HC Deb 12 May 1936 vol 312 cc317-38

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the Third time."

9.56 p.m.

Mr. BATEY

Before the Bill passes, I want to express my disappointment with it so far as the distressed areas are concerned. If this is all that the Government are going to do for the distressed areas, the outlook is extremely black. Within the last two years they have taken three steps which have raised hopes in the Special Areas only for them to be disappointed on every occasion. Two years ago they appointed four Commissioners to make reports, and it was believed that the Government really intended to do something for the Special Areas. They received the reports, but did nothing except appoint a Commissioner, who has been in existence for 15 months, and we are no better off to-day than when he was appointed. What does the Chancellor expect from this Bill? When the Commissioner was appointed a sum of £2,000,000 was voted for the distressed areas, but only £330,000 has so far been spent. We complained that a sum of £2,000,000 was of no use, but it has not been spent and now the Chancellor of the Exchequer comes along with a proposal for another £1,000,000 which, I believe, will not be spent either. Last night the Chancellor of the Exchequer made remarks which staggered some of us. In one speech he said: Here the public have to supply the money, the public will run considerable risks for practically no reward, and you may be quite certain that they are not going to run these risks indefinitely unless the prospects of the work to be done by this company become much more rosy than I reckon them to be at this stage."—[OFFICIAL, REPORT, 11th May, 1936; col. 71, Vol. 312.] In those remarks there is not much hope for the distressed areas. We are justified in assuming that the Chancellor of the Exchequer himself does not expect the reconstruction company to be a success. But that was not the worst thing he said last night. In another speech he said: The operations of the company, as I conceive them, are not likely ever to be on a gigantic scale. The thing is an ex-periment for small businesses and I am not expecting that the Bill, even if it is as successful as the most sanguine anticipate it will be, is going to set the Thames on fire or provide any great revolution in the affairs of the depressed areas."—[OFFICIAL, REPORT, 11th May, 1936; col. 55, Vol. 312.] What does the Chancellor of the Exchequer expect from the Bill? He says that it is not going to create a revolution in the distressed areas. Is it then only shop-window dressing? Is it only going to do what the Government have done before—raise hopes in these areas and then dash them to the ground? We want a revolution in the distressed areas. Unemployment, we are told, is going down throughout the country, but that is not true so far as the distressed areas are concerned. In the Spennymoor Exchange there has been an increase in the number of unemployed by 381 as compared with April of last year. The prosperity of the country has not touched these areas and, therefore, we want to ask the Chancellor of the Exchequer whether this is the Government's last word on this matter and how long they propose to wait to see whether this experiment is to succeed. Are they going to sit down quietly and wait for six months, or 12 months, or two years before they do anything else for the distressed areas?

Nothing that the Government have done so far has touched the fringe of the problem in these areas. During the General Election we were told that a trading estate was to be started and that £100,000 had been earmarked for the purpose. It is still in the air. The Commissioner made this statement during the Election, and I believe that when this last experiment has been in operation for one or two years we shall be no better off. In my opinion, you will not really help the distressed areas until you are prepared to find the money to restore the basic industry in the areas—the coal industry. Unless you are prepared to find the money to do that, nothing that you are proposing to do will help them, and 12 months after this Bill has been passed we shall be in the same condition as we are to-day. I want the Chancellor of the Exchequer to realise that in these areas this is a human problem. The people are gradually going down. They expect the Government to do something for them, but all the Government can do is to raise their hopes and then dash them to the ground. We are no better off now than when the Government took office.

10.4 p.m.

Mr. KINGSLEY GRIFFITH

I understand that on the Third Reading of a Bill we are reduced to discussing what is in the Bill and not what is outside it. That makes it easy to deliver a short speech. Quite frankly, there is not a tremendous amount in the Bill, and in fairness to the Chancellor of the Exchequer I recognise that the right hon. Gentleman has never pretended that there was very much in it. As I have said before, the most misleading thing about the Measure is its Title. If you are going to give out to the world that this is your programme for the Special Areas reconstruction, people will be disappointed. But the Chancellor of the Exchequer has made it clear that he is trying to fulfil a particular recommendation of the Commission, a recommendation which I and other people have asked should be adopted, and, therefore, it would be ungracious if I were to attempt to belittle the experiment which is being made. If this were the Government's whole programme it would be ludicrous and would merit every word which the hon. Member for Spennymoor (Mr. Batey) could use against it. But it is only one item and it is as such that I consider it. I think that the Chancellor of the Exchequer has gone too far in decrying the value of his own experiment. It is possible to make an experiment fail by saying how little you think of it. All the speeches on this Bill have had a tendency towards making people think that this is going to be a risky experiment, and to cause them to ask themselves whether it is worth while risking the money. I do not want that to be the final impression.

