SPECIAL AREAS (AMENDMENT) BILL.

HC Deb 06 April 1937 vol 322 cc49-163

Order for Second Reading read.

4 p.m.

The Under-Secretary of State for Scotland (Mr. Wedderburn)

I beg to move, "That the Bill be now read a Second time."

The Debates we have had on the Financial Resolution have already covered very fully the subject of this Bill and have already provided an opportunity for criticism not only against the provisions of the Bill itself, but also against its almost complete dependence on the Financial Resolution, which has made it impossible for hon. Members to move certain kinds of Amendments which they wish to bring forward. I do not think that I need enter again into the reasons which, in our view, justify the inclusion of nearly all the proposals which are contained in the Bill within the terms of the Financial Resolution, but I expect that most of the criticisms which will be brought forward this afternoon will be on the ground that the Bill ought to contain a great deal more than it does contain. In explaining its provisions I shall do my best not to exaggerate its merits, and I hope I may be allowed to ask for the indulgence of the House in dealing with a subject with which until very lately I have been familiar only as a private Member who happened himself to represent a Special Area in this House.

The Bill is so much related to other branches of policy that I think the Debate must necessarily be a wide one, especially on account of the Amendment which has been put on the Paper by the Leader of the Opposition, but I shall only begin with a bare mention of those other parts of our policy which ought to be considered in conjunction with the Bill but with which the Bill itself is not directly concerned.

In regard to' the special measures, apart from general policy, which are being taken by way of subsidy or by way of chemical experiment to help the recovery of those older industries on which the Special Areas so largely depend, I have nothing to add to what has already been said in the Debates immediately before the Recess. In regard to Government orders for armaments which, although we do not profess to regard them as a permanent remedy will be an exceedingly valuable aid, the figures which were given in the White Paper that was discussed in March showed that a total amount of £41,000,000 worth of orders had been given to distressed areas, of which £24,000,000 were within the limits of the scheduled areas themselves. Since then that figure has been increased to a total of £57,000,000 over the whole of the distressed areas, of which £35,000,000 is applicable to those which are scheduled.

In regard to land settlement, the White Paper in the first paragraph stated that schemes of land settlement—this relates only to England—have been undertaken to provide full-time holdings for over 2,000 families, and these will involve an expenditure of over £2,000,000 for equipment. That figure has since been increased to 3,000 families, which number the English Commissioner has authority to proceed with by settlement. In Scotland the position is not quite the same because since 1934 we have had a separate Act for Scotland enabling the Department of Agriculture to settle families on holdings in all parts of Scotland. The Department's work includes the settlement of 450 families from the Special Areas themselves, and, as was announced last month, another £200,000 has recently been made available for this purpose.

With regard to the total expenditure of the Commissioners, which until now has been devoted mainly to schemes of assistance to local authorities or to local development councils, who are endeavouring to make these areas more attractive to new industries or to schemes of social improvement, when we were debating this subject a few weeks ago the latest figures available were those given in the White Paper, namely, a total commitment of £9,000,000 on the part of the English Commissioner and rather more than £2,000,000 in Scotland. Since that time the commitments of the English Commissioner have increased to £10,500,000. I have not obtained in the Recess any new figures from the Scottish Commissioner, but he is of course equally proceeding with the development of that part of his duties.

As for the employment situation in these areas, the latest figures which we had before us the week before last, when we were discussing this subject, were those given in the White Paper. They showed a reduction of 119,000 in the unemployment figures of the Special Areas during the two years that the Act has been in operation, accompanied only by a reduction of 20,000 in the total insured population. There was some disagreement in our previous debates on the question of how far this was due to transference. I understand that the total number of new jobs which were provided in that period within the Special Areas was something like 80,000, and the discrepancy between the figures which were given showing the numbers of men who have been transferred and the total number of unemployed was accounted for by the fact that, if it had not been for transference, instead of having a reduction of 20,000 in the insured population there would have been in the natural course of events an increase of some 70,000 or more in those parts of the country. But I am glad to say that since the White Paper was published, as was shown by the March figures, there has been a further reduction of more than 10,000 of those who are unemployed in the Special Areas, the figure being now 324,000 compared with 335,000 when we were last debating the matter.

The feature of our policy which particularly falls to be considered in discussing this Bill is, of course, that which aims at the introduction of new industries into these parts of the country, both for the purpose of increasing the total volume of employment and of ensuring that in future the inhabitants will not be so entirely dependent on a single variety of production. The first Clause of the Bill simply continues the duration of the previous Act for another two years, until 1939. Clause 2 gives the Commissioners power to let factories in the Special Areas at economic rents, to undertakings carried on for gain, for the purpose of inducing persons to establish such undertakings in those areas. Under the old Act of 1934 it was laid down that the Commissioners could not themselves carry on an undertaking for the purpose of gain and could not provide financial assistance to an undertaking carried on for that purpose. That, of course, considerably restricted the power of the Commissioners in making arrangements under which factory accommodation could be provided for new undertakings. All that it has been possible to do has been to make arrangements for trading estate companies, to which I shall refer more particularly in a moment.

Mr. Logan

Does the power under that Clause not enable the new factories to be in competition with factories already established?

Mr. Wedderburn

I shall say a word or two also on that point. That was the great objection that was raised in the Debates on the 1934 Bill, as the hon. Member knows. The great objection at that time was to enabling the Commissioner to give assistance to undertakings carried on for profit, and if it had not been for that obvious objection, a provision of this kind would no doubt have been included in that Bill. The purpose of the present Clause is to widen the powers of the Commissioners in this respect and to permit the provision of factories at economic rents, not only with trading estates themselves, but directly by the Commissioners in other parts of the areas if they think right.

Clause 3 empowers the Commissioners, for the purpose of inducing persons to establish industrial undertakings in any, of the Special Areas, to give financial assistance to such undertakings in places approved by them in those areas, and that assistance will take the form of an agreement to contribute towards the rent or Income Tax or rates payable by an undertaking within a maximum period of five years from the date of the agreement. Full discretion is left to the Commissioners in regard to the amount, subject to the five years limit to the duration of the contribution. We think that this flexibility will enable the Commissioners, with the advice at their disposal, to minimise the possibility that similar undertakings, either in the Special Areas or in other parts of the country, may be adversely affected. That is the substance of the point which the hon. Member for the Scotland Division of Liverpool (Mr. Logan) mentioned just now.

I think it was the hon. Member for Bishop Auckland (Mr. Dalton) who said in the Debate on the Financial Resolution that he thought this width of discretion was undesirable, and that he would prefer some general formula under which a new undertaking established in these areas might enjoy some uniform reduction; and he said that in regard to the exercising of this discretion he objected to it being exercised both by the Commissioner and by the Treasury—by the Commissioner on the grounds of the invidious position in which it would place him, and by the Treasury on account of the probability of obstruction of every proposal brought forward. I do not think it would be possible to devise any scheme according uniform reduction under which this proposal would work satisfactorily. Take, for example, an industry which wished to establish itself at Gateshead. If that industry would otherwise have gone to Greater London, and if it is obviously going to Gateshead at some inconvenience and if it is also I he kind of undertaking which would be suitable to that district, there, I suggest, would be an obvious case in which the Commissioner would be justified in stretching these concessions to their greatest extent. But suppose it were an industry which, if it had not gone to Gateshead, would have established itself, let us say, in Middlesbrough, which is not within the boundaries of the Special Areas, and suppose it was going to Gateshead in order to get these advantages with a view to competing with similar industries in Middlesbrough, there, I suggest, would be a case in which these concessions could not be given. I hardly think it would be possible to devise any rule which would meet the great variety of circumstances and claims which might arise between those two extremes which I have mentioned.

Clause 4 deals with two comparatively minor points. One concerns the repair or improvement of streets which come within the statutory field of the Ministry of Transport. The existence of the Ministry's powers has prevented the Commissioners from making grants to local authorities for this purpose, although in practice the Ministry of Transport did not ever make grants for streets which are not mainly required for through traffic. Under this Clause the Commissioners will be able to make grants for streets in the Special Areas which are certified by the Ministry of Transport to be of this character.

Mr. S. O. Davies

Are we to understand that that applies to county boroughs as well as to urban districts and counties?

Mr. Wedderburn

Yes. Under the 1934 Act a Commissioner was prevented from making any grant which might have been made by a Government Department or local authority, and these were grants which might have been made by the Ministry of Transport, although in practice they were not made. The second point in connection with Clause 4 concerns works of field drainage which may be undertaken by private owners on land which is occupied for the purposes of gain. I think it was explained on the Financial Resolution that there is a difference between the position in Scotland and England in this matter. The Department of Agriculture in Scotland already possess this power, which is not possessed by the Commissioner in England, and this Clause is designed to equalise the position between the two countries.

Mr. Logan

With respect to the first point mentioned in connection with Clause 4 would traffic which would be going through a tunnel from one borough to another though not the regular traffic of the borough be able to get such assistance as is mentioned?

Mr. Wedderburn

I should be grateful if the hon. Member would put his question down with regard to tunnels.

Mr. Logan

I am asking about increased traffic which may come from the Northern counties and pass through Liverpool, using the tunnel. Would they be entitled to get a grant in respect of it?

Mr. Wedderburn

If the tunnel were mainly used for through traffic, and the Ministry of Transport were already in practice making grants, it would not. The point is that there are some roads towards which the Ministry of Transport does not in practice make grants, although it has the power to do so. In regard to these lesser details which the hon. Member raises I am afraid I must have notice of his questions.

Mr. N. Maclean

Since Scotland already possesses powers in regard to field drainage, will the Minister give some indication of how those powers have been used?

Mr. Wedderburn

I cannot at present give an account of the drainage work which has been done in Scotland, but I can reproduce the reports of the Commissioners if the hon. Member will be good enough to give me notice. The point of this Clause is that it equalises the position between Scotland and England in this respect.

Clause 5 is the Clause on which, perhaps, the greatest amount of confusion may arise, since in some respects it is independent of Clause 6 but in others complementary to it. It provides means for assisting the industrial development of areas which are not included in the First Schedule of the principal Act by contributing to the share capital or making loans to site companies set up to provide factories in those areas. In considering claims for this form of assistance the Treasury will act on the advice of an Advisory Committee which will be appointed by them, and the amount of the assistance is limited to 33⅓ per cent. of the paid-up capital subscribed from private sources. In order that a site company may be eligible for this form of assistance, the area in which it operates must satisfy the Minister of Labour that it fulfils the conditions laid down in Sub-section (2) under the three paragraphs (a), (b) and (c), namely, that there has been severe unemployment in the area, and that the employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment by reason of the general depression in those industries.

I think it was made plain on the Financial Resolution that that definition would not rule out localities which might be dependent on some particular undertaking which had closed down, although other undertakings in the same industry in other parts of the country might nevertheless be in a prosperous condition. In considering whether an area satisfies these conditions the Minister of Labour will have the assistance of another Advisory Committee to be appointed by himself. If the Committee recommend him to apply the Clause in the area in question he is not bound to accept their recommendations, but without a recommendation from the Committee he cannot direct that the Clause shall apply. Having regard to the part to be played by this Committee it seems impossible to attempt to define with any precision the practical application of these conditions to particular places. The House will see that there are two separate Advisory Committees, one appointed by the Minister of Labour to advise him with regard to the claim of localities, and the other appointed by the Treasury to advise them as to the amount of assistance to be advanced. One Committee is to relieve the embarrassment of the Minister in making a choice, and the other Committee restrains the parsimony of the Exchequer. The funds to assist these site companies are to be found out of moneys provided by Parliament. The House will see that there is no limit to the amount of money which may be so furnished to the site companies, though there is a limit imposed under the next Clause on the loans which may be advanced to undertakings which establish themselves on these or other sites.

Clause 6 empowers the Treasury to make loans to two classes of undertakings established after the passing of the Bill, the first, those established in any of the Special Areas, and the second those established in an area approved by the Minister of Labour under Clause 5, and occupying factories provided by the development site companies. In administering this Clause the Treasury will act on the advice of the Advisory Committee which is referred to in Clause 5, which they have appointed to advise them with regard to advances made to such companies, and the amount of the loans to be provided under this Clause is limited to £2,000,000. Complaints have been made about this limitation, and it has been suggested that a larger sum ought to have been provided, but it must be remembered that the fund is a revolving fund, and that as soon as any loan is repaid the money may be used to issue another loan to another company; and, further, the Clause does not impose any restriction as to the terms on which the loans can be made. It is designed to fulfil one of the recommendations of the Commissioners who said that in some cases provision ought to be made for advancing money to new undertakings on easier terms than they would be able to obtain in the ordinary way from the banks or by public subscription.

Although hon. Members may not regard these provisions as sufficient, I think they will agree that in the aggregate they are not inconsiderable. There is no limit at all to the amount which may be provided by the Treasury for the relief of rates, or Income Tax, or of rent which any of these new firms is liable to pay. Perhaps the House would like to have any information I am able to give them about the kind of industries which are at present being attracted to these trading estates and the progress which is being made in setting them up. Of course, the provisions of this Bill are not confined to factories establishing themselves on trading estates. They may be established in any part of the Special Areas, but at the present time these trading estates provide the most immediate and helpful method of rapidly constructing a large number of new factories. The Treforest Estate in Wales is only in the very early stages of its development, and it was announced the week before last that so far only two factories had been attracted there. Since then another has been agreed upon, so the total at the moment is three, and they are estimated to employ about 250 men.

Mr. Graham White

Does that mean 250 men employed in the construction of them?

Mr. Wedderburn

Oh, no, there will be more than that employed on the construction of them. That is the number which will be employed when they start operations. The Team Valley Estate in Durham is in a slightly more advanced stage. It was announced three weeks ago in our previous Debates that out of the large number of inquiries which they had had they had already agreed to establish 20 factories, and I am glad to say that since then the number has increased to 27, and that negotiations for a further six are now in an advanced stage. Colonel Appleyard, in a speech last week, estimated that the men who would be employed by these initial 27 factories would probably number about 2,000. The Scottish Trading Estate is the most recent of all. The site was selected only two months ago, and its development has not yet reached a stage at which any building can be begun. I have made inquiries from the Scottish Estates Trading Company, and they inform me that the number of firms which have already approached them in the hope of obtaining sites on these estates is very encouraging. I have a list here of the kinds of industry to which the firms belong.

I will give a few examples, not because I wish at this stage to discuss their merits or their suitability, but merely to indicate the variety of the undertakings which are approaching the trading estates companies, in the hope of obtaining sites. Inquiries have been received from firms engaged in the furniture trade, the shoe-polish trade, the stationery business, the manufacture of lamps, boot repairing, canning, artificial silk, the making of silk goods, clothing, non-ferrous metals, pneumatic tyres, piano manufacture, steel windows, aerated waters, black lead manufacture and oil regeneration, and a great many others, among which two banks have indicated their desire to establish branches. These three estates, even the Team Valley Estate, are still in a very early stage of development. We hope that the advantages offered by the Bill will accelerate their progress, and perhaps increase their number.

I understand that the opposition to the Bill will not be on account of what it contains but almost entirely on the ground of its inadequacy, but the Government have never claimed that the Bill was adequate in itself. I think we have never suggested that the problem of the Special Areas can be dealt with by any single piece of legislation. Whatever hon. Members may wish to be done further, I hope that they will not be disposed too much to disparage the contents of the Bill. It will not be to the advantage of the Special Areas to belittle the very valuable inducements which the Bill contains, and which ought to be used in the widest possible fashion. Even if we were fortunate enough to have had a much greater recovery in the heavy industries than any of us expects, and if we found it were possible to re-employ the bulk of those who used to be engaged in shipping and coalmining, I think even then we should not be relieved from the duty of trying to correct the unequal balance of industry which has always been such a serious danger to the stability of our economic life. It cannot be a good thing to have great aggregations of specialised industries and industrial workers whose livelihood may be largely dependent upon, perhaps, commercial policy abroad, or the course of foreign lending by British investors, or the desire by some foreign country to industrialise itself and then, having become industrialised, to compete against the countries from which it obtained its first material.

The official Amendment put down by the Opposition demands that we should have bold comprehensive measures "forming part of a national plan for the reorganisation of industry and the full utilisation of the nation's resources." I do not complain either of the vagueness of those phrases or of their familiarity; for I hope that we are all doing our best to aim at the reorganisation of industry and the fuller utilisation of the nation's resources, even although some of us may feel that none of those a priori plans which have so far been published on paper are as comprehensive or as useful as their authors intended them to be. But I believe that we have now a greater opportunity than we have had before of bringing about that greater diversity of production which we desire. We are very frequently asked what plan we have in order to provide against the possibility of another great industrial depression. I remember in 1934 we were informed by a great many economists that we were then at the height of an industrial boom, which must almost immediately be followed by the inevitable slump, although indeed many of us, who represent depressed and Special Areas, were hardly conscious that there had been any boom at all. Again, in 1936, before the rearmament programme had been fully begun, but after another period of general recovery over the whole country during which improvement had at last begun to reflect itself to a substantial extent in the unemployment figures of the Special Areas themselves, we were warned again on all sides that those unhealthy signs were visible which always preceded the culmination of a boom.

I have always been rather sceptical about the old-fashioned theory that commerce is predestined, by some immutable law of nature, to undergo these alternations of prosperity and depression. No one would be rash enough to predict positively that the country has yet put itself in possession of any certain means of escaping from such cycles in future, but I think it is reasonable to expect that for some years at least the number of persons employed in Great Britain will continue to increase and that the tendency of wages to rise, now visible in a great number of industries, will continue. If that be so, it will mean greater purchasing power, which will involve a demand not only for a greater volume, but for a greater variety of goods which it is possible now, on account of the protectionist policy which we have established, to manufacture in our own country with some reasonable degree of security. The greater variety of occupation and production which we all seek to obtain cannot be achieved alone by the Government, by Parliament, by employers of labour, by trade unions or by local authorities, but we think that the provisions of the Bill will greatly assist all those forces to combine, supported by public opinion, in order that we may be able to build, upon a less precarious foundation, the industrial fortunes of our country.

4.40 p.m.

Mr. Lawson

I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof: this House regards with grave concern the plight of the people in the distressed districts, regrets the refusal of His Majesty's Government to adopt effective remedies together with a revision and extension of the scheduled areas, and is of opinion that the economic life of these communities can only be restored by bold comprehensive measures forming part of a national plan for the reorganisation of industry and the full utilisation of the nation's resources. It is no light task for a Minister to introduce a Bill of this description, and it is far from an enviable task for an Under-Secretary. I am sure that the House listened with interest and with some admiration to the simple and disarming explanation given by the hon. Gentleman. Probably the Minister of Labour will envy the hon. Gentleman. Before the hon. Gentleman finished, the right hon. Gentleman must have realised that modesty has its virtues. Toward the end of November last year it appeared as though the Government intended to continue the old Measure automatically. We were suddenly informed that the Special Areas Act was to be in the Expiring Laws Continuance Act. That was a startling announcement, and it aroused considerable antagonism in all parts of the House and considerable feeling in the country. Those who have had responsibility for speaking on the Special Areas problem might well pay tribute to the general liveness of the social sense in this country, and to the fact that the people who are in touch with the Special Areas, and who might be forgiven if they were cold or indifferent about them, were extremely disturbed about the state of the masses of people in those areas.

I wish that that feeling had been reflected in the Government. The Government were finally compelled by certain of their supporters, as well as by representations from this side of the House, to take heed of that feeling, which was abroad in the country and was expressed in every kind of newspaper. This Bill is the result. Whatever good or ill may be fit it is there, not because the Government voluntarily decided that something should be done, but because they were compelled to take action, by the public opinion reflected in this House at the time. That fact shows itself in the nature of the Government's proposals; the Government have given as little as they could. What they are giving represents the maximum which could be forced from them in the circumstances. They made it quite clear, as the House learned with surprise, some weeks ago, that they were going to hold firmly in hand not only Members of their own side but the Opposition. They presented a Money Resolution which astounded this House because it was so explicit that it might have been introduced as the Bill—which indeed, with very little change, is the case.

The hon. Gentleman who introduced the Bill was evidently disturbed, and he reflected the official disturbance, about the feeling that exists generally in the country as to the statements made by the Government in their White Paper about what has been accomplished in the Special Areas. The hon. Gentleman started by saying that he had been informed by the Ministry of Labour that, while there were 20,000 more people employed, there have really been 80,000 new jobs. Does that mean 80,000 more persons employed? The Government must be hard put to it when they come to the House with a figure which quite obviously is a turnover. I know that the Ministry of Labour make the most that they can about what they call their placings, and, if this figure represents placings the in- formation is of no value at all. I am going to admit—because I do not think it does this problem any good, or does any good to the people in the Special Areas, to burke the facts—I am going to admit that in certain parts of the Special Areas there is a quickening of employment; if the Minister wishes to call it so, there is an improvement.

