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Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

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Question agreed to.

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8 May 2000 : Column 620

Assisted Area Status (Burnley, Hyndburn and Rossendale)

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

10.32 pm

Mr. Peter L. Pike (Burnley): I have pleasure in initiating a debate on an important issue for Burnley, Hyndburn and Rossendale. Before I begin my speech, it would be wrong of me not to record my congratulations to Burnley football club on securing automatic promotion last Saturday. I say that in all seriousness; the issue is important not only for the club, but for Burnley, because it boosts morale. It is incredible how much production rises in local industry when Burnley football club does well.

Last Friday, I opened the Northbridge conference centre at Elm street in Burnley. It is in a building that was occupied by Lucas several years ago. Lucas moved out when it relocated, and the building has undergone several alterations. The refurbishment is incredible--an area of derelict houses opposite the building has been cleared, a new car park is being built and landscaping is being carried out.

That work was made possible by help from various Government programmes over the years--objective 2, assisted area status or urban development. Indeed, in a short speech at the opening ceremony, the owners of the building referred to the grants that had enabled the work to be undertaken.

My speech is about three areas because we are making a joint submission. My hon. Friend the Member for Hyndburn (Mr. Pope) is in the Chamber and the Minister for Tourism, Film and Broadcasting, my hon. Friend the Member for Rossendale and Darwen (Janet Anderson), will enter the Chamber any minute now. Both of them are precluded by their membership of the Government from speaking in the debate, but they very much support the case that I shall make in my speech.

My right hon. Friend the Minister saw us on 18 April, and I am very grateful for that. He is an old friend of mine; we both came into the House in 1983. We are grateful for the way in which he has listened to our case, but it is important to make the case publicly in the Chamber to show that we are doing everything possible to ensure that assisted area status is given to the three authorities. My right hon. Friend wrote to us on 19 April, and I shall refer to that letter later in the debate.

Burnley, Hyndburn and Rossendale were included in the revised map that was agreed by the Government last July and that was put forward as the new map of assisted area status. We welcomed that at the time and we thought that the Government had done an excellent job in putting wards together. They put together areas of deprivation and those that met the requirements of the assisted area scheme. They also did a good job in enabling as many local authorities as possible to use the resources available.

Unfortunately, that proved to be a false dawn and the European Union--there was a change in the Commission--was not willing to agree to the proposals. It was a major blow when it was announced on 10 April that the map would be changed yet again.

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A letter of 10 April from my right hon. Friend the Minister said:

He said that there would be a three-week period of consultation, but he added:

That news was a major blow to us; it was a real shock and totally unexpected at that stage.

I am glad that my hon. Friend the Member for Rossendale and Darwen has now arrived. She was obviously delayed by the vote that has just taken place.

On 14 April, the North West regional development agency issued a press release that suggested that its board supported the case for east Lancashire to be reconsidered for assisted area status. It said that

Rossendale council has written a detailed letter to the Government office of the north-west and it has made a strong case. Among other things, it says:

It points out:

Burnley borough council writes:

as it was in March 2000. It adds:

Burnley had a strong case when it was considered in October 1998. However, every factor on which the proposal was considered has worsened since the proposal was made.

Burnley council continues:

The new index of local deprivation, which will be published in June, will show that all boroughs in east Lancashire, including Pendle, are in a much worse position. I am glad that my hon. Friend the Member for Pendle (Mr. Prentice) is also here to support my case.

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East Lancashire Partnership sent a letter, dated 5 May, to all Lancashire Members, saying that it hopes we will

In a letter to the Minister, the North West regional development agency, the north-west regional assembly and East Lancashire Partnership made the point that their case is supported not only by east Lancashire but by the region. It said:

This is not only a local case, supported, rightly, by vested interests such as those in Burnley, Hyndburn and Rossendale, but one with the full backing of the north-west regional assembly and development agency. They believe that there is a strong case for the change in the present map, which has been put out to consultation. The closing date for responses was last Tuesday.

The original case that was made to the Government was based on structural decline, low gross average earnings and low pay, business registrations and survival rates, unemployment and the 1998 index of local deprivation. On structural decline, it can clearly be demonstrated that the east Lancashire economy has become increasingly vulnerable and continues to under-perform compared with the rest of the UK.

On gross average earnings, wages in east Lancashire are 14 per cent. lower than the national average. In manufacturing, wages are 13 per cent. lower than the national average. Business registrations have fallen because of the economic climate. Unemployment is getting worse, and I mentioned that several redundancies had been announced in the past few months. In crude terms, east Lancashire has been a job deficit area for decades, and the situation has become acute over the years. The index of local deprivation supports our case.

As I said, the latest figures underline the fact that the position is getting worse. For Hyndburn, the gross value added at the time of the proposal's submission in October 1998 was 81 per cent. of the UK figure and the latest figures show a deterioration to 79 per cent. The figure for Rossendale has fallen from 74 per cent. of the UK figure to 73 per cent. In Burnley, the net capital expenditure per head in manufacturing was 68 per cent. of the UK figure at the time of the submission, but the latest figures show a fall to 65 per cent. In Rossendale, the figure was 62 per cent. of the UK figure, and has now fallen to 50 per cent.

Changes in international trade mean that TRW is moving work not to the European Union but to eastern Europe because of low wages there. Only last month, I secured an Adjournment debate on the redundancies that had been announced at TRW, which are a serious blow to the area. As I said, unemployment in Rossendale has increased by 1.7 per cent., and Burnley's unemployment rate is following that trend, as the 709 redundancies announced in March are added to February's unemployment total of 1,454.

Those are the problems that we face. On the index of deprivation, Hyndburn has moved from 76 to 43, Burnley from 65 to 50 and Rossendale from 107 to 65. Many areas

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that have been included in the assisted area status map have far lower figures of deprivation than the three areas that I am talking about. The automotive industry is a major employer in our area. Many people depend on it for their job, so they are concerned about what will happen at Rover and Ford.

We need assisted area status if we are to develop industrial estates in our area. Shuttleworth Mead in Burnley has 30 acres remaining for development and the potential for 1,800 jobs; Network 65 in Burnley has 27.5 acres remaining for development and the potential for 1,500 jobs; 65 Central in Hyndburn has 86 acres remaining for development and the potential for 3,500 jobs; and Trans-International Park in Rossendale has 7.5 acres remaining for development and the potential for 400 jobs.

One of the points that I made to my right hon. Friend the Minister is that Burnley has 3,000 empty houses: poverty and deprivation are on the increase and people are moving away because there are no jobs. We have the will to tackle those problems, but we need Government assistance. Another problem is the European Commission's official confirmation of the closure of English Partnership's investment programme. It has been said that the Department of the Environment, Transport and the Regions provides assistance, but if we do not get assisted area status it cannot help.

The conclusion of the submission states that the area is a nationally important manufacturing area, with a strong case for support based on poor economic performance and high levels of poverty and deprivation. At a time when the national economy is improving, conditions in the area have not improved--indeed, against many indicators, performance has worsened. Tier 2 status and access to regional selective assistance is vital to partners' attempts to tackle the deep-seated economic problems in east Lancashire. Without it, the already fragile economy will deteriorate even further than it has done since the original submission in October 1998, and the area's efforts to develop in the new economy will be seriously weakened.

In his letter, my right hon. Friend the Minister expressed a willingness to come to the area and meet representatives of the regional development agency and the Government office of the north-west. We hope that he will be able to do so soon, and that he will respond positively and so offer hope to Burnley, Hyndburn and Rossendale.

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