The Bill is not intended to help the heavy industries. The hon. Member was right in saying that they are the essentials of the problem, through which, alone, the depressed areas can be restored, but the object of the Bill is, within certain limited lines, to supply not a substitute for those industries but some kind of help which will give a little more resilience in these areas so that they will not depend altogether on one thing. Considering the bad reputation that has been acquired, it will be difficult to make this a success, but although I have been critical of some points in the Bill, and of the efforts of the Government for the depressed areas as a whole, I do not want any single effort they can make to fall short or fail through lack of any help that I can give. I think we ought to accept these little experiments if we can get no more, and try to make them a success. I wish the Bill success within the limited area which alone it can help.

10.8 p.m.

Mr. H. G. WILLIAMS

As the previous speaker has said, we cannot on the Third Reading go outside the four corners of the Bill and discuss genera] policy, but I have always taken the view that, in the long run, the distressed areas problem can only be solved by the general trade and financial policy of the country and not by special localised efforts. This Bill is a Trade Facilities Bill in miniature. It has the same general idea that people who cannot get credit otherwise—generally for good reasons—should be enabled to get it with the assistance of the Government. It is, to some extent, a device for giving credit to people who ought not to have it. Generally speaking, if people want credit and have a good case they can get it to-day. [HON. MEMBERS: "No!"] I think that is so in general. Never since 1895 or 1896 have interest rates been as low as they now are, nor has there been such a quantity of money on time deposits in the banks, indicating credit that is not functioning properly in the banking system.

It is obviously also true that a, certain number of people who are just starting may have certain difficulties. Nevertheless this is a proposal to grant credit to people who would not get it from those whose ordinary business is to grant credit It is a device to direct credit by the State through the intermediary of a company which does not yet exist It is a first experiment in nationalised banking. [HON. MEMBERS: "Oh!"] Apparently, hon. Members opposite had not thought of that before, and when they hear it they can only make a noise. The Bill consists of six long sentences, two of which begin with "if" and another with "in the event of." The schedule is a contract between the Treasury and a company that does not yet exist, but it is obvious that the company is fundamentally controlled in its general policy. It is difficult to see how much the Treasury is liable to lose in the event of anything going wrong, because the phraseology, being Parliamentary, is obscure. It appears, however, that the Treasury is not going to carry the whole baby but the greater part of it. I do not know whether any means test is to be applied, but I take it that it is a case of "to those who have nothing shall some thing be added."

Mr. MAGNAY

The hon. Member says that those who can satisfy the bankers that they are entitled to credit will get credit. Is that not a means test?

Mr. WILLIAMS

I did not say anything about the bankers. I spoke about obtaining credit, and bankers are not the only people who give credit. People in a small way do not get credit in the first place from the banks. I hope I am not unduly narrow-minded in the view which I take of this proposal—though I sometimes feel that I am becoming narrow-minded, so many proposals are coming along which I do not like. However, if it is desired to have an experiment, the cost involved is only the equivalent of the cost of two months of collective lunacy in the form of special precautions in the Mediteranean, and if we can chuck money away in that direction, perhaps we can spend some in trying to please the hon. Member for Spennymoor (Mr. Batey).

Mr. BATEY

It does not please me.

Mr. WILLIAMS

If it were £2,000,000 it would probably please the hon. Member more. His trouble is that it is not enough. My own impression, however, is that the general conception behind the Bill is bad. As I say, I do not mind occasional laboratory experiments. I know that very often nine-tenths of what you are looking for is not there or, if it is, you do not recognise it, but that is what is called research, and if the Chancellor of the Exchequer likes to make a little economic research well and good. I shall be surprised if it produces any satisfactory results, but I have not the heart to vote against the Bill. I protest, however, against the idea that it is the function of the State to do all these jobs, and I sometimes think that if we had done less than we have done to solve the unemployment problem it might be nearer solution at the present time.

10.14 p.m.

Mr. JOHN

We have now reached the final stage of this Bill and there was no need for the hon. Member for South Croydon (Mr. H. G. Williams) to express any sorrow at the fact that the Government had not done anything for the unemployed.

Mr. WILLIAMS

I did not say anything which could possibly bear that construction.