I make that admission at once, but I would also tell the Minister, when he speaks about a reduction of 120,000 in the number of people unemployed, that the Chancellor of the Exchequer was very careful not to say that there were 120,000 people more employed. A Member behind him, however, reflecting the general tendency on the part of Members of this House and the tendency in the country, accepted that reduction of 120,000 in the number unemployed as an increase of 120,000 in the number employed. The hon. Member for Darlington (Mr. Peat) did that; he said that 120,000 more people had been employed. We know now that that is not the fact. But what is the fact is that this figure is mostly the result of great masses of people having been transferred to other parts of the country. I notice that the tendency on the Government Bench in previous Debates has been to try to burke that fact, but really it cannot be done. The Commissioner himself, in Appendix IX of his Third Report, shows that in the first eight months of last year practically 30,000 people were either transferred or transferred themselves from the Special Areas, and taking the figure up to the end of the year it was 40,000. If one looks at the figures, one sees that during the last 14 years an average of 40,000 people have left the Special Areas, some of them directly transferred and some who transferred themselves. Therefore, it is a fair inference that during these two years 80,000 people were either transferred or transferred themselves, and, as I shall have something to say later about the question of transference, I want to make it quite clear, first of all—and it is important that this should be understood—that there are not 120,000 more people employed; and, secondly, that at least two-thirds of those people who were transferred to other areas were young people, and that in the main the areas are somewhat poorer by the loss of their mobile life.

Having made the admission that there is a slight improvement in some of these Special Areas, I must say I was astonished at the attempt of the Chancellor of the Exchequer, as well as of the Minister himself, to give the impression that there has been a great improvement in those areas. That is alien to the truth. The Chancellor now depends upon what he calls the cumulative method. Certainly in his speech he tried to add fact upon fact of a minor kind in order to try to make the whole look really important, but when he first began to face this problem, in 1934, this was the spirit in which he did so: Although in the present case we need not describe the disease as desperate, it certainly is sufficiently exceptional to warrant exceptional treatment. What we want here, as it seems to us, is something more rapid, more direct, less orthodox if you like, than the ordinary plan."—[OFFICIAL REPORT, 14th November, 1934; cols. 1995–6, Vol. 293.] Now, of course, he has had two years of this problem, and the Government rather depend upon what they call the cumulative method. I think it is worth while reading the statement which the Minister of Labour made in his speech, because he gave us some extraordinary figures, though I must say I could not quite see the point of them for his own purpose. They are, however, rather useful for this purpose. I would ask the House to notice these figures, and I think it is important that the country should understand them. The Minister said, on 9th March: From January to December, 1936, in the 41 districts of the North-East Coast and Northumberland, the districts with under 20 per cent. of unemployed were so; between 20 and 30 per cent., 15; over 30 per cent., 16. In West Cumberland, of the 13 towns and villages there were two with under 20 per cent. of unemployment, two with between 20 and 30 per cent., and nine with over 30 per cent. of unemployment. In the 42 areas of Scotland there were 20 with under 20 per cent. of unemployment, 13 with from 20 to 30 per cent. of unemployment and 19 with over 30 per cent. of unemployment. In the 38 areas of South Wales there was one with under 20 per cent. of unemployment, five with 20 per cent. and under 30 per cent. of unemployment, and 32 with over 30 per cent. of unemployment."—[OFFICIAL REPORT, 9th March, 1937; cols. 1017–8, Vol. 321.] That is the tragic tale from official figures, and on the face of it I am astonished that there should have been such efforts to keep up appearances and to cover up the facts. I shall refer later to the survey of the South Wales area conducted by the University of Wales. It came out at the time when the Government were introducing their Money Resolution. It was a sad commentary upon this Bill, and showed how petty were the proposals of the Government in the face of this great tragedy. A few weeks before that, the Gibb Report on South-West Durham was issued, and I have seen nothing more sweeping than that report in its condemnation of the present system of capitalism—and I do not use the word lightly—under which we live. Here are people most of whom have lived their lives in that area, and are the descendants of people who have lived there for the greater part of a century engaged in mining.

Let the House use its imagination for a moment. In the last century there have been great explosions in that area, as in other areas in the country; there have been great floodings of pits; there have been killings at the rate of four every working day that the wheels went round. But when it comes to an improvement in science, when light industries are born out of the toil of these heavier industries, when something useful might be done, when some little improvement might be made in the lives of the people in those areas, the capitalist goes south; he leaves those areas; and all that can be recommended, after the people have paid such a great price as a contribution to our modern wealth, is that their villages should be levelled and that they themselves should be swept away without any recommendation as to where they should go. There is something wrong in a system which is responsible for a state of things like that. There are people in South-West Durham living in the midst of the Fells who are among the finest and roost virile of our working-class people in this country. They are a courteous people, naturally gentle; I never met people who would give greater credit to other people than they do for very little. But apparently this kind community is to be obliterated. The case which the Government set out to make in their White Paper, nine of the 11 pages of which are devoted to certain things that have been done, is belied by the facts, and I think it is worth while for this House to try to remind the Government once more of the real, tragic conditions of the people in many of these areas.

Attempts have been made to point out, and the hon. Gentleman has given us further figures to show, how many munition orders have gone into these areas. What improvement there is in these areas is practically directly due to the new rearmament programme. The last report issued by the Unemployment Commission stated that the reduction of unemployment was mainly but not wholly due to armaments, but in the Special Areas, from my own observation, it is practically wholly due to the armament orders. Warships are being built; men are making munitions and the pits are working more regularly. But there is an outstanding thing to be noted. That is that there are no pits being opened. It is the same with regard to other industries. There is no increase in the heavy industrial units. If I dwell on this matter it is because I want the Government to take heed of the terrible danger to the Special Areas that their remedies may be thwarted by a false sense of satisfaction prevailing as a result of the armament orders.

I would be a hypocrite if I were not pleased at seeing people in my own division employed, while regretting, indeed, the cause of their employment. There is going to be a munition factory in my constituency. It is the re-opening or rebuilding of a munition factory which employed thousands of people during the War. The Government brought in Belgian refugees and built a wooden town at a small village called Burton between Newcastle and Durham. It became a hideous collection of shacks, and, when the making of munitions there had finished, it would have been difficult to find a more miserable population or a greater problem than that which presented itself in the way of unemployment. I am not sure that my own satisfaction now at seeing people employed again is not more than balanced by the fear of what may happen after the armaments programme has been completed and the fear that as the years go on the problem may be intensified. I have dealt with this side of the problem because I felt it necessary to correct impressions as to what was the real position in the Special Areas.

This Bill does a certain number of things. It arranges for the letting of fac- tories and contributions to rent and Income Tax; it allows grants to be made to local authorities for repair of certain streets and to landowners for drainage. But although it is definitely stated that these grants are to be made to the Special Areas, I am informed by the hon. Member for Merthyr Tydvil (Mr. S. 0. Davies) that already the Sub-Commissioner has informed the Merthyr Tydvil authority that the grant for repair and making of streets is not to be given to a county borough. The Minister should face that matter, because Merthyr Tydvil is a Special Area. The Bill also deals with sites and arranges for loans, but it leaves untouched the proved fundamental weakness of the Special Areas Act. One of the most striking suggestions made by the Commissioner before he resigned was contained in his Third Report. It is to be found on page 15, paragraphs 43 and 44. The Commissioner wrote: In my first report I thought it necessary to explain the directions in which my powers as Commissioner were limited by the Special Areas Act. This was done in no spirit of complaint, but in order to rebut certain criticisms which had been levelled against my administration. The experience of the last 18 months has served clearly to confirm what was said on the matter in my First Report. The Commissioner acts in the words of the Special Areas Act 'under the general control' of the Minister of Labour. No difference is made in that respect. I ask the Minister to correct me if I am wrong when I say that there is no difference whatever in the status of the Commissioner. The Commissioner has no more authority now, except in one, if not two, specific cases mentioned in the Act. As far as making the grants is concerned, there are two advisory committees. Instead of merely having the Nuffield Trust and S.A.R.A. and the Department to deal with, he has now two more committees between him and the Department. I ask the Minister to meet that point and say whether, apart from the particular grants, specifically mentioned, that the Commissioner can make, there is any modification in the slightest degree whatever in the status of the Commissioner. This is what the Commissioner said upon the matter in his Third Report: He can propose the initiation and prosecution of any number of measures, but in questions involving new principles or substantial expenditure of public money he is obliged to get the agreement of the Minister, who in turn has to comply with normal departmental practice in regard to Treasury sanctions. The result is that the Commissioner is one stage further removed from final authority in matters of expenditure than an ordinary Government Department. He concludes: It is difficult to see how the office of Commissioner can be usefully continued unless it is endowed with authority to take independent action. This I do not suggest. The desirability of direct administration by Ministers will require re-examination if the Government accepts my recommendations, in view of the increased responsibilities which would be involved in their operation. In so many words, the Commissioner says that in his opinion there should be a Minister acting directly in this matter for the Special Areas. That is not a new idea. It was known to us in the Debate on the introduction of the original Special Areas Bill. I remember the "Times" suggested that there should be a director of operations untrammelled by Departmental limitations and responsible directly to the Cabinet. The Minister in his speech on 9th March made a great to-do about permission having now been given to the Commissioner to clear certain sites. Gateshead was one instance he mentioned and there were other places where there were sites, which the Commissioner said—and said truly—were at present hideous and should be cleared. It is two years, however, since the Commissioner first complained that he had no power to clear such sites. For two years he has been making recommendations that he should be given the power. As a matter of fact he has not been, and is not now, any more influential than the doorkeeper in any Department. He is useful to the Minister as a kind of shadow boxer.

The Minister has hardly treated tins matter seriously. If he had done so the First Report of the Commissioner would have received far more serious consideration than it has received. The Minister must see that there can be no proper facing up to the problem in the Special Areas until there is a Minister in the House directly responsible for and making a full-time job of dealing with the many problems in those areas. Those problems, which are very great, have arisen not merely because of the bad trade or because something has temporarily happened to some industries, but because there is a second industrial revolution going on which has affected certain great industries. There has been a change in the form of power, and this has made the Government do things that it had not intended to do otherwise.

I sometimes admire the facility with which the President of the Board of Trade, the one time prophet of Free Trade, now proves what good work the Government have done because they have put the principle of tariffs into operation. But there is another side to that. The Government have given great powers to great corporations. Have they no responsibility for seeing that they should be carried out with proper regard to the social conditions of the people? The steel captains have been given great powers by the Government. When there was a great public outcry about their interference with the established steel plant in Jarrow, they told the President of the Board of Trade that in the future they would have due regard to social circumstances. But is it not the duty of some representative of the Government to use a firm hand in the changes that are taking place owing to the powers which the Government themselves have given? I remember very well that in one of his reports the Commissioner said that people were getting benefits through tariffs, and he suggested that they should have to get a licence before they could establish a factory. Great powers are given to the coal trade. Have the Government no say as to whether new pits should be opened? Have they no responsibility in the direction of industry?

That brings me to the question of location. Location of industry by the direction of the Government has to come sooner or later. There is no doubt about that at all. People plant factories down as though they have no responsibility to the country, as though all that matters is where they put their factory. They say it is cheaper in the South or in Birmingham, but is it? It has been pointed out that, if there was a proper system of accounting it would not be cheaper to come to these parts than to the North or to Wales. When new streets have to be made, schools have to be built, houses, drains and all the rest of it completed, and the workmen and the people in the area ultimately have to bear the cost, which under a proper accounting system would also come in the cost of establishing the factory.

Then there is the question of transference. I have never been prejudiced against transference. Indeed I have helped boys and girls and young men and women, where it has been necessary, to seek a better life in other parts of the country, and I should never be the apostle of a system which made itself responsible for stereotyping every community in every part of the country without due regard to natural movements in society, industrial and otherwise. But this transference problem has assumed an altogether different appearance from what it had when it was originally recommended. It was recommended by the Transference Committee in 1927 for certain young men, but they never contemplated that the only way of meeting the Special Areas problem was going to be by transference of the young men. Nor did they contemplate that boys and girls should be taken away from one part of the country to another wholesale, without regard altogether to the social conditions that would prevail. Hon. Members opposite often tell us that their boys and girls have to leave home. I reply to them that, if the boys and girls from working-class homes in the North and in Wales were leaving home under the same conditions as those of the wealthy classes, I should have no complaint. When fathers and mothers rear children, particularly boys, in working-class circles, they hope to get some little help from them some day. I ask the House to visualise this wholesale emigration. Some of these boys and girls go in a spirit of adventure which is admirable, but I think it is a violation of the spirit in which the scheme was adopted to depend to such an extent as the Government are doing upon this wholesale transference for a solution of the problem.

If there is any self-satisfaction about these proposals, which are petty and puerile in the face of the colossal problem that they are supposed to deal with, I will read from a leading article upon the situation in the Special Areas. It should carry weight with the Government, as it does with a good many people who are not in the Special Areas. When the Report on South Wales of the Universities' Survey came out this is what the "Times" said: Already the industrial decay of the areas has paralysed nearly a third of an industrial generation, and for men of 45 who lose a job there is little chance of returning to employment. The Government's training centres as a rule accept men only up to 25 years of age, and they must be single, and the age limit of entry to the instructional centres is 35. In South Wales 42 per cent. of the wholly unemployed men are over 35. No one imagines that the most energetic measures to retrieve the areas will ever place the over-fifties in employment again, and if any hope is to come to the rest, it must be provided now; for if migration from South Wales goes on at its present rate but a few years more, and the other influences on population remain unchanged, there will be an estimated loss of population in the area of 250,000 by 1945. Then the present industrial surplus will have 'disappeared.' The male population of industrial age—between 16 and 60—will have declined by 79,000 and there will remain a large and sad disproportion of persons either too old or too long unemployed to secure fully paid work. With the aid of these figures the imagination can picture the increasing decay and decrepitude—the creeping industrial paralysis—that will settle on the Special Areas unless they receive a great deal more assistance than the Government yet plans. That is a statement about South Wales. It is true of most of the great Special Areas. If the country could express itself I think it would say what a well-known newspaper supporter of the Government said in its heading upon these proposals, "Not good enough."

5.29 p.m.

Commander Bower

I intervene in order to draw attention to the fact that the Bill as at present drafted operates very unfairly against certain parts of the country which are not scheduled as Special Areas. I refer particularly to Tees-side. The Tees District Development Board has been operating now for some years and has spent some thousands of pounds of public and private money in advertising the district for industrial purposes in order to attract new industries. The iron and steel industry on the North-East Coast is of comparatively recent growth. A hundred years ago the population of Middlesbrough amounted to just 40. It is now, with its satellites, something in the neighbourhood of 200,000. That population is practically entirely dependent upon three great industries—iron and steel, shipbuilding and repairing and the latest addition, the chemical industry.

The hon. Gentleman who spoke last referred in terms which must have moved the whole House to the plight of South-West Durham, a part of the world with which I am familiar. I would point out to him that it is not the only place, and that in a great many other constituencies, notably my own, there are communities every bit as hard hit. Some of the smaller mining villages in Cleveland are dependent entirely on worked-out ironstone mines, and many of them are in bleak situations upon the edge of the moors. They have had a time since 1923, when so many of the mines closed down, which can only be described as horrifying. These people have suffered as intensely as anyone in Durham or South Wales, but they are not in a distressed area, and they are the people of whom I am thinking this afternoon. They are not a very great number of people, but some of the figures of unemployment are quite illuminating. I take one case in my constituency, Saltburn-on-Sea. It is itself a pleasant little seaside resort, but the area comprises several of these mining villages. In October, 1931, the percentage of unemployed insured persons between 16 and 64 was 95.4; and a year later it went up another 2 or 3 per cent. It is only recently that those figures have been markedly reduced. In those places there are ironstone miners who have been unemployed since 1923, and some of them are now of an age that they cannot possibly get back to undertake the arduous labour in the mines. But at the moment there is a shortage of ironstone miners. I received a letter only the other day from a director of one of the biggest iron and steel firms in the country, drawing my attention to the shortage, and saying that they could not get men. Men over 50 cannot possibly be expected to go back and to train themselves for the labour which they have been denied for so long.

It is on Tees-side itself, particularly in Middlesbrough, that this Bill will operate very harshly because, as I have already explained, we are almost entirely dependent upon three industries. There are very few areas in this country where the choice of industry is as limited as it is on Tees-side, and yet, under Clause 3 of this Bill, we have had recent experience of negotiations with a firm who intended to set up a factory on the North-East coast. They said, after protracted negotiations, that, other things being equal, they would come to Tees-side, but we have now heard that they have decided to go to Gateshead. We have no quarrel with Gateshead at all, but the firm were undoubtedly more attracted to Tees-side in the first place. But in Gateshead there is this trading estate being set up, and the conditions offered, particularly under Clause 3 of the Bill, operate so much in favour of such places as Gateshead and against Tees-side, that it makes it practically impossible for us to get new industries, without which it will not be possible for us to absorb our surplus of unemployed.

I now want to refer to Clause 5, because in Sub-section (2) it says: If the Minister of Labour, upon representations made to him, is satisfied as respects any area, not being or forming part of a special area— (a) that there is, and has been for a considerable time, severe unemployment in the area. That fits Tees-side all right. (b) that, unless financial assistance is provided under this section to a site-company which will operate in the area, there will be no immediate likelihood of a substantial increase in employment in the area. That fits Tees-side all right. (c) that employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment"— The last few words put us out of court altogether, for it goes on to say: by reason of general depression in those industries. Now we are not suffering from general depression. Everything on Tees-side is working almost to full capacity, but we still have this surplus of labour which is left over and cannot be absorbed except by the setting up of new industries, and yet we are put completely out of court, It appears to me that under this Bill we shall never be able to persuade any new industries to come there at all. I have been very carefully through the Bill and the Financial Resolution with a view to drafting Amendments, and, as far as I can see, it is going to be practically impossible. I do not want to labour the question of the Financial Resolution, but I cannot help thinking that the Government have not heard the last of it. However, I venture to express the hope that in future they will be a little more kind to us in drafting these things, so that we shall not have to face the difficulties which we are up against at the present time. I know that the Minister of Labour is well acquainted with the part of the world to which I am referring, and I also know, as do all members of the Tees District Development Board, how favourably disposed and willing he is to help us. I hope that my drawing attention to these two points with regard to Clause 3 and Clause 5 will enable him perhaps to relax a little and to give us a chance of absorbing into new industries the surplus labour which cannot be absorbed in any circumstances into the old ones.

5.37 p.m.

Major Lloyd George

I have sat here since the beginning of the discussion, and what has struck me most is that I cannot help comparing the interest taken in the Bill to-day with what happened on a Friday a few weeks ago, when the House was discussing the Exportation of Horses Bill. We had a full House the whole day then, and there was intense interest taken in the subject. I cannot help feeling that the atmosphere to-day is more suited to a discussion on one of the numerous Gas Orders which we find on the Paper, than to a problem which affects vitally the lives of hundreds of thousands of our fellow human beings. The Minister, when he was moving the Second Reading of the Bill, said that he took it that the criticisms that would come from the Opposition would be not so much concerned with what was in the Bill, but with what was left out of the Bill. He will remember that that was the criticism aimed at the original Bill. Those of us who felt that it did not really deal adequately with the problem based our criticism on its inadequacy, and we stated that its very inadequacy showed that the Government had really not appreciated the gravity of the problem with which they had to deal.

I only say what everybody knows, when I state that the main cause of the depression in certain districts in the country is the loss of export trade upon which they largely depend. No remedy for that situation can really be effective without a searching examination of the change in the economic life of this country which has taken place since the War. The Commissioners, when they produced their First Report, rendered one service at any rate. They pointed out what was obvious to many people, that that was the cause of the depression in these districts, and they went on further to say, that, in their opinion, it was not likely that those districts would be able in the future, at any rate by export trade, to provide employ- ment for the large proportion of those who had been thrown out of employment. They said that if we went back to the prosperity of 1929, in Durham and South Wales alone, there would be 120,000 men surplus to the labour population. That was in 1929. Their predictions have been fulfilled because at the present time, in those two areas alone, the unemployment is at a figure of 250,000. As that is due to exports, it is not surprising to find that the export of coal in this country is considerably down on the figure of 1929; I think it is about 43 per cent. of that figure.

The Commissioner who investigated the Durham district, the right hon. and gallant Gentleman the Secretary to the Overseas Trade Department, stated, in a very remarkable report, that a study of the conditions in Durham drove one to the conclusion that the future of a large part of the county would have to be agricultural rather than industrial. Let us look at the White Paper and see to what extent the Government have implemented that recommendation. I see that 2,000 families and 2,500 individuals are to be settled on the land, and I understand that to-day that figure has gone up to 3,000. That is the total extent to which the Government have tried to carry out the recommendation of the Commissioner in Durham, as far as the Special Areas is concerned, at a time when, leaving out the question of economic instability, 5 per cent. of the people are on the land and 95 per cent. in the towns. We are spending millions of money on Defence to-day. The weakest link in our Defence in the last War was the food supply of the country, and yet, despite all that knowledge, that the productivity of our soil is less than it was in 1914, that there are scores of thousands fewer people working on the soil, and that thousands of millions of acres have gone out of cultivation—despite all that, all that we get are 2,000 families, and 2,500 individuals. As far as forestry is concerned, I think that I am right in saying that the actual losses which we incurred in cutting down timber have not yet been made up. That is the position looking at it from no other point of view, if the Government wish, than that of the Defence of this country.

