon. Member for Romsey asked about the future security of supply, and I can say that we must also make sure that the supply is secure. We must be sure that we can always supply what we need, whether it be a replacement for ammunition stock or a major item of equipment.
The hon. Member for Somerton and Frome also asked about the air-to-air missile, which I agree is crucial for the Eurofighter. My hon. Friend the Member for Chorley was also interested in that matter, on which, as they may know, a decision will be reached later in the year.
My hon. Friend the Member for Linlithgow(Mr. Dalyell) once again referred to Russian shipping. In the short time available, I can give only the same reply that the Prime Minister gave earlier, but should be happy to discuss the matter with my hon. Friend.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Allen.]
Mr. Malcolm Moss (North-East Cambridgeshire):
I am grateful for this opportunity to put to the Minister for Small Firms, Trade and Industry an important case on behalf of my constituents and those of the hon. Member for North-West Norfolk (Dr. Turner). This is my sixth time of asking for the debate, and I am glad finally to have come up trumps in the ballot. I thank the Minister and his team for their co-operation, particularly in answering letters and in meeting a deputation from my local authority, Fenland district council.
I do not want to belittle the difficulties that the Minister and his team face. There have been parallel submissions from many other local authorities for objective 2 status under the structural fund budget. Those bids are not coterminous with bids for assisted area status, but the core criteria are, in many cases, coupled. The shared criteria include having 100 people per square kilometre, having a percentage share of agricultural employment equal to or higher than twice the European Union average in any year since 1985, and having an average unemployment rate over the past three years above the EU average.
When those stringent criteria are taken together, the present is not the most auspicious time at which to plead for my area. The major issue facing the fens is the fight against the perception that East Anglia is uniformly prosperous--a perception reinforced by the allocation of regional budgets. The east of England, containing a population of 5.3 million, will receive £28.8 million, but the south-east of England, where the population is 7.8 million, will receive £60 million. On a pro rata basis, the money for the south-east would be £45 million.
In August 1993, the Government designated the Wisbech travel-to-work area as an assisted area with intermediate status. The reasons were higher than average unemployment, measurable deprivation, staple industries that were mainly in declining sectors, and problems of isolation and peripherality. The same factors applied to the successful application by local authorities in North-East Cambridgeshire and North-West Norfolk for European objective 5b structural funds. We were also successful, under the same deprivation criteria, in applying for rural development area status.
I am not talking only of the Wisbech travel-to-work area, of course, because the submission made to the Minister by Fenland district council offered a twin-track approach. It included the idea of moving from wards upwards, aggregating areas across county boundaries and involving a large area in the constituency of my neighbour, the hon. Member for North-West Norfolk.
Having got assisted area status, what is the track record of my local district councils? We would say that we have been the most successful area in the eastern region. We have had about 60 offers of regional selective assistance, totalling almost £5 million, compared with just over £2 million in the Great Yarmouth assisted area, £750,000 in Harwich and £1.3 million in Tendring. So, the fenlands area has been by far the most successful in attracting Government grant and, as a result, in levering in
substantial amounts of private sector investment. About £25 million of such investment has come in under that leverage.
The investment has safeguarded 1,015 jobs in the Wisbech travel-to-work area and has created 922 new jobs. It has also been successful in lowering unemployment, which stood at 11.5 per cent. in 1992 and was below 4 per cent. earlier this year.
Those figures do not take into account recent job losses in the area. A few months ago, Hazelwood Foods announced the loss of 420 jobs at one factory alone. Within several weeks of that announcement, Carnaud Metal Box announced 90 job losses at its plant, which makes cans for the canning industry. The company has since changed the figure to 75 job losses. None the less, that is a significant number for the travel-to-work area, given its size and population. With the losses in smaller firms, we will be facing more than 500 job losses in the next few months.
What are the employment prospects for that area of Cambridgeshire--a prosperous county, within a seemingly prosperous East Anglia? How is that pocket of deprivation likely to get out of the trough? A jobs deficit of about 9,800 is predicted by 2006, yet 6,300 jobs will be required merely to bring male and female activity rates up to the Great Britain average. On top of that, 3,500 will be needed to provide employment for the projected 7,300 growth in population by that year.
The area has a problem of structural decline. The Henley industrial structure index predicts that it will be one of the worst local authority areas for employment in Britain. The index ranks the fenlands 433rd out of a total of 459, so it is at the bottom end of that structural index.
Of course, it is an agricultural area, and we have uncertainty over reform of the common agricultural policy. Last year alone, we saw a 45 per cent. reduction in farm incomes and the National Farmers Union predicts a 50 per cent. reduction in farm holdings in the next five years. Therefore, it is unlikely that the base industry of agriculture will be able to take up any slack in unemployment in the next few years.
The capacity to create new jobs or to travel to such jobs in other parts of East Anglia is constrained by a number of factors. First, there is a concentration of businesses in declining sectors that risk rundown or closure. Some 60 per cent. of industries are in mature or declining sectors, and only 40 per cent. in growth sectors. Secondly, there are poor prospects for investment, particularlywith the non-viability of commercial property. My constituency cannot attract speculative industrial build, certainly in the north, because when the factory or building is constructed, its value on the open market is three quarters of what was paid to put it up. There is, therefore, a problem in sale and lease-back arrangements, for example, and only with the intervention of the local authority or English Estates can the gap be made up so that we can have a viable commercial industrial sector.
There are constraints on water supply and disposal. We are talking about the fens of East Anglia and parts of my constituency that are below sea level. Getting the water off the land is a problem, but so is getting the water that industry uses into the rivers and out to sea. Unfortunately, while considerably more investment is going into water
treatment and sewage systems--Anglian Water has a substantial investment programme--our relatively sparsely populated area is towards the back end of development. To my knowledge, we have lost the investment of two major European food processing firms who wanted to come to Fenland, but did not because Anglian Water could not cope with their water requirements.
The third factor is the uncompetitiveness of the work force, which is manifested by low educational attainment, skills in declining sectors, low pay and low entrepreneurial capacity. Educationally, 69 per cent. of 16-year-olds obtain fewer than five GCSEs or national vocational qualifications at grades A to C, against the national average of 55 per cent. On training, 23 per cent. of the work force do not have a nationally recognised qualification and only 19 per cent. have NVQ1.
Low pay means average earnings of £321 against a Great Britain average of £354. Those figures relate to pre-minimum wage days, so I do not know the current figures. They reflect low added value and a low skill profile. On entrepreneurial capacity, between 1993 and 1996, VAT registrations fell by 13 per cent. That shows a decline in the business start-ups that we hoped would grow into companies that could take up the slack of unemployment.
10 pm
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