Mr. JOHN

I understood the hon. Member to say that it should not be the policy of the Government to do anything for the unemployed.

Mr. WILLIAMS

I must protest. I said clearly—and I had in mind this country and other countries as well—that if, in some directions we had done less, we might perhaps have really done more for a solution of the problem.

HON. MEMBERS

What does that mean?

Mr. JOHN

In any case the hon. Member can rest satisfied that the Government of which he is a supporter has done nothing for the unemployed, and this Bill will do nothing. In fact, all the discussions that have taken place right through the various stages of this Bill have led me to the conclusion that the best thing about the Bill is its Title. It has an excellent Title which contains the word "reconstruction." On looking at the Title, before listening to the discussion, one would think that at long last the Government were attempting to fulfil their promises to the unemployed, as mentioned by the hon. Member for Spennymoor (Mr. Batey), and that they were now going to reconstruct and, if not build anew, at least attempt to lay down an industrial structure destined to provide work for the unemployed in the distressed areas and to give them an opportunity of reconstructing their own lives and their homes.

After reading the Bill and listening to the discussion, one is bound to come to the conclusion that there is nothing in this Bill which will satisfy the longing that is in the hearts of the people living in the depressed areas. The Bill will not provide work for the people in those areas, and it will not give them an opportunity of having a brighter outlook on life. It simply means that they are again to be disappointed in looking to the Government for any easing of the burden and solution of the problem which is causing them suffering at the present time. Even the Chancellor himself has said that the Bill is not going to put the Thames on fire or cause a revolution so far as the affairs of the depressed areas are concerned. He said it is purely an experiment. It seems to me that so far as the National Government are concerned the word "experiment" is a blessed word in connection with the depressed areas. When the last Bill was introduced by the late Minister of Labour, who is now President of the Board of Education, he said that it was to be an experiment. This again is to be an experiment, and from all the experiments of the National Government in the distressed areas all that has been produced is a change in name. First they were known as depressed areas, then distressed areas and now they are Special Areas.

This problem has been agitating the minds of the unemployed and the local authorities in the depressed areas for many years. It has faced the Government for many years, and all the Government have done has been to experiment. In the name of justice and common sense the time has passed for experimenting upon the lives of the people in the depressed areas. The time has now arrived for the Government to do something tangible for those areas. I contend that so far as this Bill is concerned the Government are not doing anything tangible for them. Eighteen months ago the Chancellor of the Exchequer said that the conditions of the depressed areas were such as to call for special treatment and that it was essential for something rapid, something direct., or, he said, if you like, some unorthodox method to be adopted. It may be that this Bill contains very unorthodox methods so far as the policy of the Government is concerned, but they are very heterodox so far as the financial question is concerned —so heterodox that after hours of discussion last night I do not think anybody clearly understood what is the financial policy in the Bill. But even if the financial arrangement contained in the Bill is unorthodox in that sense, it cannot be argued that it, is a rapid measure or that it is a direct measure to deal with the problem.

After 18 months of solid thinking and diligent effort on the part of the Government to get a direct: and rapid method, they have produced this puny Measure in order to meet one of the gravest problems any Government has had to face. How will this Bill meet the problem? The chancellor has said that it is not intended to solve it. It is simply going to meet conditions that are in certain areas. Last night the right hon. Gentleman remarked that South Wales was not the only depressed area, meaning, I presume, that i f it does not touch South Wales the Bill may be of advantage to some other areas. I hope that he is right. We are riot concerned to oppose the Bill if it would ease the burden in any other part of the country. What are the conditions of the depressed areas to which this Bill will apply? They can be divided into two categories. There are the varied industry areas, where there are idle factories, and the one industry areas, where there is not room for buildings to be erected and where the Chancellor suggested that it was intended to clear away the rubbish heaps in order to get sites for factories. That has not been done yet. It may be possible for the Bill to be of slight advantage to the varied industry areas, but it will not touch the fringe of the problem of the one industry areas. Those areas are suffering the worst, and if there is to be an attempt to solve the problem of the depressed areas it has to be a solution of the problem of the hardest hit areas.