The Minister suggested to-day, and the Minister of Labour who introduced the original Bill suggested, that when we criticised this Bill for its inadequacy we were criticising it for not doing something it was never intended to do. The right hon. Gentleman the President of the Board of Education who introduced the Bill on the first occasion said that it was idle to look upon the appointment of these Commissioners as any contribution to the problem of unemployment in the Special Areas. He went on to say that it was advisedly experimental. We have had three years of experiment, and, surely, we are entitled to expect something a little more than the extension of the period of the experiment, with one or two slight improvements. The Under-Secretary of State for Scotland when moving the Second Reading of the Bill this afternoon did not put it any higher than this, that the things done were not inconsiderable, which is more than I can say.

I do not think that Ministers, judging from their speeches, really think that anything can be done for these areas. The Chancellor of the Exchequer and many other Ministers have said frequently that the only salvation for these areas is in the general improvement of trade throughout the country. There has been some improvement. How does that affect the Special Areas? In the White Paper they take the dates of 26th November, 1934; 28th January, 1935; and January, 1937. Whatever improvement there may have been in the trade of the country during that period, it was not reflected in the Special Areas, because in November, 1934, 441,000 were registered as unemployed in the Special Areas, whereas in January, 1935, the figure was 455,000. Therefore, there was an actual increase in the number registered as unemployed. If we look at the next column we see that in January, 1937, the figure was down to 335,000 and there has been another 10,000 reduction this month. I suggest that that improvement is almost entirely if not wholly due to the rearmament programme.

I was surprised to hear the hon. Gentleman to-day speak of the unwisdom of having large aggregations of population in one industry. Where could we get a worse example than is put forward by the armaments programme? That is the worst type of specialisation that I can imagine. There can be no doubt that 'the improvement in the Special Areas between 1935 and 1937 is almost entirely due to the rearmament programme. The right hon. Gentleman practically said so to-day, and the White Paper says so. The only thing that the Government put down in the White Paper as a serious contribution towards a relief of the unemployment problem is the rearmament programme. The figures produced by the Government in the White Paper prove conclusively that a vast proportion of the improvement is entirely due to that programme which started, as they say in the White Paper, in 1935.

They go on to say that preferential treatment is to be given for areas with heavy unemployment. If preferential treatment is to be given where heavy unemployment exists and which has been in existence for a long time, I might quote the experience of a Special Area in my own constituency. Again, taking the dates which are given in the White Paper, I find that in November, 1934, the percentage of unemployment in that district was 51, and in January, 1937, after all these measures, it was 53. There we have an actual increase, although these measures and these rearmament proposals are designed to assist areas where there has been prolonged and heavy unemployment. No one can blame any man or woman who has been living in a depressed area for years if they are satisfied to get employment, whatever the cause of the employment may be. We cannot, however, excuse the Government. It is surely the duty of the Government to look to the future, and if they do look to the future they must know that the main cause of improvement in the Special Areas is the rearmament programme, which must in the end make the situation in those areas worse than before that programme started.

Loss of exports, as we know, is the primary cause of the increased unemployment in those areas. Recovery in our export trade is very slow. Indeed, the increase in our imports is beyond the proportion of the increase in our exports. The forecast which the right hon. Gentleman gave to-day did not go far enough, if I may say so with respect. He should have gone a little further. He should have asked himself this question: "As it is the loss of exports that is responsible for the depressed areas, will the rearmament programme, now in full swing, assist us to restore the black spots?" I suggest that it will do exactly the contrary. The position was very well put in an article a few days ago in the "Times" newspaper. That article pointed out the dangers to the legitimate industry of this country of the expansion owing to rearmament. Attention was called to the War period, when the wealth and power of this country was dissipated at an alarming rate. The same thing on a much smaller scale must obviously be happening to-day, when we are rearming at a rate unprecedented in peace time.

There is evidence even at this moment that legitimate industry in this country is suffering because of the rearmament programme. There are cases where prices have gone up and where the time for delivery has been extended beyond anything expected. If that is happening, as it is happening, in this country, is not also the same thing happening in our overseas market—the same delays and the same increase in prices? The "Times" article went on to say that markets must be increased, otherwise the burden of this rearmaments programme will become too much for the industry of this country. After all, it is the industry and trade of the country that has to foot the bill for whatever programme the Government undertake. The article also went on to say that National Defence is at this moment in competition with national industry. There is no doubt that that is becoming increasingly so as the programme develops. It is a serious thing for the market at home and it may well be disastrous for our markets oversea. I need only remind the House of one instance in regard to the last War. Everybody knows that the one country that has knocked a bigger hole in our textile trade than any other country is Japan. That was due to the fact that she was able to devote her attention to her textile export trade at a time when our people at home were so, otherwise engaged that they were not able to look after our Eastern markets as they, ought to have done.

Prices at this moment are going up. We cannot blame the manufacturers at home. On the whole, they prefer to cater for a market on their very doorstep rather than fight for it in competition. Sooner or later when the rearmament programme comes to an end—the Government do- not intend that, the country should go on at this rate spending money—what are the manufacturers going to do? Prices will have gone up, competition will be just as keen as ever, and they will be handicapped in competition by the fact that they have to pay higher prices for raw materials and the finished article. There is a lot of leeway to be made up even now in our export trade, without reckoning on what will be the case in the future. Anyone who thinks that this rearmament programme is going to do anything to solve the question of depression in the Special Areas cannot have thought out the matter.

Even when the Government do get an opportunity to do something they do not take it, or if they do take action it is generally the wrong one. Let me give two examples which have taken place in the last few weeks in this House. The first was the Caledonian Power Bill. That was a scheme to produce calcium carbide in the Highlands of Scotland. Hon. Members made statements for ancLagainst and there was a free vote, but there was nobody on the Government bench to tell us which was the right course to take. The Government left to a free vote of the House a really vital matter. If that Bill had been carried I assume that in due course a factory would have been erected in the Highlands of Scotland. I am not complaining about that, but I complain of the attitude of the Government. A predecessor of my right hon. Friend said, in a humorous vein, that we are all planners now. What kind of planning was there in that case? Nobody on the Government bench gave any guidance as to whether the figures given were correct or not. All we knew was that in a rural district, with no housing, no labour, a new industry was to be started, with raw materials for the industry coming from a depressed area with which we are now dealing, in which area there is housing and, Heaven only knows, far too much unemployed labour. Yet we were left to decide that question without any information from the Government as to what was the right course to adopt.

The other case was the proposed aircraft factory at Maidenhead. It was announced from the Treasury Box that that factory was to be erected, and there were' protests. What was the answer? That careful examination having been made and consideration given to all the relevant facts, this was the only place in England where the factory should go. Protests continued, coming mostly from the hon. Member who represented the district, and within four days the Prime Minister said that the Government were going to take the factory somewhere else. If it was so vital that Maidenhead was the place where the factory should be erected, why did they take it away? The fact of the matter was that there had been no consultation, obviously, between the Air Ministry and the right hon. Gentleman. There should be very close co-operation in such a matter, because here again we were going to put down an industrial district in an entirely rural part of England, regardless of the housing and other municipal expenditure which had been incurred in other areas. We should have been creating a potential distressed area in that part of the country for a future Government to deal with.

I cannot help contrasting the attitude of the Government in their handling of the Defence programme with their handling of the problem of the Special Areas. I am not going to make any comparison in regard to the cost, but having decided that the making up of the deficiencies in our defences was a matter of urgency the Government, for the first time, act with great energy and on a gigantic scale. I suggest to the right hon. Gentleman that the problem of the depressed areas is just as urgent for this country as the problem of Defence, and should be tackled on the same scale. The Government may, as the result of their expenditure on rearmament, and probably will, have the most efficient armaments in the world, but they will be of little use to this country unless we have the men to man them at the proper time. At this very moment there are tens and scores of thousands of our fellow beings who have been virtually abandoned to their fate by this and the preceding Government. Many thousands of those people fought for this country in the hour of its greatest trial. Yet as far as they are concerned they are just left to their fate.

The Secretary of State for War tells us how he is going to make the Service more attractive in order to get the men required for the Defence of the country. I wish the Government would spend as much energy on making their native land a little more attractive to thousands of people who have been left alone so long in these depressed districts. The best Defence of this or any other country is a population that is contented and happy. If the Government tackle this Special Areas problem in the same large way and with the same energy that they have shown in tackling the problem of Defence, I believe that the problem can be solved, but so long as they are content with Bills such as the one before us to-day those areas will remain not the source of wealth to this country that they used to be but a monument to the failure of our statesmanship.

5.59 p.m.

Sir Robert Horne

The speeches to which we have listened exhibit a measure of the anxiety which the House feels in regard to the very difficult problem with which we are dealing. We have discussed this matter so often that I find it difficult to say anything that is fresh. Even in regard to this Bill, the subject with which it deals was discussed so much on the Financial Resolution that there is nothing new to say about it. We can, however, reiterate in a new form some of the arguments which have already been used. I am not going to deal in detail with the speech of the hon. and gallant Member for Pembroke (Major Lloyd George). He indicated a filial loyalty in his reference to the agricultural problem and the failure of the Government to deal with it. My recollection is that that proposition was dealt with by the Chancellor of the Exchequer in the recent Debate, and from my own point of view it requires no further elaboration. For the rest, the hon. and gallant Member dealt with some matters which are domestic to the Government and which will be replied to by the Minister; otherwise his speech was a disquisition on the interruption which the armament programme has made in the civil business of the country. Everyone will agree that that is a problem which will have to be faced, and that we shall have to consider plans by which the civil business which can be postponed shall be taken up at some more appropriate moment than the present when the shops and factories are full of armament work.

Most of us accept the absolute necessity 'for the rearmament programme. It is not enough to bewail the fact when we have done it for our own defence and it is entirely irrelevant to this Debate to discuss what we should be doing in order to take precautions to deal with its effects in the future. The hon. Member for Chester-le-Street (Mr. Lawson) who moved the Amendment spoke, as he always does, with impressive knowledge and sincerity on this topic. Like the two hon. Members opposite I have been a critic of the Government in connection with the Special Areas, and I shall continue to be a critic as long as there are 300,000 people unemployed in these areas. I shall continue to be a critic as long as there is such a vast disproportion between the unemployed in these areas and the unemployed in the rest of the country. The hon. Member did not exaggerate the tragedy of the Special Areas so far as employment is concerned and, indeed, it is not sufficiently exhibited by just reciting the figure of 300,000 as unemployed in these areas. The fact is that in some of the villages of these areas the tragedy is vastly greater than it is in any other part of the country, and it is no good taking averages when dealing with this matter.

But having said that, I confess that I feel more comforted at the present time than I have been throughout all these Debates. There has been a distinct move made during the last few months. The hon. Member indicated that while there was a small decrease in the unemployment in these districts, it was, nevertheless, lamentably small. I think he exaggerated his pessimism in that respect. I have been in close touch with two Special Areas, the area for a constituency in which I sit in this House and the area of South Wales. I think South Wales is the most depressed area in the country. The figure of unemployment has decreased by 33 per cent. in the other Special Areas, but in South Wales by only 20 per cent. At the same time we must take notice of things which are happening before our eyes. The hon. Member said that there was no opening up of pits in any of the Special Areas. The fact is that in the South Wales area three pits are being re-opened, under a decision which was taken a few weeks ago, and there are other indications —does the hon. Member deny it?

Mr. Lawson

I do not deny it, and it is very good to hear. But it is extremely rare.

Sir R. Horne

I am not asking the House to view the position with any complacency. On the contrary, I am in complete agreement with those who seek by every method to get matters moving more rapidly. All I say is that there are undoubtedly indications of improvement. Take another instance. In certain districts in South Wales, within my own knowledge, it has been impossible to get an adequate supply of miners for the work that has to be done. I do not say that this amounts to very much but, at any rate, it is something and encourages us to look forward with more hope. The Government have certainly done some of the things most immediate to their hands; they do not require any credit for that because they were obvious. Having to spend a large amount of money on rearmament it was clear that Government contracts should go to the Special Areas in preference to other areas.

Mr. James Griffiths

The right hon. Member has spoken of the scarcity of miners. Is it not a fact that there are thousands of miners over 40 years of age whom the coalowners will not have?

Sir R. Horne

Of course, there are districts which are better off than others, but the instances I am giving are of cases where there has been a recrudescence of work, and I have not the slightest doubt that the difficulty of getting an adequate supply of miners in these particular places may be due to the fact that many of the miners who still remain in the district are older and are not in a position to work in the pit, while others, by reason of the long depression, are not in a condition to do the kind of work which it is necessary should be done.

Mr. George Hall

I happen to come from the district to which, I think, the right hon. Gentleman is referring, and, strange as it may appear, while there is a suggestion that there is a shortage of miners in that particular area, there are no fewer than 5,000 miners unemployed in that area. The difficulty is that the coalowners expect to get a perfect man ready to resume his work after he has been unemployed for two or four and five years. The work of a miner demands an almost perfect physical condition, and unless they have an opportunity of obtaining something like their normal physical condition in older to do heavy manual work, they will not be able to do the work which is expected of them, that is, a full day's work after being idle for so long.

Sir R. Horne

That is what I have said. The hon. Member has put it more clearly than I did. I hope the House will not think that I regard these conditions as ideal. I regard them as conditions which need a vast deal of improvement, and I hope that means will be found whereby the physical vigour of miners who have been out of work will be stimulated and developed. That is absolutely essential for any betterment in these districts. All I have said is that there are signs of betterment and that it is a mistake to be too pessimistic about what is happening. The Government certainly did the obvious thing in putting their contracts into the districts which were most distressed, and it is something that £57,000,000 worth of orders have been put in the depressed areas and £35,000,000 in areas particularly known as the Special Areas. That is a reason why there are signs of betterment in some of these districts. There is no reason why we should ignore that fact.

Then the Government have instituted munition factories in the Special Areas. I look upon that as more hopeful. It is true that as the rearmament programme slackens there will be less orders and less contracts available in these areas but, on the other hand, there is a certain amount of permanency in the munition works which are to be established in South Wales, and which are about to be established in the West of Scotland. They will never be shifted from these areas. Any Government will always require some munitions, unless we are going to reach the millenium very rapidly, which I do not anticipate; and it is quite certain that these will be the safest places in the country where munitions can be made. I regard these as more or less permanent institutions which will help these areas.

But there are also indications of industries depending entirely on private enterprise being established in some of the places which are hardest hit. I know of my own knowledge that three new factories are to be started in Merthyr Tydfil which will employ a considerable number of men. There are others which were mentioned by the Parliamentary Secretary at the end of his speech in the last Debate which will undoubtedly help employment in South Wales. I have also knowledge of some fruitful inquiries which have been made in the west of Scotland, and I am sure that there is a movement in the public mind which is encouraging business men to get over a certain amount of prejudice they have previously had against these highly rated areas.

In regard to high rates I wish to congratulate the Government on what they have done in adjusting local rates, under the system of block grants in order to help the Special Areas to the greatest possible extent. This is a matter that I have raised from time to time, especially in connection with Glasgow which, being in the distressed condition it was, it seemed to me was harshly treated as compared with many other cities of the Kingdom. Liverpool was equally unfortunate. That, situation is now very largely redressed, and I think the Government's action in that regard is highly creditable.

Another very practical scheme is contained in the Bill. It is that the Commissioner shall have power to provide funds for meeting rents, rates and taxes in order to induce private industries to start in the Special Areas. I believe that is an inducement which will very greatly encourage businesses to go to the Special Areas. The hon. Member for Chester-le-Street dealt with the question of the location of industries. That is a very difficult question and one that involves a great many more considerations than appear on the surface. I entirely agree with the hon. Member that the question of costs has to be adequately looked into in many cases where businesses are seeking to find a location in which to establish themselves. Very often people do not recognise how much benefit businesses derive from an established community in the shape of roads, drains and all the amenities of civilisation. Very often that is left out of account.

This is a matter which has to be investigated very closely. We cannot go on in an absolutely haphazard fashion as in the past; but what precise devices shall be adopted is an entirely different matter. Has the House ever considered, for instance, that if you compel a man to put his business in one particular part of the country, you rather become responsible for his success or for his failure? That has to be taken into consideration. No doubt under a Socialist Government, with everything planned, and everybody a servant of the State, and with the State's capital being used, it would be possible to institute a system of that kind, but at the present time there are a great many considerations that have to be taken into account before it can be said straight away that the State and Parliament shall control, under our present system, where a business is to be placed. It would be open to the capitalist who had to provide the means and to take all the risks either to say that he refused to do it and would not carry on business in that particular place for the reason that he thought it would be an entire failure, or to say that he would go there if the Government guaranteed 5 per cent. on his capital. I think that at the present time the Government have taken much the easier road towards an immediate—

Miss Wilkinson

Would the right hon. Gentleman regard the arguments which he has made with regard to English firms as being equally strong in the case of foreign firms coming into this country which have to operate under favour of a licence from the Ministry of Labour?

Sir R. Horne

The hon. Lady has raised a case which undoubtedly gives the Government more control even under present conditions. It is, of course, always open to the foreign firm to say that if it can obtain a licence only for that particular place, it does not want it, and will not start business here. At any rate, the consideration to which I have referred has to be taken into account. I believe the Government have taken the more practical way, at least for the present time. Instead of saying that they will compel a business to establish itself in a particular place, they say that they will induce it to go to the area where they wish it to be established. The inducements that are given are eminently practical. There is an adjustment of rates so as to give an advantage to businesses placed in the Special Areas, and assistance afforded in the matter of rents, rates and taxes. I am not disposed to quarrel with the Government on this head. I believe that the methods they are adopting are wise, and that they are methods which will come into operation much more quickly than would any attempt at legislation.

Another matter to which reference has been made is transference. I have always been rather prejudiced against transference from these areas. What it tends to do—and what undoubtedly it has done—is to take away the young people and to leave the areas inhabited solely by people many of whom are perhaps past their best and may not be capable of sustaining the full burdens of their community in the future. I have been rather distressed to know how many young people have gone from these areas, and I hope that when things get better in these areas—for they must get better, as I am sure that with the assistance of the Government they will—many of these young people will come back to carry on the new businesses which have been developed there. I hope that in that way they will be repatriated and that there will be inducements for them to stay there, having the inspiration of retrieving the districts in which they were born.

As has already been said, one might make more complaint as to what is left out of this Bill than of what is in it. There are two things in that connection to which I would like to direct attention. My hon. and gallant Friend the Member for Pembroke truly said that the decay of these districts is principally due to the decay of the export trade in coal. In these distressed areas, nothing else really matters in comparison with the coal industry; it is the same in the West of Scotland as in South Wales, although in the West of Scotland the burden is not as great or the distress as acute, since South Wales has been more dependent on the export trade in coal than any other district. It is tragic to look at the figures of diminution in that export trade. Last year alone the diminution amounted to between 2,000,000 and 3,000,000 tons as compared with the previous year, and since 1929 the reduction has been approximately 10,000,000 tons. It is there that the problem lies. The situation may be made easier by bringing in many other industries. People may be induced to go to these areas, and the burden may be eased by developing this or that trade, but the problem will never be solved until we deal with the export trade in coal.

How are we to do that? There is only one way in which we could make an immediate advance and one which I believe would be permanent. We are being defeated in many of the markets of the world at the present time by reason of the fact that we are faced with subsidised competition. Taking South Wales as an example, South Wales produces a class of coal which in most of the markets of the world will always command a higher price, but it cannot command a higher price to the extent of a subsidy which runs to 6s. a ton. That is the sort of subsidy with which South Wales is faced in competition with Germany.

Many of the trade agreements which have been made by the President of the Board of Trade and which have benefited the coal trade of the country generally, have had the effect of diminishing the export coal trade of South Wales because, by driving Polish and German coal out of the Scandinavian markets, they have driven those countries to compete with South Wales coal in the Mediterranean. We cannot solve this matter by drifting on. Action must be taken by the Government at some time or other. I think that possibly some arrangement might be made with some of these foreign exporters in the way of a cartel which would define markets on some reasonable plan. But this will never be done as long as the Government do not stand behind our producers. If the British Government would say to foreign countries, "Unless you take off your subsidies or come to some arrangement, we are determined to support our own people by putting on a subsidy shilling by shilling as necessary," I believe those countries could be brought to some reasonable arrangement. Until something of that sort is done, I do not think there will be a solution of the problem of South Wales; the position there may be improved in many ways, but it will not be finally put right.

There is a second matter which I would like to mention. I think the Government have done a good service by inducing a great enterprise, in the shape of the low temperature carbonisation of coal, to go to South Wales. That is an industry which I hope will be encouraged. I have been interested—not in any material way—in the development of this system for many years. It seems to me to have very many merits. One of them is that, while the treatment of coal by a process of low temperature carbonisation gives petrol and other by-products, it also yields coke of a kind which burns excellently in grates, and therefore satisfies the desire of the great bulk of the people of this country to have a fire burning on their hearth. That residual fuel is smokeless. I look forward to the day when these enterprises are sufficiently developed in this country for there to be regulations passed by the City of London, for example, that nobody shall burn any coal which is not smokeless. That would be a great advantage to the health of the community, and would at the same time save vast sums of money in lighting. That is one thing which I am glad to know the Government have done. I hope to see that venture prove a great success.

There is another process of dealing with coal which is—and I say this in no critical sense—of far more importance in our present circumstances than low temperature carbonisation. It is a process in which all the coal is reduced, by certain devices, to condition in which it produces oil of various characters. In present circumstances, a process of that kind is of greater advantage to the coal mining community because it does not give any residual fuel which will be in competition with coal in its present form. It is also of greater advantage from the point of view of defence in that it provides far more oil. If we have regard to the circumstances in which to-day we are importing something like 3,000,000,000 gallons of oil from oversea, and if we consider what our weakness would be in that respect in the event of war, we must realise the importance of providing as much as we can out of our own indigenous assets in our own country. From the point of view of defence and I think also from the economic point of view, it is most important to encourage the production of oil by some such process as that which I have mentioned.

There is a hydrogenation plant which produces this result in existence at Billingham and the people of South Wales have long reckoned upon the fact that at some early date the Government would encourage the establishment of a similar process in South Wales. There is another process which is, in some senses, similar to the Billingham device, but which differs from it in many important characteristics. Many people think that that process would be better for the South Wales coal. I am not saying that it would be better for all kinds of coal but the indication is that it would be better for South Wales coal. This process is being rapidly developed in Germany. There are some large plants already in existence there and the process is being extended. France has bought a licence to use this device. Licences have also been purchased by South Africa and Japan and to me it seems tragic that in this country, which depends much more upon its coal than any other country in the world, we should be lagging behind in the adventurous enterprises which would develop these processes. Even though we might spend some money foolishly, it would be worth while to make the experiment and in this case we would be making what is regarded as a justifiable experiment and one which the Germans certainly are developing.

I repeat what I have said frequently in this House on previous occasions. Coal is our one indigenous asset, and if by the action of some malevolent spirit all the coal of this country were suddenly washed away, we would in a short time become bankrupt. That is the situation in which we are and therefore it is incumbent upon us to develop any promising process by which our coal asset can be made as important as it ought to be and by which we would be enabled to defend ourselves more efficiently, if trouble ever came, than we can do if we remain dependent on foreign supplies of oil. I do not wish to elaborate the matter further, because the Government have the question under consideration and are looking into the merits of the process I have mentioned. I would urge the Minister of Labour to give very full consideration to that design. I know that a public company engaged in the coal industry is prepared to spend f £1,000,000 of its own money upon this project. When my right hon. Friend is investigating the possibilities of various schemes, he ought to take into account the fact that technical people are so convinced of the value of this experiment that they are willing to spend £1,000,000 of their own money upon it.

For the rest I am prepared to support the Government's Bill without any qualifications. I regard the devices which they are adopting as promising and encouraging, but I would enjoin upon them that there are critics upon both sides of the House. There are quite as many critics upon the Government benches as upon the benches opposite. The conscience of the nation has been stirred by this problem and we look to the Government for the appropriate solution.

6.35 p.m.

Mr. Ridley

Although the views of the right hon. Gentleman the Member for Hillhead (Sir R. Home) upon this question do not usually accord with those of my hon. Friends who sit on this side of the House, he, at least, betrays an interest and concern which will be welcomed by hon. Members in every part of the House in this grave problem. Some hon. Members are aware that the right hon. Gentleman himself has taken somewhat unorthodox steps in another capacity in attempting to deal with this problem. But I would suggest to him that he is operating within a worn-out economy in which no real solution of the problem can be found. I would, however, beg the aid of the right hon. Gentleman in carrying out one suggestion which he himself made in the course of his very interesting speech. He spoke with some warmth and earnestness of his desire to find a way in which the physical vigour and vitality of our mining population could be maintained in the distressful period through which they are passing. May I suggest in all sincerity to the right hon. Gentleman that he should discuss that problem with the Minister of Labour and seek to persuade the Minister to abandon an instrument which is being deliberately used and is sapping the vitality of the population in the mining areas as well as other large areas of the country? I refer to the means test.

During the Debates on the Money Resolution the Minister of Labour scored what he himself described as a useful debating point, but which I thought was a little less worthy than a debating point. He said that while the Government were told that what they had done had achieved nothing for the areas affected, they were being asked to extend the advantages of a Measure which was supposed to have brought no benefit to those areas. I suggest to the right hon. Gentleman that, in saying that, he was really mocking at the poverty of the very distressed areas. He must know that what would be, in normal circumstances, an insufficient meal for him or for me would be regarded as, at any rate, a temporary meal by a starving man. A starving man would snatch at a bone or a crumb, even such as may be found within this legislation. I ask the right hon. Gentleman to address himself, when he replies, to a simple arithmetical calculation. The Parliamentary Secretary said there were now 324,000 unemployed within the Special Areas. I take that to be the number on the live register, which means that in the Special Areas there are at least 1,000,000 people affected by unemployment, including the dependants of those who are registered. I do not know what the right hon. Gentleman's estimate may be of the number who would be taken off the live register through this Bill and other allied Measures which the Government are supposed to be considering. If I put that figure at about 25,000 I think I shall be erring on the side of generosity. That would leave the live register figure in the Special Areas at 300,000. That is to say, more than 750,000 people in the Special Areas will be untouched by this and similar legislation.

This Bill ought to be a preface to the legislation which the House is to discuss to-morrow. It ought to aim at bringing the population of these areas into a state in which they will be fit subjects for physical training and natural recreation. It ought to aim at placing them in decent dwellings and providing them with decent clothing. I have just returned from spending the Easter vacation in my constituency. It is not scheduled as a Special Area, but like many other constituencies it has its own areas of acute distress. Many of my constituents are housed in dwellings which are a disgrace to civilisation. Indeed, some of them have to live in dwellings which are reported to have been erected originally as temporary structures for George Stephenson's labourers 100 years ago. Those houses probably paid for themselves in the first 10 years of their existence and they have yielded a very substantial and probably improper profit to those who have owned them since. Those people are not clothed and are not housed in a way which enables them to withstand the effects of the wind and the rain. They are people who will be untouched by the present proposals of the Government. They are descending deeper and deeper into the coma of unhappiness.

What future lies before the unemployed populations in the Special Areas who will not be touched by this legislation? Is it fated that their journey through life is to be marked, first by the fact that they are on the live register, then by the fact that they are in receipt of unemployment assistance, and finally by their descent to what is akin to parish relief? Are they to be accompanied all through their lives by the operation of the means test, on which the right hon. Gentleman continues to insist? I sometimes wonder whether the Government really desire to help in connection with this matter. In the weekend newspapers I read an article contributed by an hon. Member of this House called "If Christ came to Europe," which was commended in a special letter by the right hon. Gentleman. I would like to see another article called "If Christ came to the Special Areas—and stopped on the way at the Ministry of Labour." In my constituency this week I was called out of a meeting to see a man whose appearance suggested that he was 65, though he was much younger. He had been prematurely aged by the occupation which he followed. That man had seven children, two of whom were employed and five of whom were dependants, and he had been "means-tested" down to 15s. a week. I do not think that even the right hon. Gentleman can find a Biblical precept to justify torture of that kind.

Either the Government cannot understand the permanent character of this problem within the present economic system or they have no desire to understand the problem. What is the good of establishing new industries in the Special Areas unless new purchasing capacity is established at the same time? The disequilibrium in modern economics is represented by the fact that productive capacity outstrips consumption capacity. What the world wants to-day is not new instruments of production, but a new expansion of consumption capacity in order that existing productive instruments may be adequately employed. But what happens to-day? The means test is there, and although I do not wish to run any risk in referring to it this evening, I appeal to the House to see that, apart from its social consequences and implications, there is an opportunity for an immediate contribution to the creation of extended purchasing capacity and the economic reclamation of the Special Areas by doing away with that cruel instrument of social and economic injustice. It was said many years ago in a great poem called, "Man with a Hoe": Bowed by the weight of centuries He leans upon his hoe and gazes on the ground, The agony of ages in his face And on his back the burden of the years; A thing that grieves not and that never hopes There was some occasion for that poverty in a poverty world, in a world 100 years ago which was unable to satisfy the material needs of its people. That is not the lion in our path to-day, and we only add to existing poverty by the extension of productive capacity when we do not at the same time add to the consumptive capacity of the people. The only poverty—and I say this in no personal sense of the right hon. Gentleman—is the intelluctual poverty of the Government which cannot look beyond a worn-out economic system. In order to find a permanent solution of this grave problem we must find a new economic policy. Indeed, the right hon. Gentleman the Member for Hillhead implied, although he did not say it in so many words, that capitalism cannot keep pace with modern development. That is true of the mining industry—

Sir R. Horne

My hon. Friend cannot point to anything I said which was in the least like that.

Mr. Ridley

I will use it as my own argument, but I think that the right hon. Gentleman unconsciously meant the same thing. Capitalism, particularly in the mining industry, cannot keep pace with scientific development and inventive genius, and any attempt which the Government make to patch up the existing situation lags behind the constant changes in the very problem with which they are trying to keep pace. In the mining industry, for instance, the constantly increasing economy in the use of coal and in the extraction from coal of gas and electricity, the constant economy in the consumption of coal as the main source of the world's motive power, are causing a problem with which the Government appear to be incapable of adequately and satisfactorily grappling. Their policy in relation to the Special Areas, and to the areas which are not scheduled as Special, but which are hardly less distressed than the Special Areas, lags behind the very process for which they seek to find a cure. It is not worthy of this State and of our social conscience that we should be willing to spend an enormous amount of armaments and be niggardly, parsimonious and mean in this unworthy fashion in attempting to deal, unsatisfactorily and inadequately, with the grave problem of the Special Areas.

6.51 p.m.

Miss Cazalet

I hope that the Government will face the whole problem of the older people in the Special Areas and make a real decision as to what should be done. Even if new industries go to the Special Areas under this Bill—and I believe that they will with the help they are to be given—they cannot, I think, really assist to any great extent the older population. Many hon. Members have spoken about the tragedy of the older people who have been out of work for more than 12 months. There are in the Special Areas alone more than 100,000 people over 35 years of age who have been without employment for more than a year. This problem was forcibly brought home to me a short time ago when I was visiting a small school in a village far up in the Rhondda Valley. I went into the top classroom of the boy's department and talked to them about what they hoped to do. As I was leaving, I happened to say, "All those whose parents are out of work, put up their hands." Every hand went up.

I should like to ask the Minister whether, as a first step, it would not be possible for him to have a very detailed analysis made of every individual person who has been out of work for more than 12 months and who is over 35 or even 40 years of age. I would suggest taking case by case and finding out the exact reason why they are unemployed, whether it is because of some scientific invention which has done away with much human labour, whether it is because of some international agreement over which the employés and employers had no control, or whether it is, perhaps, because the individual wished to change his employment. Whatever be the cause, I would have it thoroughly examined. On the other side, I would include a definite statement from each unemployed person giving a list in order of preference of the work he would prefer to do and what he feels capable of performing, whether he would be prepared to transfer or to migrate to the Dominions, should opportunity occur, and whether he would like to go on the land, or have a small allotment or join a group holding, and whether he would be prepared to take the necessary training for this work.

After the Minister had all this relevant information and all the cases had been sifted and gone into carefully, he would be in a much better position to view the problem as a whole and to give advice and to make definite suggestions to each applicant, telling each one the truth, even if it were in some cases unpleasant. As long as many of the older people remain on the register they are bound to be buoyed up by hopes of getting certain types of employment in certain districts—hopes which, I fear, must to a large extent be false. Sir Malcolm Stewart himself drew special attention to this problem in his last report. I believe that if this procedure could be adopted as a start, and if a thorough analysis could be made, this side of the unemployment problem would be found to be not so overwhelming as it sometimes appears. Although, of course, further new and fresh measures would have to be adopted, it would do a great deal to make the individual feel that he still counted in the life of his country, even if he is over 40 years of age. All these older people who have been out of work for more than 12 months, through no fault of their own, and through circumstances over which they have no control, should be given a fair chance in some way to fit into the general economic structure of the country. We should greatly strengthen our democratic institutions by tackling this side of the problem as soon as possible, and I hope that the Minister may find time in his reply to say something about this question.

6.55 p.m.

Mr. Harold Macmillan

I had the misfortune to be out of England during the Debates before Easter on the Financial Resolution which preceded this Bill, but I took the precaution to read through the Debates in the OFFICIAL REPORT. I am bound to say that I expected that this occasion of the Second Reading would be one of considerable excitement, perhaps even of heat. My hon. Friend below me has already pointed out the atmosphere of calm and even of boredom which has surrounded part of the Debate to-day. The Minister in introducing this Bill gave us the explanation. He told us, and I think truly, that most people are more interested in what is not in the Bill than in what is in it. I do not say that as a criticism, but I think that the Minister must admit that it is perhaps a legitimate objection. For instance, if you were expecting a five-course dinner and the waiter gave you a pat of butter and a roll of bread, and nothing happened for several minutes, you would say, "What about the other courses?" If the waiter said, "You should be grateful for what is already in the dinner, not criticise what is not in it," that would not be a very satisfactory answer. The public and the House are more interested in the tremendous problems which are not dealt with in the Bill than the comparatively minor questions which form its contents.

The Chancellor of the Exchequer, in introducing the Financial Resolution, was kind enough to make some reference to something I had said about him I certainly adhere to it and repeat it with emphasis I said that he was a man who could be trusted to do at least as much as, and even more than, he promised. I am prepared to say, after a careful study of the Debates, that the very guarded promises which the Government made in November, January and February have been carried out to the letter. They have carried out more; but they were very guarded. I am prepared to say, if I may use the words of the right hon. Member for Hillhead (Sir R. Home) when speaking of industrial conditions generally, that there has been a movement on the part of the Government—very largely, I think, caused by some of my hon. Friends below the Gangway—but it has not been a very big movement, but still a movement. If one may use the words of Galileo, "E par si muort"—Nevertheless, it has moved. It has moved a little; it has not been shaken: it has oscillated. That oscillation takes legislative form in the Bill which is now before us.

Within the limits of what can be done by treating the Special Area; as a special and limited problem there are, of course, criticisms that have already been referred to and that must be made in relation to this Bill. It does not deal as a whole with the general problem of the location of industry. I hope the House will not accept the account of the right hon. Member for Hillhead of what would be meant by the control of the location of industry. As I understand, it does not mean that somebody will be ordered to go somewhere, but that a licensing system will be set up and that one of many choices will be offered to industry. Nor does the Bill deal in any comprehensive way with many of the recommendations which have been made by the Special Commissioner. It is public knowledge that the Commissioner was permanently hampered by the conditions within which he had to work. He was a man of great industrial knowledge and experience.

Now you have a new Commissioner. I have nothing to say; it would not be right for me to criticise that new Commissioner. A Commissioner has a position in our constitution which is neither fish, fowl nor fresh herring. He is neither a public servant nor is he a member of the Ministry; therefore it is wrong and impossible to criticise him. We have substituted a new Commissioner for the old one, a greatly respected and rather elderly gentleman with not much experience of industry and considerably more experience of banking, who, I have no doubt, will be still tamer in the hands of the Government than the last one was. After all, he was a member of the National Labour party, and they are well known to be the tamest among the tamest of God's creatures.

Nevertheless, we are glad to have this Bill. It is more than we hoped to get in November. It is better than the Expiring Laws Continuance Bill method. We accept gratefully, and I hope graciously, what we are given, for we are not likely to get more at the present time. But there are certain provisions of the Bill which are likely to make fresh anomalies. Clauses 3 and 5 have already been referred to. I would back any camel to get through the eye of any needle rather than some districts to qualify under Clause 5, and certainly the district I represent. But leaving all that apart, surely what the House has to direct its mind to besides this small dish which is given to us, is some consideration of what might have been in the Bill. What problems really face the Government if they are to deal in a comprehensive way with this question?

The Government have through their White Paper put forward that this is only one of the parts of their policy. I recognise that in their remission of rates and alteration of the rating system they have done a great service for these areas, and we are grateful. In their general policy, in the direction of orders, they are using the necessary rearmament policy to do some good, and we are grateful for that. It has been represented that there should be one special Minister, a kind of co-ordinating Minister, who would be responsible for all the activities of the department and the Commissioner. I am not sure that I agree with that. If this question is to be dealt with, it is the Cabinet as a whole which must be responsible, and it can be dealt with only by acting along general lines of public policy as well as the small specific help contained in Bills such as this.

For about 10 or 12 years I have taken part in Debates—perhaps I have bored the House—on the Special Areas. My study of the problem has convinced me that the right treatment of the Special Areas is not by cutting them off as if they were a kind of distant hiatus. Do what you can to alleviate their distress, but if the real causes of their distress are to be dealt with, they must be dealt with by much wider and comprehensive treatment. For some years I have been trying to press forward that view on successive Governments, and I believe it to have a greater degree of acceptance in every part of the House than it did some years ago. I could not help thinking as I travelled a thousand miles in another continent, through several States with vast areas of territory and vast populations, and reading about the Debates in England on the Special Areas, that you can travel right through them in the time it takes to travel from New York to Chicago. What is this nonsense about these areas being treated with a ringed fence round them, and left to quarrel as to whether they or someone else are to get the titbits? Monetary policy, fiscal policy, general planning and location of industry, hours, pensions—we have heard nothing of that. It was all in the report of the gentleman who is now Minister for Overseas Trade. All this seems to have died away.

What is the policy of the Government to take the place of armaments which themselves, perhaps, in our monetary expansion have taken the place of the housing boom of last year? Suppose the worst should happen. Suppose Herr Hitler, Signor Mussolini, my friend the Foreign Secretary and M. Blum make an agreement. Suppose the worst should happen and there is universal disarmament? Suppose this calamity of universal peace should descend upon the world. Germany goes back to 40 per cent. unemployed. Are our areas to go back to 30, 40 and 50 per cent. unemployed? What is the policy of the Government? What is the attitude of mind? How are we going to solve these questions? Interesting observations on these wider questions were made by the hon. Gentleman who last addressed the House. Apart from parties, there is an underlying uncertainty as to whether the working of the present system is adequately making use of the immense advantages which are open to us. For years just as members who represented one side have put forward one universal attitude of mind, private enterprise and Capitalism, as the best system, hon. Members on the Labour benches have had to put forward a universal panacea of Socialism. I am glad to see that they have drawn up an Amendment which drops these terms of expression and merely asks for bold comprehensive measures forming part of a national plan for the reorganisation of industry and the full utilisation of the nation's resources I agree with that. I think that more and more to-day people who are not tied to the party point of view, who are not handicapped by being tied to the extreme views of one side or the other, are beginning to see that what is happening is that the whole capitalist structure of society as it was known 50 years ago is undergoing a radical change. It is not a question of jumping from one system to another, but of adaptation. We have in this picture not all black or all white. We have public ownership and control, municipal enterprise, public utility companies and private enterprise. It is for the Government to assist and develop a society which will fulfil what the people now demand both in the distressed areas and outside and will see that the minimum conditions of life, clothing, food, housing and education, shall be distributed to people by some means or another. If it is necessary for these minimum conditions to be made available to have a socialised or municipalised society for the provision of these services, we will accept a socialist society. On top of that capitalist enterprise may, in technique and wealth production, add its own development. Unless that problem is solved, sooner or later will come the conditions which are the preliminaries to social revolution, and when the main responsibility comes up for the judgment of history, who will be the revolutionaries? For 14 or 15 years this Government or its immediate predecessors have had full power. The Prime Minister and the late Prime Minister singly or jointly have governed Britain for 15 years with great majorities behind them. What have they achieved? Again, we are now asked to choose between extremes of Fascism and Communism. Yet some people have failed to read the obvious lesson of Spain.

It is just because this adjustment of claims between landlord and tenant, priest and layman, master and man, rich and poor, which we in England call reform—it is because these adjustments are not made that a revolutionary situation is brought about. We have seen something of what is happening in America and also here. Sooner or later, unless adjustments. are made in the structure of society that allow these minimum conditions at least of health, food, housing and the like, the same pressures will develop. If we haggle and fight about whether a man should get 17s. or 18s., whether this area or that is to get some minor benefit to keep it quiet—yes, to keep it quiet—if we bargain and chop logic and think in these petty terms of this great problem, then not those who have tried to raise their voice will be the authors of revolution, but those who have shut their ears and have sought with niggling, futile, peddling methods to deal with vast and overwhelming issues.

7.12 p.m.

Mr. Storey

The hon. Member who moved the Amendment described the Bill as the least that the Government could give. I think that both he and the hon. Member for Stockton (Mr. H. Macmillan) who described it as an oscillation, were rather unfair. As the solution of one particular problem the Bill is a direct step forward. The inducements which are offered in it to industry to go to the Special Areas do challenge the consideration of industrialists, and are therefore welcome. I should have preferred to see more co-ordination of control and less diversity in the source of assistance, because I hold that not only must the inducements offered to industry be substantial, but easy of attainment. These inducements will do much to swing the balance in favour of the Special Areas, and therefore as a solution of that one particular problem I welcome the Bill. I regret that these inducements are to be administered by the Commissioner for the Special Areas. As an experiment, the Commissioner for the Special Areas has been well worth while, and the Special Areas must ever be grateful both to the Commissioner and his staff for the work they have done for those areas. For the clearance of derelict sites and the continuance of the social improvement work which the Commissioner has been doing I think we should continue that office, but when it comes to industrial development, not only in the Special Areas but in the whole country, I think we ought to have a Minister who is responsible to Parliament.