The company which is to be formed may attract £1,000,000 capital. After receiving that money what is to happen It is to wait until a certain number of applicants come forward for loans in order to start certain new industries in the depressed areas. The company will be like Micawber, except that, instead of waiting for something to turn up, it will wait for someone to turn up; and while they are waiting there will be millions of people in the distressed areas languishing in poverty and want. Are these people to wait again until such time as sufficient applications have come forward? If they do come forward, what sort of industries are they going to establish? There is no indication in the Bill or the Chancellor's speeches. If there are a number of people waiting ready and anxious to invest their money in the depressed areas, we ought to be able to get the information as to the nature of the industries. How many factories are to be built, and how many people are to be employed? What kind of varied industries will be established in the vicinity of, say, the depressed areas in South Wales? Unless there is to be some information on these lines. it means that these people have again to wait for years in order to ascertain whether it is possible for some new industries to come into these areas.

We are not opposing the Bill, but we are conscious that it is not going to touch the problem. The Government have either ignored the depressed areas or have failed to understand the magnitude of the problem. The hon. Member for West Middlesbrough (Mr. K. Griffith) said that this was not the Government's whole plan. Our complaint is that it is not part of a general policy. If it were a part of a well thought out plan we should welcome it with pleasure. It is simply one item taken from the recommendations of the Commissioner but the Commissioner said quite clearly that it was impossible to solve the problem of the special areas by one method and that other recommendations had to be taken into consideration. The Commissioner recommended that there should be a raising of the school-leaving age, that there should be a lowering of the age for retiring from industry, that there should be an increase in pensions, that the scientific treatment of coal ought to be taken up. The right hon. Member for Hillhead (Sir R. Horne) said the other night that one of the advantages of having small industries in close conjunction with the depressed areas would be that they would act as a feeder to the established industries. What is the established industry in the distressed areas? The coal industry, and the best feeder for the coal mines would be the scientific treatment of coal, the extraction of oil and chemicals from coal. What about easing the burden of the rates?

Mr. SPEAKER

The hon. Member must confine himself to what is in the Bill.

Mr. JOHN

I wanted only to mention some of the recommendations of the commissioner in passing. If this Bill were a part of a general programme on the part of the Government we could look forward to the future with some measure of hope so far as the depressed areas are concerned. We shall not ask the Government to withdraw the Bill, but to intro, duce very quickly a sequence of other measures in a policy for the depressed areas. The Government must be told that the patience of the depressed areas is gradually coming to an end. The people there are getting sick and tired of the conditions under which they live, and it would be to the advantage of the Government and the country generally if this problem were seriously and honestly dealt with in order to give the people there an opportunity again to earn a decent and an honest livelihood.

10.29 p.m.

Mr. ASSHETON

I had not intended to intervene to-night, but some of the remarks which the hon. Member for South Croydon (Mr. H. G. Williams) made rather encouraged me to put forward my views. I think he was over-critical of this Bill. We ought to appreciate the efforts which are being made to deal with the problem, even though the effort we are now discussing may be only a small one. I have had some considerable experience in raising money for businesses, and I know how difficult it is to raise money for small or medium-sized businesses. It is easy to get £1,000,000; pretty easy to get £500,000; not so difficult to get £250,000; but when you come down to £50,000 or £10,000 the difficulties are very great.

The reasons are that the expenses incidental to raising money are very much the same whether the amount is great or small. If you want to advertise a prospectus in the Press and pay all the expenses incidental to raising money on the Stock Exchange, you probably find that you have an advertising bill from the newspapers for something 'between £5,000 and £6,000, and that fees and underwriting commissions run into £2,000 or £3,000. It is quite impossible, therefore, for small businesses to get money with ease. It has been suggested by my hon. Friends that it is easy to obtain money from the banks because bankers find difficulty at the present time in making use of their funds. That may well be so, but it is not the business of bankers to find money for businesses. The business of bankers is to find working capital for some businesses and to find such money as is required from time to time on short term. If the Bill draws the attention of financial interests to this problem it may have good results, in that more companies may be formed to deal with this form of credit.

It is easy to criticise the Bill. I found difficulty in understanding paragraph 4 of the Schedule. Criticisms are easy to make, but we have to remember that here is a Bill introduced by the Government with the very definite object of filling a gap in our financial system. It may be that private enterprise ought to have filled this gap: I sincerely hope that private enterprise will take note of what this Bill is doing and will, in its own interests, do something more to fill a gap which clearly exists in our financial system. I hope the House will give the Bill a Third Reading, and I thank the Government for what they have done to draw attention to the matter.

10.33 p.m.