Particularly do I think that we should have a Minister under the provisions of this Bill, because, as I understand it, the Special Areas will be entirely dependent upon the initiative of the Commissioner as to the provision of factories and the clearance of sites. There is no provision as regards the Special Areas, as there is for the certified areas, which will enable local initiative in the form of site companies to be supported by the Government. For this reason, if for no other, I think the job is now too big for what is, after all, a part-time volunteer; we need a Minister who should be responsible for administering these inducements and whose duty it would be to study those industrial processes which are not at work in this country and use the inducements offered to encourage them to be set up in the Special Areas. Such a Minister should have the power, also, to discourage—I would not put it higher than discourage, I do not want to see it prohibited—industries from settling in other areas when it is not in the national interest that they should do so. I deplore the decision to set up a Royal Commission, because I feel that is shirking the issue. I think we have come to the position when all of us see that if an industry is going to impose a cost on the community by going to any particular area the country has a right to have some say as to where it goes.

I hope that in administering this Bill the Commissioner will not work through the existing trading estate companies, at any rate on the North-East Coast. The so-called North-East Coast Trading Estate Company not only has Tyneside faces which it cannot help, but it also has Tyneside minds, which it should be able to help. I think I can best explain my point by the experience of the secretary of the Sunderland Industrial Development Board, a board which was refused representation on the board of that trading estate company. He went to the North-East Coast Trading Estate Company's stand at the Birmingham Exhibition and did not disclose his identity. He told them "At the Team Valley Estate you have no sites with water frontages. What would you do?" The reply was "We have plenty of sites with water frontages on the Tyne." If that was not a Tyneside trading estate, but a northeast coast trading estate company the proper answer was "There are plenty of sites with water frontage on the Tyne, the Wear and the Tees." For that reason I hope that the Commissioner for the Special Areas, in administering these, inducements, will work direct through the local authorities and through any bodies in the area which are prepared to develop the area, and not through this North-East Coast Trading Estate Company.

The problem of Wearside is one which calls for prompt action. We have a boom in the tramp shipbuilding industry, and yet we have still 18,000 unemployed. There is no possibility of the shipbuilding industry re-absorbing those men, and it is essential that we should have new industries. The trouble is that when inquiries come for sites we have no suitable buildings to offer them, and therefore the chance of bringing a new industry to the town is very small. That is why I feel that if any industry is coming to the north-east coast and particularly requires a site with water frontage such a district as Wearside should get the preference, and not an area like Tyneside which has benefited enormously from the armament programme of the Government and is already getting the full benefit of the Team Valley Trading Estate.

I hope the assistance which is offered under this Bill will not be frittered away upon areas where no amount of assistance will lead to an industrial revival. We have got to concentrate the inducements offered on those areas where there is some chance of building up a balanced industrial development. I am convinced that the time has come when we must make up our minds as to the areas in which the cure is industrial development and the areas in which the cure is transference, and where the cure is transference I hope we shall concentrate upon that area, and not "milk" those areas in which the cure is industrial development of all initiative and enterprise and of all the best men in them. We should concentrate our transfer work on those districts where there is little chance of building up a balanced industrial development; and where we concentrate on transfer I hope we shall do it thoroughly, disperse the depressed population among more prosperous areas and take drastic steps to liquidate the industrial wreckage. I do not understand why Members opposite are so upset by the appointment of the South-West Durham Board. I do not think there is any proposal to clear away the whole area, but where there is a village that has been entirely dependent upon some colliery which is derelict, surely it is better to clear away the industrial wreckage and disperse that population in more prosperous areas.

Hon. Members

Where?

Mr. Storey

Where the cure is industrial development, is it not possible to start training centres in the area? In my own constituency we have some 8,000 unemployed between the ages of 18 and 35. Of those 8,000, 1,000 have been unemployed for five years or more, another 650 have been unemployed from three to five years and another 1000 from one to two years. The majority of those men are unskilled, many through no fault of their own, because where you have had, as we have had, a depression lasting over a period of more than five years you have lost a whole generation of apprentices. I feel that much could be done when we have a dearth of skilled men, because, after all, where there is unemployment among skilled men it is the older men, who by no fault of their own have lost their skill through long unemployment, who are least likely to secure employment in the future. In those circumstances I ask the Minister whether it is not possible to take the training centres to the men rather than to move the men to the training centres. If we could get more occupational and technical training, if we could get the employers and the trade unions to co-operate, if we could, perhaps, get some subsidy for wages after the training period coupled with some relaxation of trade union rules, we might get a step further in finding employment for many of these men.

The hon. Lady who addressed the House from this side put in a plea for the elder men in industry, and I should like to reinforce that appeal. We know in the Special Areas that as a man grows older his chance of employment grows less and less. In my own constituency there has been a fall of 27 per cent. of unemployment among those under 55, but among those over 55 the fall has only been 19 per cent., and among those over 60 only 16 per cent. We have between 2,000 and 3,000 men over 55 who are unemployed, we have 1,000 over 51 who have been unemployed for five years or more. I do not say that we should try to take all those men off the labour market, but I do say that where you have a man of over 60 who has been unemployed for some five years or more it would be better to provide him with an adequate pension and remove him from the labour market than to leave him in the uncertainty of having to seek for work. The hon. Lady the Member for Anglesey (Miss Lloyd George), speaking on the Financial Resolution, described this Bill as a sop to the rebels on this side of the House. As one of those rebels I accept the Bill not as a sop but as a substantial step forward, but I beg the Government not to rest content with this one step. As we have heard from all sides of the House, there are many problems to be dealt with, and I hope that the Government will energetically tackle those other problems. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) gibed at the Minister as being only a voice. [HON. MEMBERS: "A big voice."] It was her voices which inspired Joan of are to arouse France and lead her countrymen to victory. I hope the voices of His Majesty's Government will inspire them and rouse them to go forward until they have solved the problem of the Special Areas.

7.27 p.m.

Mr. A. Edwards

I am bound to intervene in this Debate because this Bill inflicts a very grave injustice on the constituency which I have the honour to represent. There is an old saying that God helps those who help themselves, and that is all I have to commend to the Minister of Labour to-night. If he will help those industries which have suffered great distress in proportion as they have helped themselves, I shall be satisfied. The Tees Development Board was one of the pioneers among development boards. It has spent many years of hard work and many thousands of pounds on endeavouring to attract industries to the Tees. A year ago this month we waited on the Minister with a strong deputation from Middlesbrough and pointed out to him that under the Orders existing at that time we were deprived of some of the benefits of the Government orders and contracts and that Thornaby, which was about three miles outside Middlesbrough, was importing steel from Glasgow to do Government work. The only reason why Middlesbrough is not in the distressed areas is, according to the first Commissioner, that he was so rushed in his work that though he got as far as West Hartlepool he had not time to cross the Tees and visit Middlesbrough. Had he had time to do so Middlesbrough would have been in the distressed areas from the beginning. The Minister corrected that injustice to us, altering the Order so that we did share in the Government contracts, and there was a considerable amount of business as a result. Now he introduces a Bill which appears to have the deliberate intention of depriving Middlesbrough of some of the advantages which other districts are to have.

There are about three words in this Bill which we ask him to delete, but presumably he is going to take refuge in the iniquitous method which the Government have adopted of so framing the Financial Resolution that even the Minister himself cannot alter those words. I hope that the Minister is sincere, and does not deliberately wish to deprive Middlesbrough of its fair chance of getting new industries, after all its labours and expense. Otherwise, there must be some—I do not know quite what to call it—deliberate attempt to deprive us of our just rights. I understand from private conversation that these few words have been deliberately put into the Bill. I am not sure that the Minister who introduced the Bill did not suggest something of the kind, but I did not quite catch his words, that in order to prevent Middlesbrough from getting the benefit of the attractions embodied in the Bill the words were put into it. I am asking for some explanation.

Middlesbrough had a Tees Development Board before the North-East Coast Development came into being; as a matter of fact it was as a result of the Tees Development Board that the North-East Coast Development Board came into being. I have only one observation to make about what was said by the last speaker. He spoke of the recommendation of new industries to the Tyne, Wear and Tees. I want to reverse the order. At present there is no recommendation that new industries should go to the Tees. Only a month or two ago we had a company looking for a site. That company went to Middlesbrough and decided that it was the place to put a factory which would employ 500 people. In a few days this Bill was published, and the company said: "No, under these conditions we shall go to the Tyne." What is the use of Middlesbrough attempting to attract industries if the Government go out of their way to encourage them to go elsewhere? It is not giving the Tees a fair chance, or fair encouragement to these depressed areas. Unless the Minister gives us some hope to-night, I shall have to go back to Middlesbrough and tell my constituents that the Minister of Labour has deliberately pronounced a death sentence on 8,000 people. "Death sentence" is not too harsh a term. We are dependent entirely upon the manufacture of iron and steel. We could have had some shipbuilding, but the iniquitous Shipbuilding Securities, Limited, organisation will deprive us of the chance of any such work for 40 years.

The alteration of the word "or" into "and" would answer our case, but I understand that the Minister of Labour will refuse to do that. Even that small alteration would give us a chance, but apparently it is purposely intended that we should be deprived of the chance which is given to Sunderland and the Tyne. That is not a justifiable thing to do from any point of view. I do not think there is anything quite so depressing, not even being in a depressed area, as coming into the House to-day, knowing that you have a case, but knowing also that the Minister will hide behind this excuse, this technicality, and will say that he cannot alter it. The Government could find means of altering it if they wished, and I am appealing to them to do so. There are more than 8,000 people still out of work in Middlesbrough, although our industry is working absolutely to capacity, and unless we can get some new industries there is not the slightest hope of one of those 8,000 people getting a job. Everybody who can be employed in Middlesbrough is employed, but until recently 26 per cent. of the population was out of work, and it is something over 20 per cent. to-day. The Government have no right to frame legislation which says to 8,000 people: "For evermore you shall not have a job." It is absolutely iniquitous.

I ask the Minister to consider this matter again, and to see whether he can do this small thing—because it is a small thing that we are asking. Eight public bodies from Tees-side made representation to the Minister during the last few days. They certainly want to hear something from him; they want him to say what he is going to do for them. There is very little encouragement to Members of Parliament to help to develop their areas or to help the Government if they do not get some response. In an endeavour to find new industries I looked up a company. Having sat in this House and listened to the Minister for the Coordination of Defence telling us that unless we could get machine tools the whole of the armaments plan would be very far behind, I asked this company whether it could produce the machine tools. I was able to go back to the Minister and to the War Office and tell them that within three months we could have 250 trained mechanics producing any number of tools that the Government might require.

We have heard the right hon. Gentleman the Member for Epping (Mr. Churchill) say that the success of the rearmament programme centred around this question of machine tools. Here we have a company offering to put 250 trained mechanics straight into a ready-made factory; it is not a question of building a factory and there is no Team Valley scheme about this. Within three months this factory would be a big asset to the Empire, yet the Minister did not move a finger, either to help himself, the country in its emergency or Middlesbrough. I had to discuss with him and with one of the high officials in the War Office the question of helping them in their great—their grave—difficulty, and in the country's grave emergency. I was telling them that I could get these men to produce machine tools, and I was answered: "If your friends like to send in a tender they will have the same opportunity as anybody else." That was at a time when nobody was being asked for tenders except as a formality, and when the Minister and the War Office were scouring America and Germany in order to get what they wanted at any price. They were not asking for tenders and they were willing to pay any price, and yet I was told that if my friends in the depressed areas applied in the ordinary way they would get a chance to compete with other people. I want to know why the Government did not accept that offer to help the country and to help Middlesbrough at the same time.

On the question of the location of industry we have listened to splendid speeches from hon. Members on the other side, particularly some of the young Members. Just a year ago I was able to introduce a Motion on the subject of the location of industry, asking the Government to prohibit the erection of further factories within certain areas. Members who rose on the opposite benches supported that Motion in their speeches, but they voted for a meaningless Amendment which defeated the Motion by about 18 votes. I have listened to Socialist speeches from Tory backbenchers and they were very interesting. Sometimes when I listen to hon. Members opposite I begin to think that their hearts are in the right place, even though their seats are not. I want something more than speeches. If the young men are satisfied that the proposals put forward by us are right, they ought to have the courage to support us in the Lobby. Let them insist upon get- ting an answer from the responsible Minister on this question of machine tools.

I wonder if anybody is noticing that at this moment the Port of London Authority are expanding their docks in London and are spending £10,000,000 as quickly as they can to increase the size of a target that it would be almost impossible for any invader to miss. On the North-East Coast we have three of the finest rivers and docks in the country, and it would be more sensible to spend that £10,000,000 on them. Something like one-third or one-half of the food of the nation comes through London; what chance shall we have if we get those air raids about which people are so afraid? At this moment £10,000,000 is being spent by the Port of London Authority; is the Minister going to stop that expenditure? Is he going to use his persuasion to induce those people to spend the money somewhere else than in the Port of London? It is sheer, deliberate murder of the population of this country, if we should have invaders, for him to allow that to be done. I have pointed out before that the Port of London is very uneconomic. Anybody who carries on trade knows that it costs £1 per ton more to ship through London or out of London as compared with other ports. That is too much. Why should we continue to let public bodies spend all that money in order to make an unmissable target?

A short time ago I tried to enlist the sympathy and support of the right hon. Gentleman the Member for Hillhead (Sir R. Horne) in a matter relating to the production of oil from coal, but I did not get them, because he did not think that it was a practicable proposition. To-day he seems to have been converted. I do not know what interest there is behind it. I recall a few years ago when I was talking to a Member of the other House about the Ottawa Conference and he said: "There is one thing that will cure problems which this Conference will not touch. I wish you would read a book published recently by a friend of mine." So I did. The book was on the subject of bi-metallism, which was going to solve every problem which the Ottawa Conference failed to solve. As I read that book I began to feel a little concerned. I said to my friend: "Is this gentleman interested in the production of silver?" He said: "Yes, he is the biggest man in industry." I said: "That does not, of course, invalidate his arguments, but they do not seem quite so impressive." I have been less impressed ever since with what that right hon. Gentleman has said. The right hon. Gentleman the Member for Hillhead was the author.

On the question of the production of oil from coal I raised the question in March of last year. I do not know how often it had been raised before, but I know that many hon. Members on these benches have raised it. We know also that the former First Lord of the Admiralty told us that if, in another war, we had not oil, we should have nothing else. About 12 months ago I asked the Secretary for Mines for some information on the subject of the production of oil from coal and for information about a particular process, which the right hon. Gentleman the Member for Hillhead has been recommending to-day. The Minister could give no information. On the anniversary almost to the day I asked the Minister the same question. His answer means that the Government have not said that they cannot do it, or that they do not need it, but that they were not sure that it was an economic proposition.

The day after we had been discussing the expenditure of hundreds of millions of pounds upon armaments the Minister for the Co-ordination of Defence told me that the Government were not sure whether this was an economic proposition; but warships, tanks and aeroplanes are not economic propositions. We cannot discuss economy and defence in the same breath. The production of oil from coal by hydrogenation would cost us some £30,000,000 a year in loss of revenue from tax, but we knew that before we spent a penny on it. Before we went ahead with the experiment we knew that we should lose all the taxation, but nobody ever suggested that we could compete with imported oil. Before talking about it being an economic proposition or a profit-making proposition, we must cancel the loss of revenue. What no one on the Front Bench could tell me, the directors of Imperial Chemical Industries were kind enough to tell me themselves. I received a very courteous letter from them asking me, in view of my interest in the matter, to do down and see their plant, and they told me without any secrecy that they are manufacturing oil and making a profit out of it. Why could not the Secretary for Mines tell me that a year ago, or at any rate a month ago? I do not know how long the Government are going to keep up this pose of ignorance of these matters. They cannot be ignorant of them; they must have the information. If they said that there was a great secret about it, I could understand, but they say they do not know anything. I had the pleasure, as I dare say any other Member of the House could have, of spending a day seeing all that was to be seen at that plant. I asked them, "Are you people making money out of it?" and they said, "Yes." Is not that all the Government want to know?

When the right hon. Gentleman the Member for Hillhead advocates the production of coalite by low temperature carbonisation in South Wales, I am entirely with him, and I would go further and say that the only reason why those people are making profits to-day is because they are able to dispose of their by-products for hydrogenation purposes. If the right hon. Gentleman would agreethat alongside each coalite plant there should be a hydrogenation plant—and if the one is practicable and profitable the other is practicable and profitable—then I would agree with him that we should tackle the smoke problem. In New York no one is allowed to burn soft coal; why should it be possible in this country to destroy our beautiful cities with this abominable dirt, and not only destroy our buildings and the health of the community, but waste a great deal of money at the same time? I see that the right hon. Gentleman the Member for Hillhead has now returned; he was not here when I invited him to support me. He was very lukewarm on the previous occasion, but to-day I was very pleased to see him so whole-hearted on the question of the production of oil from coal, and I hope he will stick to his guns. Perhaps he will have a little more influence with the Government than I have.

Sir R. Horne

I entirely support both the processes that the hon. Member has mentioned, but all my information is that South Wales coal is better suited for low-temperature carbonisation than for hydrogenation. I am whole-hearted in advocating the better use of coal in our country by every possible means.

Mr. Edwards

I am much obliged to the right hon. Gentleman. I do not care what the process is; I realise that there are bound to be improvements, and I have no doubt that the process at Billing-ham is very different from what it was at the beginning. I do not care what process is adopted so long as the Government wake up to the fact that, whatever money is spent on ships, tanks and aeroplanes, if there is not the oil available to drive them they might as well be sunk in the sea.

The last time I spoke on this subject of location of industry I made a proposal to the Minister, and to the Minister of Transport. The distressed areas are nearer to London in point of time than are some of the industrial districts around London. We can send shiploads of goods from the Tyne and Tees to the Thames within 24 hours, so what is the use of talking about being near to your market? I have said before that any manufacturer in the North of England can produce goods and be nearer in effect to the London market, while manufacturing very much more cheaply than is possible anywhere within 50 miles of London. There is no reason why fresh industries should not be prohibited in the neighbourhood of London. When somebody wants to start an objectionable trade, you do not say that you cannot interfere with the liberty of the subject; you prohibit it; and it ought to be possible to prohibit what is more than merely objectionable, for it is nothing less than murder to deprive people of their livelihood. Some time ago I suggested to the Government that, instead of deliberately wasting money in widening roads, they should build an entirely new road from the Tyne to London. They could do that at a less cost than widening the old roads, and the old roads could be used as secondary roads. If that were done, the North of England would be brought nearer to London than many places 50 miles away; the speed at which lorries can travel would make it possible to complete the journey from Newcastle to London in six hours, provided that they were allowed to do so, but at the present time anyone who tried to travel from Newcastle to London in a single day would be heavily fined.

With regard to the financial efforts of the Government to induce industrialists to go to distressed areas, I have already said, and I now repeat, that if there is any company in the North of England that wants to put down a factory and can comply with the Government's scheme, I would arrange to finance it at a less cost than the Government. That is an absurd position. Until the last Debate, applicants were required to pay 5 per cent. interest, to find half the capital, and to repay it in five years. I wonder that the Chancellor of the Exchequer or any Minister should have the audacity to get up and talk such rubbish to the House. Anyone who can fulfil the conditions of the Government scheme—

The Financial Secretary to the Treasury (Lieut.-Colonel Colville)

If any person can get accommodation from a banker or from other sources, the Special Areas Reconstruction Association is debarred from giving him help.

Mr. Edwards

Will the Financial Secretary tell me that, if I have £5,000 to put into a £10,000 company, any banker in the country would refuse me the other £5,000?

Lieut.-Colonel Colville

I do not know what the hon. Member's particular instance is, but the facts are that, if a person who is making application can get accommodation from a bank, he will not receive it from the Association.

Mr. Edwards

The only conclusion one can draw from that is that the Government are determined not to give any assistance at all.

7.55 p.m.

Major Oscar Guest

I happen to be one of those people who are going to start in a small way a works in a Special Area, and I should like to say that, being in that position, I have received great assistance from the Commissioner for the Special Areas, both at headquarters and in the district concerned. Undoubtedly, whatever may be the shortcomings of this Bill, a great attempt is being made to induce industrialists to go to the Special Areas. What such an industrialist looks for, in addition to a site and a factory, is labour, and the difficulty undoubtedly is to obtain trained young labour. To meet that situation, training centres have been established throughout these areas, and there is a small centre near to the South Wales area where I am proposing to go. I feel, however, that it might be better equipped for the work. I believe that some 150 boys go through that training centre every six weeks, and I should like to see some power installed there, and a few lathes and machines which the lads could learn to use, so that they could be turned out as useful labour for the district in which they live. At the present moment, I believe, they have to be sent to Bristol and other centres where power is available, but I feel that, particularly in view of the fact that a trading estate is being started not very far to the south, the installation of a certain amount of power at this training centre would cut short a great deal of delay in the training of labour in that part of the country.

I have been interested in the remarks of several hon. Members this afternoon on the question of the location of industry. I am glad that that subject has not been hurriedly brought into the present Bill, and that a Commission is to be set up to consider it more deeply. While there is a great deal to be said for trying to locate businesses and factories where labour is available, if it is possible for industry to go to such places of its own accord I think it is very much better. Inducements for industry to do that are arising. We deplore the growth of factories in places like London, but I am sure they will not continue to grow so fast, because labour is becoming very difficult to find in London, whereas in the North or in Wales a great deal of labour is to be found. That, I think, is an argument which will influence manufacturers very strongly. Therefore, I think the question of the location of industry should not be rushed at in too great a hurry, and I am not sure that it is a panacea for all our troubles. It may be that there are places where there should be some limitation of the increase of factories, but I think that the natural economic causes of labour and of cheaper working will induce manufacturers to go where these are to be found. To return to my original point, I feel that an increase in the number of local training centres is important. In these districts we can find labour, we can find land, and the Government will assist with the provision of factories, water supply, rates, and so on, but it is difficult to find trained labour, and the great necessity is an increased provision of local training centres in places where labour is needed. If these training centres could be equipped with a certain amount of machinery and power to drive it, the result would be an added inducement to industrialists to go there.

8.1 p.m.

Mr. Daggar

When the Financial Resolution of this Bill was before the House, the Minister of Labour, replying to the hon. Member for Spennymoor (Mr. Batey), said: I know the hon. Member to be a fair controversialist, and I hope that when he is telling the tale the next time he will tell it both ways and tell it adequately. I shall endeavour to deal with a phase of the subject which requires stressing once again, but I regret I cannot give an undertaking to tell the tale "both ways"—whatever that may mean—although I observe the commandment given us by the Minister himself: "Thou shalt think." I am disappointed with the Bill, although, in many ways, it is a fitting climax to the vague utterances by the Minister prior to its introduction. He said: The Government … desire to bring renewed hope and prosperity to the people who live in the depressed areas. He went on to say: Government have learned much from the experiments initiated by the Commissioner … We have hardly seen more than the beginning of these far-reaching schemes … Preferential treatment, involving unconventional principles, is still required for the depressed areas, and the Government are in earnest in this matter."—[OFFICIAL REPORT, 8th December, 1936; col. 1875, Vol. 318.] I have found very little in the Bill to justify the statement that it will bring new hope and prosperity to the depressed areas. Nor have I found any provision for far-reaching schemes, or any evidence that the Government are in earnest in this matter. The inadequacy of the Measure is only equalled by the absurd utterances of the Minister himself. It is amazing and incredible that the country should tolerate the payment of unemployment benefit instead of the provision of employment for our people. In unemployment benefit alone the nation has spent more than £770,000,000 since 1913. More than £752,000,000 of that has been expended since 1920. That, to use the language of the Minister, is not all the tale. If it is assumed that during that period we have had an annual average of 1,000,000 persons unemployed and that the product of an employed man is worth £200 a year, it means that we have lost in wealth in this country, expressed in money, the stupendous total of no less thin £4,000,000,000.

This Bill is further evidence that the policy of the Government is still based on the idea that it is cheaper, more economical to pay unemployment benefit and assistance allowance than to provide employment. The Bill, which provides the Commissioner with power either to purchase a site for a factory and let it, or build one and let it, or pay a proportion of the rent and rates, may be of assistance, but such proposals are simply Tory trifling with the matter. Whenever this question of the Special Areas is before the House, we are always told about the need for the whole policy, but little is done. On 13th November, 1934, the Chancellor of the Exchequer said: The subject is one which is sufficiently exceptional to warrant exceptional treatment, and the Secretary of State for Scotland on 9th March last, speaking in support of the Money Resolution, declared that "bold and unconventional methods will have still to be employed."

When is it proposed to employ these methods? They are certainly not in the Bill before the House to-day. Whenever we stress these points, we are told it is to be regretted that the improvement in trade has not reached all the distressed areas. The Minister of Labour on the 8th December said: In spite of the rising tide of prosperity elsewhere, … there are still areas upon which the great revival of industrial activity has, as yet, made relatively little impression. I say little impression' because it is by no means the case that there has been no improvement in the Special Areas generally." [OFFICIAL REPORT, 8th December, 1936; col. 1873, Vol. 318.] That is a remarkable piece of special pleading for the Government's policy of inaction. Proposals that do not touch the problem in Durham, Glamorgan and Monmouthshire, are positively useless and a sheer waste of time. I make that assertion, because, as Mr. Malcolm Stewart states in his report, Durham, Glamorgan and Monmouthshire comprise the greater part of the Special Areas, and the Government's solution is the transference of the unemployed to other parts of the country, which is a painful and inadequate process. If it were a solution, the problem would by now have become non-existent, because between 1921 and 1935, we are told, well over half a million people migrated from those three areas. A number roughly equal to one-sixth to-day's population—left those three counties in the 14 years. Migration is considered by the Government to be the most effective method of dealing with the problem in South Wales.

The "News-Chronicle0" points out that in the second industrial survey of South Wales staggering figures are given to show how the population of South Wales has withered since 1921 owing to migration. The net loss by migration between 1921 and 1931 was 242,000, and between 1931 and 1935 another 72,000 people left South Wales. The survey estimates that by 1945 the population will decrease by another 250,000—a drop from 1,852,500 in 1936 to 1,603,000 in r945. This drain on the area will probably wipe out the surplus working population prior to 1945. The "Times" on 8th March said: With the aid of these figures the imagination can picture an increasing decay and paralysis that will settle on the Special Areas unless they receive a great deal more assistance than the Government yet plan. There appear—and here I agree with the Minister of Labour—to be three methods on which there is agreement for dealing with the problem: (1) new industries, (2) revival of the old ones, or (3) migration. But we shall be compelled to consider other methods, such as the relief of the burden of public assistance in the Special Areas, payment of pensions at an earlier age, and reduction in working hours.

I desire to discuss the cause of unemployment in the depressed areas. The Minister himself, on 8th December last year, said: When we turn to South Wales and parts of Durham and other coal areas, especially those concerned with the export trade, we find a different picture."— [OFFICIAL REPORT, 8th December, 1936; col. 1878, Vol. 318.] The backbone of the industrial prosperity of South Wales was coal-mining and it was the depression of that industry that was the root cause of unemployment in the area. Again, I submit there is no hope for South Wales and the other coal exporting districts unless steps are taken to revive the mining industry in some form or another. I feel convinced that this House does not realise the character and nature of the decline in the mining industry, and unless it does so there appears to be little hope of prosperity for the Special Areas of South Wales. Exports of coal from Great Britain in 1936, as compared with 1935, show a decrease of over 4,186,000 tons, and in the two years 1934 to 1936 the decrease was 3,127,000 tons. I am surprised at the observations made by the hon. Gentleman the Under-Secretary for Scotland, who introduced this Measure to-day, because if you compare 1936 with 1929 there is a decrease in the export of coal from this country of more than 25,000,000 tons. No one can remain content in view of those facts. There was a decrease of 25,500,000 tons in seven years. If you compare the two months January and February of this year with those of either 1934 or 1935 the decline continues to the extent of over 600,000 tons. The export of coal from South Wales in 1935 was one-half of what it was in 1923. It was 9,081,000 tons less in 1935 than in 1929.

The increasing amount of coal produced by machinery, without a corresponding expansion of the market, is bound to decrease the number of men employed. The amount of coal cut by machinery in Great Britain in 1920 was only 30,000,000 tons, or 13.2 per cent. of the whole. From 1931 to 1935 that amount increased to 113,000,000 tons, or 51 per cent. of the total produced. In South Wales, while the increase has not been so marked we produced in 1920 only about 2 per cent. of the total output by machinery. In 1935 18 per cent. of the coal was produced by machinery, or 6,338,000 tons. The result is that the number employed in the mines has fallen from 1,227,000 in 1920 to 780,000 in 1935. The extent to which the introduction of machinery has rendered unnecessary the employment of men is clearly shown in the recently published second Industrial Survey of South Wales, which is a credit to the people who undertook to gather the information contained in it. The "Times" did not overestimate it when they said it was an enlightening and indeed an inspiring guide, though it is one from which the Government have drawn no inspiration in the drafting of this Bill.

In that survey it is pointed out that, though the rate of decline in employment was greatest in the five years between 1924 and 1929, the decline has continued in the five years following 1929 and that, although 1932 was the year of the deepest depression, there were fewer workers employed in 1933 than in 1932 and in 1934 than in 1933. It is true that in 1933 the output of coal in South Wales and Monmouthshire was slightly less than in the previous year, but in 1934 the output was equal to that of 1932, although the average numbers employed were fewer by well over 4,000. All we get from the Minister of Labour is talk about 260 families having been placed on the land under the land settlement scheme. What is the use of such talk when the Deputy Commissioner for England and Wales recently said we may move heaven and earth to put 500 men back to work and the very next day a pit will close down and throw out twice that number? Then again the considerable economy that has been effected in the consumption of coal is of considerable importance and has not yet been appreciated by the House.

Take the production of gas, the generation of electricity and the production of iron and steel. We find, according to the Fuel Research Board's report for 1935, that if the consumption of coal in those three industries had been increased in proportion to the increase in their products in 1934 as compared with 1910, we should be consuming to-day 31,500 tons more of coal. It also points out that in 1910 the coal consumed at home was 180,000,000 tons, whereas in 1934 only 161,000,000 tons were consumed. In face of those facts we are entitled to ask that a bold policy should be formulated to deal with the problem, particularly in South Wales, than which we are told no comparable area on earth has contributed so much to the wealth and material happiness of the world. An expenditure of £2,000,000 will not save us in the Special Areas. Whatever may be the effect of this Bill, I am convinced that the problem of the decline of the mining industry will have to be faced.

8.20 p.m.

Mr. Cartland

Whenever we have a Debate on the Special Areas it ranges over a wide field, and to-day has been no exception, but it is really extraordinary how little criticism has been directed against the Bill. If there has been criticism in the past it is that the proposals which have been brought forward from time to time have been brought forward too late, and that whenever proposals are brought forward piecemeal, as on this occasion, they are not comprehensive enough to deal with the situation that faces us. I believe that, if all the different measures that we have had from time to time had been brought forward in one big comprehensive Measure five years ago, the problem would have been very much easier to deal with. There is no doubt that bringing forward this sort of legislation in a piecemeal fashion leads to a great loss in the efficacy of the legislation that is introduced, and the caution doubtless to the Government very necessary, which they have seen fit to show in bringing forward their various proposals has increased the difficulties. I do not feel that it is quite fair to blame the Minister of Labour, as hon Members opposite do. I had much rather support the contention of my hon. Friend the Member for Stockton (Mr. Macmillan) that this is a problem which is the immediate legacy of the War, and one which has been facing every Government for the last 14 or 15 years. You can blame the right hon. Gentleman, if you like, for not taking much more drastic steps now and not proceeding on the lines which you would like him to, but I do not think it is right to blame him for the problem as it exists.

In 1919 we had sown the seeds of the problem with which we are trying to deal. From 1923 onwards the export trades were showing a considerably higher percentage of unemployment than the other trades in the country. From 1924 onwards the unemployment percentage was considerably higher in Wales and the North-East than for the rest of the country, and already then you were having to deal with the very special circumstances that arose from the sudden cessation of war work. That seems to be very much a warning for the future. I find also that in 1919 the coal mining industry absorbed 200,000 workers which neither the output nor the export trade could possibly justify at the time. I stress these figures because, first of all, this is not a problem which has arisen in the last five years but one which has been going on ever since the War and, secondly, because surely there are lessons to be learnt from these historical facts. Supposing we had said 10 years ago "This is a special industries problem; it is not a Special Areas problem." If we had taken steps 10 years ago, or even seven years ago, to deal with these special problems of industry on an industrial basis, I believe that we should have made a considerable improvement on what the position is to-day, and that we should have taken steps which we shall be forced to take in the future in order to deal with those same problems.

This Bill is part of a long-range programme of the Government.

Mr. George Griffiths

Who says so?

Mr. Cartland

The hon. Gentleman the Member for Hemsworth (Mr. G. Griffiths) must have gathered that this is one of many proposals which we have had, and which we are still to expect on a long-range basis. Trading estates are not an immediate practical proposition to put men back to work. [Interruption.] It is for five years. If you are going to make this a long-range programme and deal with trading estates and so on, five years is far too short a period. If this is a long-range programme, I take it that we are relying on rearmament for our short-term programme, and I do not see anything particularly dangerous in that. It is only a form of public works. The hon. and gallant Gentleman the Member for Pembroke (Major Lloyd George) asked, "What is to happen when rearmament comes to an end?" You might just as well ask, if you adopt a policy of public works, what is going to happen when you finish your public works. Whether it be public works or work of an agricultural nature or rearmament, you will still have to answer the question, What is to happen when it comes to an end? This is part of a programme designed as a long-range remedy, and it is based on the contention that the expansion of the light industries will fill the gap which has been caused by the contraction of the heavy industries. That is how I understand it. The House is entitled to ask, and ought to ask, Will the light trades fill, even if they expand, the gap which has been caused? I see a far greater danger in the lighter trades not absorbing the unemployed to the capacity which is imagined or, having expanded, then failing through a falling off of consumption, than the coming to an end of the rearmament programme. Therefore, I ask, Is there a limit to the expansion of these light trades? My right hon. Friend the Chancellor of the Exchequer, when he spoke on 12th March, said: Do not let the Committee think that there is an indefinite number of new industries that can be started all over the country. There is only a certain amount of new work that you can expect people to start."— [OFFICIAL REPORT, 12th March, 1937; col. 1582, Vol. 321.] That is a very obvious statement with which we should all agree. In principle, I think that everybody has supported the Bill. Some may say that It will do very little good or that they would like something bigger, but they have supported it, but what strikes me is that there is not a limitless supply of these light industries. You cannot have light industries coming not only to these new trading estates, but to all these new certified areas. The hon. Member for East Middlesbrough (Mr. Edwards) and my hon. and gallant Friend the Member for Cleveland (Commander Bower) suggested that industries should come to their constituencies, and so on. I have ventured to speak on this subject because there is a trading estate in my constituency, and a great number of light industries which have been started in recent times. Birmingham is the home of light industries. I am certain that we are in danger of imagining that there can be a far greater expansion of light industries, and they have a far greater capacity for absorbing the unemployed than in point of fact they have.

I want to ask my hon. Friend a question, or perhaps he will ask his right hon. Friend. There has been a rise in the cost of food supplies, and, as far as we can see, the rise in the cost of the foodstuffs and raw materials is likely to continue for some time. If the rise continues there is bound to be, unless certain other measures are taken to counteract it, a fall in the consuming power which you have to use in order to get these light industries going. If you have to spend more on your butter or margarine, or whatever it may be, you will have less money for your radio or other so-called luxuries.

Mr. E. J. Williams

Do I understand the argument of the hon. Member to be that if we establish light industries in the Special Areas the hon. Gentleman will be faced with unemployment in Birmingham?

Mr. Cartland

I am coming to that point. It is right that the House should certainly consider all these points when considering this Bill. The point I want to make to my hon. Friend on the Front Bench at the moment is: Can he say whether this rise in foodstuffs is being very carefully watched and that the position is being surveyed as far as possible to decide what effect it may have on the light industries which we want to see set up in the Special Areas?

Obviously these light trades in the main have started in favourable times mostly in the past few years and in favourable places, and by this Bill we offer inducement for new industries to start in competition. We are really for the first time subsidising firms in the same industry who are going to compete against each other in this country. It is entirely a new form of subsidy. I hope that I am wrong, but what may possibly arise is that you may be faced with a series of cut price wars. It is no good putting a man in work in Treforest if you put a man out of work in Slough or King's Norton. Therefore, I want to make two suggestions to the hon. Gentleman and to the Government. Should not the terms of reference of the Royal Commission who are to consider the whole question of location be widened to the extent that they should also consider the actual licensing of light trades starting afresh? If you are to start these inducements and look for a big expansion of light trades to solve the problem of the unemployment in the heavy industries, can you allow people to come in to that trade—it has happened in agriculture over and over again—and perhaps force the bottom out of the market and bring ruin to a large number of trades which are providing employment and doing well? My second suggestion is that we should look into the question whether any agreement could be made to prevent the light industries which exist from starting on a war, immediately after the five years are over and these inducements come to an end, or during the first five years of the growth of the new industries, and taking such measures as to drive those new industries out of existence altogether; or to prevent these new industries, which are to some extent subsidised, competing on unfair terms with those firms which have no inducement and are providing employment elsewhere.

This question of subsidising firms which are engaged in the same trade has arisen because we are dealing with this problem from the area point of view rather than by industries. The Minister of Labour referred to the very remarkable report issued by Sir William Beveridge, which showed that the heaviest unemployment, apart from certain mining counties, is in the rural districts. Has not agriculture really to some extent become a depressed industry, and are we not going to be faced very soon with the necessity of taking steps to get agriculture out of depression? We are going to have pockets of acute depression in agricultural rural districts. More and more I am forced to the conclusion—here I am supported by the figures that were given by the hon. Member for Chester-le-Street (Mr. Lawson)—that we can only hope to solve this particular problem, and the problem which must arise from time to time in other industries, if we deal with it on an industrial basis and not on the basis of areas. As the hon. Member said, what is really happening is that we are living through a second industrial revolution. The hon. and gallant Member for Pembroke said practically the same thing, and the hon. Member for Stockton said that it was not only an industrial revolution but a social revolution.

If we really believe that—and the Under-Secretary of State for Scotland practically said the same thing, but in rather different language—has not the time come when we ought to split up this problem of what we commonly call the Special Areas into two, dealing with reconstruction on an area basis and with development on an industrial basis? In development on an industrial basis I should also include agriculture. For the purpose of reconstruction we must have commissioners. I do not like the idea of a single commissioner. I think the work which the Chief Commissioner for England and Wales does could be much better done by the Minister of Labour, but I do see some benefit to be gained by having a local district commissioner, say, for South Wales, another for the North-East coast, and so on. With regard to areas, we speak generally of South Wales and the North-East coast, we do not fully comprehend the intricacy of the Schedule of the 1934 Act. For reconstruction we want commissioners, and we need to widen the basis of their operations and to classify them roughly as people think of them. The commissioners dealing with reconstruction would deal with the pockets of chronic unem- ployment where there is no hope of recovery and no possible hope of inducing new industries to go, and where the only satisfactory answer to the problem —these problems exist all over England and Wales and not just in the Special Areas, for you find them in Gloucestershire and in so-called prosperous counties—

Mr. G. Griffiths

In South Yorkshire.

Mr. Cartland

Yes, in South Yorkshire. In regard to this problem the Commissioners will have to deal with it by transference, demolition, clearing up of sites and so on. It is astonishing that of the commitments of the Special Areas Commissioners, less than £250,000 has been spent on the clearing up of sites, amenities, etc. That is very little. I am certain, from the reconstruction point of view, that much can be done through the district commissioners.

For the development point of view we must have a Cabinet Minister, for this means Cabinet policy. We must have either the Minister of Labour or some other Minister. The development policy includes location and licensing of industries. It includes the question whether we should allow certain industries to start. More and more we shall have to come to the question whether we should allow certain industries to start. It may be that we have obtained a sufficiency of a particular trade or industry. This would lead to many other associated questions, such as industrial retirement, pensions and so forth. We cannot look at the starting of industries and the building of factories without considering the housing problem. A great factory is to be put up in my constituency, and we shall want a very large amount of labour. I cannot imagine where the labour is to come from, and if it does come—I hope some will come from South Wales—where the people are going to live. The problem of the location of industries includes the whole planning of amenities, and so on.

Let me now deal with one question which has been touched upon and which I have raised before, namely, that of juvenile labour. The hon. Member for Abertillery (Mr. Daggar) gave some remarkable figures from the Industrial Survey of South Wales. Everyone will pay tribute to the magnificent way in which that report has been got out, and we hope that it will be copied in other parts of the country. One of the serious things brought out in that report is what is to happen to juvenile labour in a short time in South Wales. But: my point is, what is happening to juvenile labour at this moment? At the present time there are roughly 10,000 boys and 12,000 girls out of work. Of the 10,000 boys, 4,000 are engaged in the distributive trades, and of the 12,000 girls, 4,000 are registered as in the distributive trades.

Mr. Kirby

In what area?

Mr. Cartland

These figures are for Great Britain.

Mr. Kirby

We have about half of those in Liverpool.

Mr. Kelly

What is the date of those figures? They are very astonishing.

Mr. Cartland

They are from the last Ministry of Labour Gazette. It is the registered unemployment for juveniles. My point is, that if we take these figures and also the long-term unemployment we find that the third worst trade for men and the second worst trade for women, is the distributive trade. We are allowing our boys and girls to go into the distributive trades and doing nothing about it, in spite of the fact that we are going to be faced in a short time with a very considerable falling off in the number of juveniles available for employment. Is it not possible for the Commissioner or the Minister of Labour to take some steps to prevent the distributive trades from being filled with boys and girls for whom virtually there is no possibility of lasting work? As long as such a large proportion of boys and girls are going into the distributive trades you are going to have aggravated unemployment, and, indeed, you are not starting them in life as they deserve to be started. I hope the Minister will say that he is concerned with the problem of the drift of juveniles into the distributive trades. If we can look at this problem on a national basis we are much more likely to prevent any of the acute difficulties arising in the light industries in the Special Areas, but the Special Area problem will remain a problem of the revival of our heavy industries, and particularly the coal industry. I hope the Minister will see that the promised Coal Bill is brought in at an early date and that it will be thoroughly drastic in its proposals, because I believe that only in dealing drastically with the heavy trades of the country shall we find a solution for the problem of the Special Areas.