Mr. MAINWARING

In welcoming or not welcoming the Bill which the House is now asked to give a Third Reading, one would be entitled to judge the proposals from the standpoint of what is contained in it, and whether, as a result, one might expect from the Government any other proposals to deal with the problems towards the solution of which this Bill affects to move. From the initials of the title of the Bill, S.A.R.A., I very much fear that, like another historic personage with a very similar name, it will remain barren to a very old age. I doubt very much whether the Front Bench will ever be able to fructify the Bill. The hon. Member for West Middlesbrough (Mr. K. Griffith) suggests that this is not the Government programme but a request by the Commissioner. One is entitled to ask whether the Government are correctly interpreting what the Bill proposes to do. The hon. Member for South Croydon (Mr. H. G. Williams)—I do not know whether he thought his suggestion was humorous—said that in a minature way this was a trade facilities Measure. He forgot to add "without the facilities."

The Commissioner said that in his experience of attempting to deal with difficulties in the depressed areas, certain people found difficulty in obtaining the necessary capital. That was his suggestion. If the Government have adopted it as an instruction, how have they endeavoured to interpret it? Let us see how it has been interpreted, even as recently as last evening, by the Financial Secretary. In opposing an Amendment he emphasised the fact that it should be none of our business, and particularly of this Bill, to provide easier credit facilities for the men who are courageous enough to attempt to find a solution of this problem than are available to other people. He said that the individual who comes to this association for loans is, in the eyes of the normal and orthodox organisation, not creditworthy, and that, if the Amendment in question were put into the Bill, it would confer upon this non-creditworthy individual a lower rate of interest than other people could have.

The Financial Secretary last night objected to giving to men who are dealing with a special difficulty special terms for dealing with it. Previously he had said that the individual entering a depressed area with a view to starting a new industry would be a very courageous individual; he would be embarking upon a very bold adventure; and then the Financial Secretary confused the first individual, who had thus adventured into the troubled world of a depressed area, with the Association itself, which does not adventure at all. The Special Areas Reconstruction Association is a very well-blessed Association. The Bill provides that its shareholders shall have 3½ and 3 per cent. interest on the money they subscribe. The Association will also receive handsome contributions from the Treasury towards its reserves. Thirdly, it is guaranteed as to any loss of capital up to a given percentage; and, fourthly, it is guaranteed also that its administrative costs will be found. The Association adventures nothing; it is the individuals who come to it for loans who are adventurous, and for them there is no assistance, except that the Financial Secretary held out to them last night a wonderful vision for the future, if the company is prosperous.

It is no wonder that the Government agreed to give to this company, which must find 32 per cent. for its shareholders, its administrative costs, because one can imagine the rate of interest that it would have to charge its borrowers if it had to pay 3½ per cent. to its own shareholders, plus its own administrative costs, plus providing for its reserves, plus the condition upon the borrowers to repay the capital as well as the interest upon it. One can imagine the burden upon the poor clients, even with all the assistance that the Government are giving. Therefore, the Financial Secretary suggested that, if the company is prosperous—if it can exact from the first range of clients a sufficiently high rate of interest, and secure the return of the borrowed capital in a sufficiently short time—if it is prosperous to that degree, there is a possibility that the second, third, fourth and fifth ranges of clients may have the benefit of a lower rate of interest. In other words, if the depressed areas can remove their own depression, there is the hope that someone will get money at a cheaper rate.

That is the way the Government attempt to solve the problem. There is nothing in the Bill, and we should be justified to the hilt in voting against it. [An HON. MEMBER: "Are you going to vote against it?"] I am prepared to vote against it. You are simply playing with the problem. I only wish that Members could be compelled to live in a distressed area for a month. Then they would know what to do about it. The Chancellor of the Exchequer the other evening admitted that the Bill does not touch the distressed areas. It is an experiment in a very limited degree. That is no contribution at all. I should like to see the next 12 months rapidly pass by and let everyone realise that there is nothing in it now and there never has been. The unemployment problem is a problem of the depressed areas. The Minister of Labour may be satisfied to some extent by the reduction in the unemployment figures as recorded to-day, but that does not affect the depressed areas. The Rhondda has not yet seen the bottom of the depression. There has not been a suspension yet in the Rhondda of the continued increase in depression which began in 1921, and for how many more years we are going to be compelled to experience an increase of this condition of affairs we do not know. No one need wonder that we carefully analyse the propositions contained in the Bill. In them we see not a vestige of hope for our people. There is not a word in the Bill which offers the slightest possibility of anyone coming into our area and starting anything in the nature of a new industry.

10.43 p.m.

Mr. BAXTER

I had not intended to intervene in the Debate, but inadvertently I found myself in the seat usually occupied by the right hon. Gentleman the Member for Epping (Mr. Churchill) and it is difficult, occupying such a seat, not to take part in the Debate. To keep up the traditions of the right hon. Gentleman, I find myself with a desire to pay a genuine tribute to the Government. I have listened with some astonishment to the criticisms of the Bill. It is exactly what the Chancellor represented it to be, not the only thing the Government are to do, not a vast expensive scheme, but a genuine constructive experiment which should have the blessing of everyone in the House. The idea was suggested to him by the Commissioner for the depressed areas, Mr. Malcolm Stewart, and was founded upon his vast experience, and the Bill represents the Chancellor's willingness to carry out the Commissioner's idea.

It would really seem sometimes that, much as hon. Members opposite desire the welfare of the people of the depressed areas, they live in terror that something that the Government might do would help them. More than once they have talked about the vested interests of the capital class. They sometimes give the impression of regarding the unemployed as their vested interest, for whom nothing must be done by this side of the House. This Bill is a modest one, but firms which could not otherwise get started will begin to get the capital they require. From small beginnings, firms may develop into great concerns. To condemn the Bill and to belittle its possibilities by criticism is to have a very wrong conception of the whole thing. I consider that the Measure which the Chancellor of the Exchequer has brought forward, and which has been criticised so much but with so little effect, ought to have the blessing and the enthusiastic support of every Member of this House.

10.46 p.m.

Mr. HOLDSWORTH

I wish to say a few words about the Bill from a totally different point of view from any that has yet been expressed. I do not doubt the absolute sincerity of the Chancellor of the Exchequer with regard to the purpose of the Bill, but the House ought to be warned about a Bill of this description. Ever since I came into the House I have consistently opposed every kind of subsidy and grant to private enterprise. I am a believer in private enterprise, but it is an absolutely wrong principle that the House of Commons should call upon its Members to vote sums of money in order to assist private enter-price. I have stated time after time in this House that there is no justification for private enterprise unless it can stand upon its own feet, and that is the word of warning I want to issue about this Bill when we are voting the money of our constituents in order to try—and I agree on this point—to help matters in the distressed areas. But it may be that losses will be thrown upon the State. We ought to have that particular point of view in mind.

It is very difficult indeed for people who believe in private enterprise to come cap in hand to the House of Commons in order that private enterprise should be assisted. There ought to be ways and means of raising money by private enterprise through its own resources rather than having to come to the House of Commons and ask for assistance. [An HON. MEMBER: "That is what they are there for."] Let them answer for themselves; they are of age. What will happen if there should be huge losses to be borne by the State as the result of this Bill? You absolutely invite criticism of this kind of Bill, and further, you invite the State to take over many of these businesses as the logical conclusion of those losses. I warn the House, and those who believe in capitalism, of the danger, as we have done during the last three or four years when private enterprise has had to come cap in hand and ask for help from the resources of the State. That is the word of warning I want to issue to the House. It would be well if the people interested in finance found ways and means of financing their own enterprises, instead of playing into the hands of hon. Members above the Gangway.

10.50 p.m.

Mr. MAGNAY

I want to say a word or two to bring the House back to realities. Some of us have been told that we ought to live in the depressed areas. I have lived in one 40 years. That is why I am here. I have lived among the people all that time, and they know me. It is true that this Bill is in a way a small thing, but its potentialities are immense. May I give you my own experiences 1 I have tried sometimes to get orders for my constituency on Tyne-side. When the Chancellor of the Exchequer said that he did not expect this Bill to set the Thames on fire he used the wrong name. It is to set the Tyne busy. It is not the Thames that I am concerned about, or that this House should be concerned about, but the Tyne and the Tees and the North country generally. Many are called distressed, but few are chosen Special Areas. We from the Special Areas lament the fact that we are so. We do not want any favours. We are not used to them. All we ask is fair play. The hon. Member for South Bradford (Mr. Holdsworth) talks as one of the old, rigid, hard, Manchester school about private industry requiring help. We young Liberals 30 years ago deliberately cut ourselves away from that.

This Bill is another example of social service. I referred to my own experience regarding attempts at beginning businesses at Tyneside. I have had people coming there with sound, new industries. I have taken them to the managers of the chief banks in Newcastle. They have said it was a good business, but there were no balance sheets for three years to show as a tangible thing that could be seen in black and white. When I went to the Commissioner with these schemes—I will not divulge them, because when this Bill has gone through the probability is that I will get them—and propounded such a scheme as this Bill does, he said that he was sorry he had not the power to do it. Now he has asked for that power, and this Bill is to implement what he desires. As one who has lived in the depressed areas I hope this Bill will be the forerunner of better days. If we get the new Cunarder, if Sir John Jarvis gets Jarrow going, if we get these trading estates on Tyneside, we shall not want favours.