Mr. Silverman

Before the hon. Member concludes his interesting speech, will he look again at the figures he gave to the House with regard to juvenile unemployment, 10,000 boys and a total of 12,000 girls for the whole country? I can hardly think he really meant that. Is not the figure more like 120,000? It is difficult for hon. Members from a city like Liverpool, where the figures of juvenile unemployment must be quite 6,000, to understand the hon. Member's figures. One of my hon. Friends behind me has said that there are 25,000 juveniles unemployed in his area.

Mr. Cartland

I looked up the figures this morning and got them from the Ministry of Labour Gazette, in the usual monthly table showing the registered juvenile unemployed. I think I am right in the figures I gave, but if I have made a mistake I must apologise to the House.

8.49 p.m.

Mr. W. Roberts

We have listened to a very interesting speech from the hon. Member for King's Norton (Mr. Cart-land). It is regrettable that the idea of recommending the light industries as a solution of the problem of the Special Areas should be over-estimated. Many of us do not over-estimate it; we regard the revival of our heavy industries as of very great importance. But you are not going to revive the heavy industries without increasing the export trade, and in considering a Bill of this sort it is easy to concentrate on the internal adjustments which can be made to improve the employment position in these districts and forget the fundamental industries of the country, which to a large extent are the heavy industries of coal, iron and steel, and shipbuilding. The tendency to forget this is due to the piecemeal—I use the word used by the hon. Member—nature of the legislation dealing with the Special Areas and the problem of unemployment. We have had to fight for every inch of the ground we have gained. There is no Bill dealing with the Special Areas which we have not had to drag out of the Government. On this occasion it may be due perhaps to hon. Members below the Gangway who support the Government, but on other occasions any legislation has been due to the Opposition.

One of my criticisms is that this piecemeal legislation does not deal comprehensively with the whole problem. The question whether there should be a Minister in charge of this problem and whether it is a good thing to have a Chief Commissioner, is very appropriate to this Bill. I agree entirely that it should be the responsibility of the Cabinet as a whole, and that there should be a Minister specially responsible. Almost all Ministers in the Cabinet are now concerned with the Special Areas. The Minister for the Co-ordination of Defence is concerned. The hon. Member for Middlesbrough, East (Mr. A. Edwards) suggested a new road from Tyneside to London and we in Cumberland lay great emphasis on a new coast road which would open up the isolated industrial districts of West Cumberland. That is the business of the Minister of Transport. The Service Ministers are also concerned, and of course the Minister of Labour, and the Treasury. But as a result of the tendency to create appointments and organisations to deal with special aspects of the problem you have a whole jungle of new organisations growing up. You have the Trading Estates, which are special entities, and S.A.R.A.; the Land Settlement Association dealing with one side of the problem, and the Unemployment Assistance Board dealing with another side of the same problem. There is also the Nuffield Trust, and local development councils which have been established in the Special Areas and elsewhere. The work of the Commissioner is becoming little more than that of a co-ordinating officer. I do not think that was the intention or what Parliament expected, three years ago when the Special Areas Act was passed. We thought that was going to be a unifying Act which would get comprehensive action dealing with the whole problem.

It is perfectly clear that the present Bill with its small extensions is not going to make much difference. If you take the figure of £400 capital for one man employed it gives you an employment figure of 5,000 out of a total of 300,000 unemployed. Nobody in this House believes that as a result of the operation of this Bill the problem of the distressed areas, when it comes to be reviewed in two years' time, will be substantially different. That is the real criticism of the Bill. This is due to the fact that we have had to press on the Government at every turn our demand that something more shall be done. The Minister of Labour, who, I believe, is still proud of his Liberalism—I do not say that I am proud of his Liberalism—will probably respect the opinion of John Stuart Mill, who said that in face of a great social evil a small remedy does not have a small effect, but has no effect. That is the feeling of many hon. Members with regard to some of the work that has been done.

Right hon. Gentlemen on the Government benches seem to think that they may safely trust to the Defence programme to bring an improvement to the Northern industrial districts and the heavy industries. I believe they are relying on that, and not on this piecemeal legislation which pressure of public opinion has succeeded in making them bring forward. But the effect of the rearmament programme, as was said by the hon. Member for King's Norton, will be very patchy. For instance, Cumberland has practically not benefited from the rearmament programme. I am informed by the Development Council there that not a single contract has been placed in that Special Area in connection with the Defence programme. Unless there is not only co-ordination of Defence, but some co-ordination of the work, there will be that sort of result. Even if the Government are relying upon the Defence programme to improve the unemployment position, they must have some organisation, through the Commissioner, which will ensure a distribution of the work that is available.

Another example of the present lack of a comprehensive grasp of this problem is to be found in the question of transference. To-day hon. Members have been talking about new industries, but the Ministry of Labour is busy all the time in the haphazard transference of men from the Special Areas. There is no real selection. I am afraid that even if the scheme of transference were a success, the problem that would be left in regard to the distressed areas would be far worse than the problem to-day. There would remain only the old people, the crocks, the inefficient people—those to whom it would be of no use bringing light industries. While the Ministry of Labour is busy skimming off the cream of the population, the Commissioner for the Special Areas is trying to bring to those areas new industries which need the very type of labour that is being transferred. Considering the matter from the point of view of the individual, I quite understand the value of transference. Last, night, in a derelict mining village in the Special Area of Cumberland, where the pit has been closed down for the last 10 years, I was told of a boy in his early 'teens, trained under a different authority as a waiter, who has come down to within 50 miles of London. I am glad that that boy has a chance. His mother is coming down with him; the family is being broken up. We have heard a great deal from the Government about the importance of maintaining family unity. I am not sure that a boy in his early teens is very well placed in a hotel near London. I want to know whether, under the new Education Act, this type of subsidised transference is regarded as beneficial employment for children of 14 years of age. I think it is most undesirable that they should be transferred.

There are three sorts of transference: first the transfer of individuals; secondly, the transfer of whole families; and thirdly, the transfer of whole communities. If there is to be transference, I believe the last sort is by far the best. There are isolated mining villages in Durham, the North-East Coast, Cumberland and South Wales to which one could never bring any sort of industry. The village which has sprung up at the pithead cannot be the right sort of unit for a light industry which might be introduced into the district. The conditions in those villages are very bad, they have no future, and they are probably condemned. With the power which the Government can wield over industrialists who are receiving large orders under the Defence programme, they could transfer communities of 50 or 100 families to meet cases such as that mentioned by the hon. Member for King's. Norton, who said that he did not know from where the labour for a new factory in his area was to come. That may or may not be a good policy, but I am sure it would be a better policy than taking the young people out of the area and leaving the area derelict at the same time as you are hoping to bring new industries into it.

In connection with the question of transference, I remember a story told to me about a man who was transferred. He had his fare paid, and received a pair of boots and a pair of trousers. He presented himself to an employer in the South, and the employer looked at him—mainly at his trousers—and said, "Oh, you are a D.A. man—that means 8d. an hour," the correct wage being 11d. an hour. I do not vouch for that story, but there is a belief in the distressed areas that, when they are transferred, men are expected to accept less. In the North of England we are very clannish people, and we do not easily settle down in the South. I suggest that if a system of transference is to be made successful, and if there are not to be so many men returning as soon as they fall out of work or are ill for a short period, the transference of small communities—the transfer, if possible, of the social amenities as well—would be a far preferable policy to the haphazard system, beneficial though it be to individuals in some cases, adapted at the present time.

There is another point I wish to make. We are told that there has been a very considerable reduction in unemployment, and if one takes the figures in the White Paper, one finds that in Durham and Tyneside, between 28th January, 1935, and the same date in 1937, the reduction in unemployment was 29.9 per cent. The average was 26.3 per cent. In Cumberland, however, there was a reduction of only 9.8 per cent., a little more than one-third of the average reduction. I wonder whether the reason is that Cumberland is a small area with a comparatively small total number of unemployed—round about 10,000—and that we have been overlooked. I want to press upon the Minister that there is another way of considering that problem, and it is that because in total numbers it is a small problem, it is one that could be effectively solved. Although the total figures are small, we have towns where the percentage of unemployment is between 40 and 46—as high as it is anywhere else in the country. I do not believe that those men are worse workers than the men on the North-East Coast where the percentage is lower. I believe that the opportunities for work are lacking and that the problem might be solved by a vigorous application of the powers now possessed by various Ministries with, perhaps an extension of those powers in some respects. The opening of one new mine and the reopening of one old mine will help but will not solve the whole problem. That work will absorb perhaps 2,000 or 3,000 men, leaving 7,000 or 8,000 on the present figures still out of employment.

I do not want to see West Cumberland becoming permanently dependent upon the iron and steel industry, iron-ore mining and coal mining. I realise that in that case when the next slump came, we should be back again where we are. Rather than see all these men re-absorbed in the heavy industries, I would prefer to see some alternative work provided to give a balance to the district. For that we need, if not a trading estate, at any rate something of that sort. I would like the Minister to explain more fully what is meant by "site companies." In Cumberland we have had three new industries in the last few years. They all came there because there were factories suitable for them. They occupied existing buildings. The last industry which came there, certainly, would not have done so were it not that a large factory was obtainable on satisfactory terms, and the same is true of the two others which came there in the last few years. It is of great importance, if all these industries are not to go to areas which have trading estates, that Cumberland should have something on similar lines. Perhaps the site companies suggested in this Bill would be more appropriate there than trading estates because ours is a scattered district in which it would be impossible to find one locality suitable for a number of industries. The industries must be scattered about where the population exists in our towns and villages.

I also desire to refer to the question of land drainage which is dealt with in the Bill. I asked the Minister recently whether it would be possible to extend that provision to districts adjoining Special Areas and I gathered from his answer, though I was not sure, that it would not be possible to do so. I recognise that this is one of the cases in which it can be said that we are trying to extend benefits which have been given to the Special Areas, but I suggest that there is here a method of getting over the difficulties resulting from these closely defined areas being treated as Special Areas. There are difficulties attendant upon a demarcation of boundaries which is frequently most unfair. At the opening of the Debate we were told that all this provision did was to put England on a level with Scotland in this respect. I submit that it will only put the Special Areas of England on a level with Scotland because I understand that there is a grant for field drainage available everywhere in Scotland.

When I put that question to the Minister, however, there was something more in my mind than the question of widening the area of possible employment. I had in mind the fact that the Land Settlement Association is trying to establish unemployed men as smallholders. While we all hope that the Association will be successful in that policy, there is another policy which might be equally valuable. There is a great deal of land in this country which is potentially good, but which for one reason or another has been wasted. It lacks drainage, it is not in cultivation but it is capable of enormous improvement. The policy of land settlement followed in many countries on the Continent is to take land which has become bad because of neglect, to use the labour available in turning it into good land and then to settle smallholders upon it. That is a policy which might have been tried in this country and there is a great deal of land which could be used in that way. Drainage is one of the most important things in this connection and if it were possible to extend this grant much could be done. I have seen it done in Cumberland with unemployed men, not under a Government scheme but under a voluntary scheme, and the results were surprising. While the Government are relying mainly on the Defence programme at present, I do not agree with the hon. Member who spoke last that there is some sort of limit to the amount of prosperity which is possible in this country. The hon. Member suggested that one must not rely too much upon the light industries because there was such a limit, and he quoted words of the Chancellor of the Exchequer in support of his view.

Mr. Cartland

I did not say there was a limit; I asked, was there a limit?

Mr. Roberts

I am sorry if I misinterpreted the hon. Member, but I thought he had given an answer to his own question, if not a very certain answer, to the effect that there probably was such a limit. I think we are a long way from reaching the limit of prosperity for the persons at present unemployed which can be imagined as possible. We talk in terms of unemployment and depression and so forth but this is really the old problem of poverty. It is a perfectly simple problem. The people are poor because they have too little to spend on what they need. If, instead of being on the dole, they were receiving more money because they were producing something, they would also be consuming more, and we have not begun to develop the possibilities of increased prosperity which exist in the present state of scientific development. It is when our requirements as regards food, clothing and shelter have been satisfied, that the light industries come in.

Mr. Levy

In view of what the lion. Member is now saying, will he tell us why he voted against import duties?

Mr. Roberts

I cannot on the present occasion go into all the arguments on that question, but I will give the hon. Member one argument and it is this: Just as I believe that we have not reached the limit of possibility as regards interchange between individuals in this country, so I believe we have not developed fully by any means the possibilities of the interchange of goods between one country and another. I believe that fundamentally the second of these two probably comes first. That is a very wide subject into which I do not want to go. I want to remind the House that we sometimes get tangled in words and that the real problem which we are facing to-day is the old problem of poverty. The dole is a method of sharing the wealth that exists. That is all it is. It is taking from those who have and giving to those who do not happen to be earning wages. If we could spread employment, not the existing employment, but increased employment, so that the total wealth to be divided could be increased, we would not only have solved the problem of the depressed areas, but we would have gone a long way towards solving the problem of unemployment.

9.16 p.m.

Mr. T. Smith

I hope that the hon. Member for North Cumberland (Mr. W. Roberts) will excuse me if I do not follow him, but it is refreshing to hear from the Liberal benches that the problem of the distressed areas is the problem of poverty. I would like to follow the hon. Member for King's Norton (Mr. Cartland), who rather chided this side of the House by saying that nobody had spoken against the Bill. By the time the hon. Member had finished his speech I wondered whether he was in favour of it or against it. With regard to comparing statistics in the mining industry, we on these benches would like to be in the position in which we were in 1924. When the hon. Member refers to 1919, he must recall from these benches and from the Miners' Federation generally we put up such a searching inquiry in the Sankey Commission that if those recommendations had been carried out we would not have been in the position in which we are to-day. It seems such a pity that the right hon. Gentleman the Member for Hillhead (Sir R. Horne) should come here early in the day, get on his feet, and then leave the House. He is a convert now to a subsidy for export coal. In 1921 the same right hon. Gentleman was in charge of the mines, and he was responsible for decontrolling the mining industry six months before the Act of Parliament said they were to be decontrolled. Some of us stood a lock-out for 13 weeks, and when we asked for a subsidy for export coal the same right hon. Gentleman and his colleagues replied by saying that such a subsidy would lead to retaliation. It is nice to have this historical survey from those who years ago were opposed to these things.

We on these benches need not waste much time with regard to this Bill. We say without the slightest hesitation that it is inadequate and that when the whole of the proposals are put into force it will not settle the problem of the Special Areas. I have been away from the House on business for about five months travelling through three Dominions, and the question I was asked more than a hundred times by people in different classes of society was, "What are these Special Areas? How does it come about that in these days, when the British House of Commons is spending millions of pounds on armaments, it should be necessary for one big-hearted man like Lord Nuffield to give £2,000,000 for the Special Areas?" They cannot understand it. I had to point out that the Special Areas were traceable largely to the decline in the coal mining industry, and this Debate has shown that that is the opinion held on all sides of the House. I believe that sooner or later we have to tackle the problem of the mining industry from an entirely different angle from that proposed in this Bill. The hon. Member for Abertillery (Mr. Daggar) gave some interesting figures. This problem is not confined to the four Special Areas; it exists in most mining districts in the country. In South and West Yorkshire, for instance, there has since 1930 been a decline in underground wage earners of no fewer than 27,000. In the country as a whole, there has been a decline of no fewer than 120,000. Although we are living in a so-called period of boom in trade, it has only resulted in employing 1,800 more wage earners in 1936 than in 1935.

We have to tackle this problem in two ways. First, there must be a reduction in the hours of work, not merely in mining, but in all industries. If the Government and their spokesmen at Geneva would adopt a different attitude towards the reduction of working hours, they would perhaps do something towards remedying the defects in our industrial situation. When they talk so glibly about depression in industry and then go to Geneva and oppose essential reforms, they are guilty of hypocrisy. If we had a six-hour working day in the mining industry it would allow some of the men now unemployed to get back to work. It is argued by employers that the costs of production will not permit a reduction of hours. I venture to say, however, that if in the mining industry we were to get down to the problem, if we tackled the problem of distribution, we could reduce the working hours and employ a larger number of people, and it need not unduly increase the price of coal to the consumer.

Major Braithwaite

Does the hon. Member know of any unemployed miners in South or West Yorkshire?

Mr. Smith

If the hon. and gallant Gentleman were not a Yorkshireman I would perhaps answer him rather bluntly. I have been in the constituency this weekend and have talked to a good many. If the hon. and gallant Gentleman can tell me where there is work for unemployed miners at straight and above-board wages and conditions, I will put unemployed miners on to him. Why should we try to whittle down this problem? To talk as if there is no unemployment in the mining industry is either to tell a deliberate lie or to have one's eyes closed. The other question we have to tackle sooner or later is that of retiring pensions. Our Dominions can give the House a lesson or two about this question. In Australia they have a non-contributory old age pension of 19s. a week at 65 years for men and 60 for women. In New Zealand, where Labour is in power and where they do not talk Socialism, but carry it out, they have an old age pension scheme of nearly 25s. a week at 65 years for men and 60 for women. Perhaps it would be a good thing if we permitted the Minister of Labour to tour the Dominions to see what is being done in essential reforms in these outposts of the Empire.

The problem of some of the older unemployed men in these areas is deplorable. If we had a pension scheme at 60 of, say, £1 a week for a man and £1 for his wife, we should not only take these older men off the means test and give them security, but we should attract from the mines many men of 60 and over who would rather have a pension of £2 for 52 weeks a year than go to the pit week after week for 35s. or so a week. If we brought in two or three Bills of this character we should not solve the problem of the Special Areas or the problem of the mining industry, and, as this Amendment says, we call on the Government to bring in big schemes of public work: If private enterprise cannot find a remedy for unemployment and industrial depression, the sooner private enterprise is supplanted by public ownership the better for all concerned.

9.28 p.m.

Sir Reginald Clarry

We all recognise in this House the extremely difficult problem which this is. From my point of view, I think the Minister of Labour and the Government have done very well indeed as far as they have gone. They have not gone far enough, but as far as they have gone they have done all that they could. This is an occasion when an economic dictator could do a great deal more than the head of a democratic Government. But there are other drawbacks to economic dictators which we will not discuss to-night. I want to thank the Government for going as far as they have done, and all I have to say to-night must be regarded as purely friendly criticism. I do not think that we shall make any serious inroads into the unemployment problem, particularly as it relates to the distressed areas, until we are able to do something more than we have done with the export of coal from the exporting areas. That is the hard core of our unemployment problem to-day, and I see nothing helpful in the present Bill. Many times has this matter been discussed. We have all known of it. We recognise that coal is our big asset in this country, and that our exports of coal have been of the greatest possible value in the past from a national point of view.

To-day the fact that these exports have gone down to the minimum which they have and brought about so much unemployment is a factor which should be dealt with promptly. It is not only the employment of the miner which is concerned, but the transport from the mines to the docks and the employment of dockside workers, engineering workers, and shipping generally. It is having a much more far reaching effect than the pure tonnage figures of the decline in exports and I am sorry that the Government have not yet thought fit to give a weapon to the coal industry, a weapon which they have granted to the steel industry, which has used it to the greatest possible effect to the advantage of that industry and of the country generally. Give the coal industry a weapon with which it can find a way into foreign markets. Whether this is done by a direct subsidy or a subsidy on freights I do not mind, but give our coal exporting industry an opportunity to meet competitors on equal terms in foreign markets and see that our negotiators in trade agreements take a definite and—I was going to say an arrogant attitude—but a resolute attitude when dealing with foreign countries about the quantities of coal we should be entitled to export to those countries in exchange for the privilege of our market. We shall never see the back of our unemployment problem broken until we see a rehabilitation of our export of coal.

Sir John Haslam

Would the hon. Member apply the same doctrine to the British Dominions? I think that he will agree that there is a problem in dealing with countries like India in regard to the cotton trade if not the coal trade.

Sir R. Clarry

I am dealing particularly with the Special Areas and the hard core trouble is the export of coal.

Sir J. Haslam

The hard core in Lancashire is cotton.

Sir R. Clarry

I am quite prepared to admit that.

Sir Percy Harris

Subsidise the lot.

Sir R. Clarry

I do not think that we are as resolute as we are entitled to be in negotiating with foreign countries, and I apply that to cotton as well as coal. We should take into consideration our own interests first as well as those of our Dominions. I would like to see some definite effort made to give the coal industry a weapon to fight for foreign and Dominion markets. I have suggested in this House on more than one occasion how it could be done.

Another omission from the Bill which is also very serious is the question, referred to by the right hon. Member for Hillhead (Sir R. Home), of the exploitation and development of the production of oil from coal. Here we have a situation in which we are spending millions on imported oil whereas we have an ideal fuel which is not fully used in this country, and men ready to work that coal. I know that it is not quite on an economic basis. There is a big discrepancy in the two fuels, probably about 7d. a gallon. But when you take the whole problem, with its national aspects of defence, employment, independence, it is a matter which should receive much closer attention from the Government than it has done to-day. We are very backward in the matter of research and investigation. As my right hon. Friend said, certain processes have been developed in Germany, for instance, which have been thought sufficiently well of to be purchased by South Africa, France and Japan. Japan is in very much the same position as we are. We have not taken up the kind of research which would warrant us going in for that process ourselves, but if we were not prepared to do the work surely we are prepared to pay for the brains and experience of other countries, and give the system a trial in this country. We might very usefully employ several million pounds in setting up a trial unit for the production of oil from coal. The experiment at Billingham is not a Government experiment. I think I am right in saying they have not put any money into it, but have merely created a favourable atmosphere by giving a preference to the oil in the matter of the Excise Duties. They have not exploited oil from coal in this country to date, except in the grading stations—they have not gone in for any large-scale undertakings.