10.55 p.m.

Mr. GALLACHER

The Chancellor of the Exchequer by the introduction of this Bill seems to have caused great division in the depressed area occupied by the Liberal party. The representative of the Liberal party who spoke last objected to the Bill on the ground that it subsidised private enterprise. Private enterprise, he said, had always stood on its own feet. That's not true. Private enterprise never at any time stood on its own feet. Private enterprise has always ridden on the backs of the working classes. The point about the Bill is that it represents an economic anomaly. Private enterprise in this country is developing on the lines of big business. The big businesses have wiped out the small businesses, and the big businesses have produced the derelict areas. Instead of tackling big businesses in order to overcome their destructive effects, as expressed in the distressed areas, we are back at the beginning again. We are seeking to build up small businesses. Whether we like it or not, we may have thrown over the Manchester school, but we are going beyond the Manchester school. We are back at the beginning again. Big business will destroy small business in the future, as it has destroyed it in the past.

If small businesses are to be set up they will have to be businesses that are of a progressive character, in the sense of being businesses that will stand and be able to face the possibility of continuous development. They will have to be businesses that will meet the urgent needs of the people in the distressed areas or the people in the country generally. I should like to ask the Chancellor of the Exchequer a question arising out of a remark made by the hon. Member for South Croydon (Mr. H. G. Williams), who expressed the view that so many things were happening in the House that he did not like, that he was beginning to get the idea that he was narrow-minded. The hon. Member's ideas are very slow of development. I am certain that the rest of the House had that idea long ago. The hon. Member said that this Bill would allow people to get money for the starting of businesses when they could not get it by ordinary methods from the ordinary financiers. If that be so, I would ask the Chancellor of the Exchequer whether he would be prepared through this Bill to assist a really progressive enterprise, one that is bound to advance, one that will meet the urgent need of the people in the distressed areas and of the people of the country generally, and that is a Communist printing press and publishing house in these areas.

10.59 p.m.

Mr. LEWIS

The very fact that to-day we speak of certain areas of the country as being depressed areas is of itself a striking tribute to the work that has been done by the National Government, because under the last Labour Government the whole country was a depressed area. It is only by contrast with the ever-widening circle of prosperity in the country as a whole that we now see certain areas still depressed. That is very comforting for the country generally, but it is not much comfort to those who live in the depressed areas. I agree with what the hon. Member for South Croydon (Mr. H. G. Williams) said as to the ultimate remedy being a general improvement in the trade and industry of the country. At the same time I feel bound to sympathise with the pleas that are made by hon. Members representing depressed areas for special consideration for those areas.

The right hon. Gentleman the Chancellor of the Exchequer offers this Bill as one attempt to assist those areas. He does not make extravagant claims for it. It is pointed out that there is no one general remedy, but if we apply many small remedies, the cumulative effect may produce what we desire. In Committee I ventured to criticise certain obscure passages in the Bill and to suggest that the control over the expansion of the company should be left to the House of Commons, and not with the Treasury. My object in speaking to-night is to make it clear that, despite those criticisms of detail, I support the general principle of the Bill. I do so with my eyes open. I have no doubt myself that there will be losses under the Bill, but I think the country will not be unduly critical of such losses provided that the successes greatly outweigh the failures. I am glad the Chancellor has brought the Bill in, and I wish him luck with it.

11.2 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

Such criticism of the Bill as has been expressed in the course of the Debate has not been of such a serious character as to require much reply from me, but at the same time I should not like to be thought discourteous in not making some reply to the speeches to which we have listened, and for that reason I wish to say a few words. First, I would like to thank those of my hon. Friends who have expressed their support of the Bill. My bon. Friend the Member for the Rushcliffe Division (Mr. Assheton) made a speech which was, I think, an extremely valuable one, for he showed us exactly what the difficulties are in the way of finding what is called finance for small industries. I would also like to thank my hon. Friend the Member for Wood Green (Mr. Baxter) and my hon. Friend the Member for Gateshead (Mr. Magnay) for their support, and I must, not omit the hon. Member for Middlesbrough, West (Mr. K. Griffith), who made a speech which showed, I thought, a very fair and reasonable outlook and an understanding of the scope and also the limitations of the Bill. With regard to the criticisms of the party opposite, they were really devoted more to what is not in the Bill than to what it actually contains, but if they will allow me to say so, they suffer from the defect of always overstating their case.

Mr. BATEY

We come from the depressed areas.

Mr. CHAMBERLAIN

What is the use of their repeating that we have done nothing for the unemployed? Only in the papers this morning they might have read that the numbers of the unemployed have again been reduced by a further 50,000, while the numbers of persons in employment have reached a new high record. What is the problem which we have to consider? The hon. Member for Spennymoor (Mr. Batey) says that the reason for the condition of the special areas is that they were dependent upon certain big businesses, certain heavy industries, and, like the hard-boiled Tory that he really is, he has no idea of doing anything but to revert to the old orignal plans, and to say, "Spend money again in setting up the old industries." The coal industry in some parts of Durham has come to an end because the pits are exhausted, and no amount of money is going to put coal back again into the ground. The hon. Member for Rhondda, West (Mr. John) urged that there should be more scientific research as to improving the uses of coal. I certainly am not going to decry the fullest scientific research, but I must point out that the results of scientific research into that question have been to show that less and less coal is needed to produce the same results in both the electricity and the gas industries. It is well known that the amount of coal required to do the work which used to be done has been considerably reduced by discoveries and inventions. I accept the suggestion of the hon. Member for Spennymoor that the difficulty is caused by the failure of the big industries upon which these areas have been almost exclusively dependent in the past. Surely the hon. Member will agree that in addition to doing anything you can to assist these big industries, the best thing is to try to bring new industries into the district. His attitude is not a helpful one. He says that it is not the slightest use bringing new industries into these areas.

Mr. BAT EY

I did not say that.

Mr. CHAMBERLAIN

I understood the hon. Member and also the hon. Member for Rhondda, East (Mr. Mainwaring) who said that there was not a line or a word in the Bill which would be of any use to the depressed areas. The hon. Member for Rhondda, West (Mr. John) said that it was not going to provide work for the unemployed. If you condemn the whole thing from the beginning it is not going to do much good. The more you condemn it the less likely is it to be of any good.

Mr. MAINWARING

I said that there is not a word or line likely to assist our areas. It is not that we do not want new industries, but because there is no promise in the Bill of new industries coming to these areas.

Mr. CHAMBERLAIN

The hon. Member for Spennymoor began by saying that the Government had continually raised hopes in the special areas and then disappointed them, and in the rest of his speech complained that I had not sufficiently raised the hopes of the special areas, because I did not give a more exaggerated idea of the benefits which would come out of the Bill. I have tried to preserve a happy mean on this occasion. The hon. Member for West Middlesbrough suggested that I had gone too far in the other direction and had not said enough about its possibilities. We are continually told that the Government are resenting the Bill as a solution of the problem of the special areas. That is not the intention or the purpose of the Government in this Bill. It is an attempt to meet one particular point which has been put up to us, and that is the difficulty of finding finance for new small industries in these areas.

The hon. Member for South Bradford (Mr. Holdsworth) belongs to the old individualistic school and the hon. Member for West Fife (Mr. Gallacher) declares that I have brought division into the Liberal party. The hon. Member for West Fife is in the happy position of belonging to the only party in which there cannot be any divisions. I am not one who wishes to say anything in derogation of private enterprise. I am a. believer in private enterprise, but I am not quite so extreme as the hon. Member. Among other amusements of my leisure hours is horticulture, and I know how it is possible to start in a greenhouse, plants which afterwards can be planted out in the kitchen garden to produce useful and nutritious food because it has been possible to give them a little start. That is a parallel with this case. As one of my hon. Friends said, if this experiment proves conclusively that, by taking some risks, which are sufficient to prevent the ordinary sources of finance from operating in these eases, it is possible to do some good; if by our example we can show that those risks are capable of being overcome and that there is a real field for this financial work, without incurring undue losses, then I am sure private enterprise will not be slow to follow our example and this small experiment may lead to something far bigger—big enough even to meet the ideas of the hon. Member for Spennymoor of what I ought to do. It is not put forward as a solution of the problem. As the Special Commissioner truly said, there is no one measure which can solve the problem. It can only be solved by a number of measures, addressed to different sections of the problem. This is one of them, and I hope the House will now be ready to give the Bill the Third Reading.

    c338
  1. CIVIL LIST BILL. 6 words