Mr. Shinwell

We have done a good deal of research, and, in point of fact, the purely technical side of the matter no longer presents any difficulty, it is the commercial side which is the problem. There was a scheme which involved an expenditure of between £100,000 and £150,000 for which the State was fully responsible, and it has "gone west."

Sir R. Clarry

Where has the State spent a large sum of money on the full-scale development of oil from coal?

Mr. Shinwell

It spent between £100,000 and £150,000 at Richmond, under the auspices of the Gas Light and Coke Company.

Sir R. Clarry

I happen to know something about that. It was not an experiment in producing oil from coal. It was a low-temperature proposition. That is not the sort of proposition I am talking about. I am speaking about the direct development of oil from coal without unnecessary subsidiary residues—either by hydrogenation or by water gas or by any other means. In any case the experiment at Richmond is nearly 10 years old. Research has moved a good way since then, and I am sorry that the hon. Member has not moved with it. I am very glad to see that he is defending the Government for something, but I regret that he has not been able to convince me, for I say definitely that the Government have not spent any considerable sum of money in research into methods of producing oil from coal, and I shall be glad to hear the Minister correct me if I am wrong. I only deal with that as a point of friendly criticism.

There is one other point I wish to bring forward, and in doing so I do not say that the Government are entirely responsible in this case, and I merely refer to it as a contributory factor in maintaining derelict and distressed areas. The point is that key men in industries in the distressed areas are leaving their homes to take work in engineering shops and factories in other areas, where they are getting good wages. Those key men by leaving the distressed areas, are leaving the factories there, and the 9 or 10 men who may be dependent upon them individually as key men, permanently without any possibility of finding employment. I do not know what the Government can do in this matter, and I do not necessarily blame them for the situation which has been produced, but it is one which will have to be dealt with before very long. In a large number of cases there are 300 or 400 men waiting for employment, but the key men, numbering perhaps no more than a dozen or 20, have left the area to work in neighbouring towns, and that prevents those 300 or 400 men finding employment. I should be glad if the Minister would direct his mind to seeing whether anything can be done to retain key men in distressed areas pending the time when work will again be available, not only for them but for the men dependent upon them. For the mercies as they are in this Bill I am grateful to the Government, but I do think that something, and a great deal more, should be done, and that there should be no feeling of complacency in any part of the House or, particularly, on the part of the Government.

9.40 p.m.

Mr. Stephen

I feel that not only the Government but the Members supporting the Government do not come out of this Debate at all well. There has been practically no enthusiasm for this Bill, even on the other side of the House. The speech of the hon. Member for Newport (Sir R. Clarry) was fairly characteristic, though in his closing sentence he did thank the Government for the small mercies that are contained in the Bill. A desperate problem is facing the people in the depressed areas, and all that the Government are able to offer them is this pitifully small Measure. When the Under-Secretary of State for Scotland was introducing the Bill he said that the Government recognised that it was not a solution of the problem, that it was only some- thing incidental; he said the whole policy and programme of the Government were really being directed towards a solution of the problem, and that this was only a small matter. As a matter of fact there is as much hopelessness and despair in the Special Areas to-day as there ever has been.

There is this to be said, that owing to various causes this Government has been very much luckier than Governments which have preceded it, though luckier only from a limited point of view. The difficult international situation has resulted in tremendously increased armament programmes in this and other countries, and that has produced a comparative boom, and so from the point of view of employment the Government has been lucky, though from the point of view of the international situation and the possible consequences of war in the future it has probably been an unlucky Government. In spite of the comparative boom, however, we have these areas, in which there are thousands of people, still in a distressed condition, and this Measure is all the Government is able to offer them. The Government have told us about the development of factories in one area which will provide employment for about 200 people, and in another area there is the possibility of developments finding work for about 2,000 people. That was all—and that is all there is in it. I believe that when the people in those districts realise that this great strong National Government is able to offer them only the pitiful little mercies of this Bill, they will feel a still greater sense of despair.

I wish to draw attention to the demand which supporters of the Government make for subsidies, for example, with regard to the export of coal. When an hon. Member was seeking to impress that demand upon the Government, I noticed that there was an intervention by one of his colleagues, who also supports the National Government, putting in a plea for a subsidy for the textile industry of Lancashire. There are demands from all over the House for subsidies for one industry after another. I wonder whether hon. Members realise that those demands are a confession of lack of faith in the capitalist economic system, and mean that they have lost faith in the possibility of working the capitalist economic system unless the Government are prepared, by taxing certain industries, to help other industries which are in a difficult position. I suggest that those hon. Members should go the whole way, and realise that we have to deal with the problem not simply by providing subsidies, but by reorganising the whole of our industries on the basis of national ownership and control. Otherwise there will be merely a patchwork, and existing problems will only be made worse. We have to deal with the question on a national basis, and to take into account all the industries and the people with them, in a properly organised national economy.

The Bill is one of the most pitiful and miserable abortions that have ever been brought into the House. Funny Measures have been brought forward by various Governments in the past. When the Commissioners were being set up, the spokesman from this bench said that we were not going to make any effort to try to extend the Special Areas so as to take in our divisions, because we had no faith in what was expected to result from the setting up of the Commissioners. Experience has shown how right that attitude was and how little the areas have obtained from the setting up of the Commissioners. It has meant only that the people of those areas have been buoyed up with false hopes. It is as though a person had a deep-rooted cancer, and the Minister of Labour went into Boots the Cash Chemists, and bought a penny mustard leaf, and, offering it to the person said, "Put that on! It will not cure you, but it will keep you going." The present proposal trifles with a most serious problem.

The Government have no assurance as to how long the present boom will last and what will be the position of the Special Areas when the boom passes. That applies to other parts of the country as well. I believe that an intelligent Government should be seeking now to deal adequately with the problem, and should be looking forward to the future when there will not be all this silly nonsense about war and when the nations will be living together in peace. The Government should be seeking to provide a national economy which will enable the people of the country to live a decent life. The Government have done many shameful things, but I believe that the bringing of this Measure before the House as a measure of help to the Special Areas is in keeping with those shameful things. It is one more added to the infamies of the National Government.

9.52 p.m.

Mr. Maclean

The Under-Secretary of State said that we might be disappointed with the Bill and consider it inadequate. We consider that it means very little to the areas to which he held out such high hopes. The Bill has been called S.A.R.A. for short; I think that this infant, when it has been in operation for a very little time, will be loved as little as her elder sister D.O.R.A. It will be quite as ineffective for bettering the condition of people concerned as any other of the Measures brought in by the present Government. We consider the Bill inadequate in the sense that it embodies no definite plan for the reorganisation of industry, which we consider to be absolutely necessary if the question is to be tackled in a strong manner.

Take the industries which are there today. The Bill is to be carried on for two years. What hope is there for any industrialist who goes into a Special Area and opens an industry? What hope has he of continuity of policy on the part of the Government which brings this Bill in only for a matter of two years. I should like to ask what plan there is in the two-year programme of the Government? If the Government go out in two years and there is a break-up of the National Government from election day, as there was with another Coalition, and if the Government come back into power again as a diehard Tory Government, what is to prevent that Government from scrapping the whole scheme when it comes to the end of its tether? The present Government are not so diehard as diehard Tory Governments have been in the past. Some of us have good cause to recollect some of the Bills which those Governments have passed.

I would like to know why it is that the Government are not tackling this question in a proper manner. They seem to forget that we live in times that are altogether changed as compared with, say, 19 years ago, when the Great War ended. Industry has undergone a complete revolution. Shipbuilding, which is one of the main industries in my constituency, has been revolutionised to such an extent that one of the warships the contract for which has been placed on the Clyde is to be an all-welded ship. There is to be no riveting together of the plates, and platers, riveters and all the other ancillary trades will be practically wiped out of existence so far as the building of that ship is concerned. How many men will thereby be thrown out of employment?

I hope the Minister will give this matter his attention, because, if he cares to do so, he can get very valuable information by making a comparison. If he finds out, from the yard where this all-welded warship is to be built, how many fewer men it will take to build that ship than it would have taken to build a ship of similar tonnage 15 or 20 years ago, he will find out how much displacement of labour there has been in the shipyards on the Clyde and in other parts of the country. The same thing is happening in other industries. Practically every industry in the country has been reorganised, and the position will not be affected by opening up a factory here, or a little shop there, employing a few hands here, 200 or 300 in another place, or even 1,000 or 2,000 in a third, when there are scores of thousands for whom there is no place in industry to-day owing to the revolution that has taken place in their industries.

Again, the craftsmen in the yards on the Clyde or the Tyne, who have been employed for years in the building of ships, are proud of their craft. When I saw one of these ships being launched the other day, I noticed the pride that was taken in the creation that was slipping down into the water, not only by the men themselves, but by their wives, who came tripping into the yard to watch the results of the craftsmanship of their husbands going down the slip into the river. One finds, however, that when these men have been out of employment, as many of them have, for two or three years, their power of craftsmanship diminishes, and, when they come back to wield their tools in the building of a ship, before many hours their fingers are bleeding from the use of the tools to which formerly they were accustomed and which they could handle, not only with ease, but with the greatest of skill. It will take them weeks to recover the old skill that their fingers had in following the eye and brain, and employers to-day cannot afford the two or three weeks' time that is necessary for one of these long-unemployed men to work himself in and become fit again to exercise his skill. That is one of the reasons why we hear the cry that at 45 and 50 men who have been unemployed for three or four years are too old for employment in their own industry. Consequently, the problem is far wider and deeper than this puny Bill attempts to deal with; it does not touch that problem. Unless this Government or some other Government that follows it is prepared to tackle the problem and plan ahead for years, this country will be in the throes of unemployment to such an extent that the whole country will become one Special Area.

The Government are so exceedingly proud of the country and of the Empire that Glasgow is not considered to be a depressed or distressed area, and, consequently, is ruled out from the provisions of this Bill with the exception of one sentence in Clause 5. Although, however, Glasgow is the second city of the Empire, it has the largest number of unemployed of any city in the country, and until a few months ago it maintained the largest number of people on Poor Law relief. And yet it is not regarded as a distressed area. Why? Because the prestige of the British Empire would be lowered if its second city were declared to be a distressed area. The result is that contracts which used in the normal manner to go to Glasgow, before there was any idea of distressed areas or unemployment such as we have to-day, are being given to firms in London, of all places, and the Cabinet, when I complained about it, had to pass a Minute that Glasgow, for the purpose of Government contracts, was to be considered in the same manner as a distressed area. They bring us in in a roundabout way, but we cannot be a distressed area, and so we are shut out of any benefit from this Bill. According to the Minister of Labour and the Government we are the Cinderella of the towns. The Minister will not deny that a few months ago we had the largest number of unemployed of any city in the country, or that at the present time we have the largest number of people—unemployed people mainly, and their dependants—on Poor Law relief, because they cannot go to the Unemployment Assistance Board.

I will give some figures. In the county of London, which gets contracts that are not being sent to distressed areas or to an area like Glasgow, which should be regarded as a distressed area, the number of insured persons from 16 to 64 is 1,497,207, and, of these, the males unemployed are 8.6 per cent., and the females 4.9 per cent., or a total of 7.3 per cent. In Glasgow, the numbers on the registers are 67,041 males, 14,907 females, and 5,856 juveniles, or a total of 87,804. Two years ago we had the heaviest roll of unemployment of any city of our size, and we have a larger percentage of unemployment than London, but London is the district that gets the contracts which are taken away from Glasgow. Hon. Members will agree that that is something which ought to be righted at once, more particularly when it is known that these are contracts which came in the normal course long before even the Great War and were executed by firms in Glasgow evidently to the satisfaction of the Government.

Consider the figures of poor relief. In the county of London the indoor poor number 26,274, outdoor 90,496, total 116,770. That is in a population of between 4,000,000 and 5,000,000. In Glasgow the indoor poor number 4,838, outdoor 152,429, total 157,267. That is in a city of 1,000,000. Take Birmingham, where there are 4,405 indoor poor, 14,831 outdoor, a total of 19,336. There they are quite happy. There is no occasion to classify Birmingham as a Special Area, because there they are evidently getting along with their light industries. Among the Special Areas in Scotland, there is one formed in Dumbartonshire, running down to the shores of Loch Lomond. It takes in Helensburgh, one of the residential towns on the shores of the Firth of Clyde. Ben Lomond is in a distressed area. Even the sheep grazing on its sides are feeding in a distressed area, but they feed very well, yet the whole county, in which there are some large houses, including a residence of the Duke of Montrose, is classified as a distressed area. I ask the Government, what are they going to do with Scotland? What are they going to do with Glasgow? No less than £12,000,000 has been spent on poor relief in 10 years in Glasgow. There in certain classes of houses rates are included in the rent and the unemployed man receiving assistance or benefit, paying his rent and rates, helps to maintain himself and others out of his rates.

This Bill is a mockery. It is endeavouring to make the unemployed believe that the Government by appointing those Commissioners is appointing men with powers to do something that will bring relief, bring back employment and satisfactory conditions for the workers and their families. The Government know, in view of the inadequacy of this Bill, that they cannot do anything to stop unemployment. It has been said that rearmament is giving employment to thousands of people. True, but is not that fictitious employment? What if the nations come together again in a disarmament conference and decide that there shall be no more armaments? Thousands of workers will be again thrown out of employment; more Special Areas will be created, and the Government will be at its wits' end to know what to do. Stark ruin will be confronting many of the smaller trades-people because of the unemployment and the inability of the people to purchase the things they need.

Russia was derided when it began its five year plans. The derision was not so strong when it completed the first five years. Why do not the Government look long enough ahead and bring people within reach of permanent and steady employment? Why do not the Government go ahead in that fashion? Because they have not the ideas to carry out a programme of that kind. With them it is a case of trying to make things satisfactory for the moment. Not a Member of the Government, not even the young Tories who look on themselves as followers of Disraeli, understand the need of a proper social policy. The only right policy is that of national ownership and control, under which unemployment can be brought down to the lowest ebb. The Government should urge in the League of Nations a reduction in the hours of labour in this and other countries, and the scheme under which those who are old in industry may be withdrawn.

I know quite well that the Government think that we on the Clyde should be thankful for what they have done for the Clyde in the way of orders given for rearmament, but the orders would not have been placed there if the nation had not been getting good value for money. A Clyde-built ship is generally looked upon as being equal to Ai at Lloyds. But there have been already too many shipyards closed—six within the last 10 years. The hon. Member for Partick (Mr. Young) will remember when he and I joined with others in an agitation to prevent the closing down of one of the yards in the neighbouring constituency of Hillhead.

This is a Bill of seven Clauses, each less operative than the preceding one and none of them effective. I challenge anyone on the Front Bench to tell us, with any degree of confidence in what he is saying, the effects that are likely to accrue to the people in the areas to which the Bill is supposed to apply. I hope the Minister is going to give us some indication of what are the Government's proposals, apart from this Bill. We are not satisfied with it. Time and again it has been stated to be inadequate. Every Bill brought in by the Government will be inadequate which does not contain provisions likely to deal adequately with the unemployed, and the only way we can deal adequately with the unemployed is to bring in a system which will do away with unemployment altogether by taking over the industries of the country and controlling them for the country. That is the only solution that will suit us. When that is done, there will be no need for classifying certain districts as Special Areas, no need for bringing in Bills and nicknaming them S.A.R.A., no need for trying to make the people of the country believe that we are dealing with them in a satisfactory manner, building up their hopes and breaking them when the Bill becomes operative and they find out how little is being done for them. This Government will then have passed out of existence and another Government will be sitting there, I hope very shortly, which will have power to do the things which we on this side want to have done.

10.18 p.m.

The Minister of Labour (Mr. Ernest Brown)

I said on the Report stage of the Financial Resolution that that Debate was one of the most interesting to which I had listened on this often discussed subject. I would say to the hon. Member who made the comparison about the interest of the Debate on the export of horses that the comparison, surely is not a fair one at all. That dealt with a particular issue for the first time in recent years, and we are now discussing a subject which has been discussed many scores of times. There certainly is no relation between the real feeling about this great problem as compared with that much smaller problem. I said that the Debate on the Financial Resolution was interesting because for the first time I detected in all parts of the House an atmosphere of hope about some of these areas—not all, but some of them. To-day the hon. Member for Chester-le-Street (Mr. Lawson) admitted frankly that there had been a great deal of improvement in some of the Special Areas.

Mr. Lawson

I said frankly that there had been some improvement in some parts of the Special Areas.

Mr. Brown

I am quite content to leave it at that. What was said from the Front Opposition Bench is the more remarkable because it is the first time we have had it from that bench during the whole course of the Debates on this subject. The Debate as a whole to-day has confirmed the trend of opinion which I had detected, of hope about the problem in these areas. The second thing that has been confirmed in to-day's Debate, as compared with those we have had previously, is the admission that the Bill itself was designed undoubtedly to meet a real need, and, indeed, more than one Member of the House, so far from taking the view of my hon. Friend the Member for Stockton (Mr. H. Macmillan), that it deals with the problem in a minor way, has taken the view that we have been so drastic in our proposals for inducing new industries to go to Special Areas that we might be doing damage to other parts of the country by setting up what was called by one hon. Member in the Debate unfair competition with areas outside the Special Areas.

Whatever may be said about comprehensive and broad views—and I am always interested to hear these questions referred to in terms of abstract benevolence—I generally find, whether I listen to speeches in terms of abstract benevolence, or study resolutions in terms of abstract benevolence, or watch Amendments on the Order Paper in abstract terms, the speeches about them are generally vague, broad and comprehensive, but the practical suggestions that arise out of the speeches are not in proportion to the comprehensiveness of the terms either of the Resolutions, Amendments or the speeches. [HON. MEMBERS: "No!"] That is my opinion about them when Members of the House like the hon. Member for Govan (Mr. Maclean) suggest what can be done by a broad, comprehensive and sweeping plan, and by looking ahead.

We see that with the discussion of the problem before us is bound up another problem which has arisen in the coal industry and in other great industries and especially in the heavy industries, namely, the results upon employment of trade improvements. When they talk about these comprehensive plans in their sweeping way, the answer is that, if their plans were adopted, there would be no technical improvement or alteration in the design of ships, or, in respect of coal mines, there would be no mechanisation underground. Hon. Members might in this Debate have come a little nearer to the realities of the situation. The hon. Member states quite accurately that in a number of areas like his, and the constituency for which I have the honour to sit in this House, there has been technical improvement, but it is not enough to do that and then to say, "Let us have some future extensive plan and look far ahead, and leave it with the suggestion that, if they had that broad comprehensive, sweeping organisation under national ownership and control, there would be no effect of technical improvement on employment in particular places. Surely, the plans they are thinking about cannot carry with them as a corollary that everything is to be static in terms of craftsmanship or technical improvements in industry. It seems to me that the hon. Member showed the whole weakness of the Amendment on the Order Paper, for while the Amendment calls for plans, broad, comprehensive and sweeping, the fact is that some of the speeches delivered in support of it tended to produce the impression on my mind that the hon. Members themselves had not faced the implications of the situation for which the Government have the responsibility to-day. Let me go from ships to coal.

Mr. Maclean

Is it not the case that the Government have had months to draft this Bill, whereas we have had only 20 minutes in which to make our speeches?

Mr. Brown

The issue was raised in the sharpest possible form by the speech of the hon. Member for Govan, and I think the House will agree that I am entitled to call attention to the difference between his plea about the technical improvement in shipbuilding and its effect on the heavy industries on the Clyde and elsewhere, and his bold declaration, in vague terms, that what was wanted was a comprehensive plan. He might have gone further and pointed out that the technical improvement in ships has not merely had its effect on welding and other processes but in the use of fuels.

References have been made to the export of coal. The problem of bunkers in ships for coal is almost as important for these areas as the problem of the actual export of coal. We have to face the fact that, whatever view we take, we are confronted with technical improvements making necessary great adaptations in industry not merely in regard to coal but in all the heavy industries, with the results that were shown in the impressive figures that were given by the hon. Member for Abertillery (Mr. Daggar). The House knows that we are now nearly up to the daily production level of 1929, taking the whole country, of 5,000,000 tons, but whereas in 1929 some 932,000 miners were giving us that daily yield, according to the latest figure of 20th March nearly the same yield is given by 771,000 men on the colliery books. That fact shows that this problem is not a problem which can be solved merely by talking about vague plans. The Bill is a real answer to the problem of those areas, because it is not as the hon. Member for Stockton said, a minor Measure but a major Measure. The Commissioner made that necessity clear. In his second and third reports he said that the attraction of new industries to these areas was a major matter of policy, and it is because this Bill does deal with inducements to achieve that end that it has received a welcome in this House and in the country. The House realises the potentialities that are contained within its frame.

There was some discussion about figures between the Under-Secretary of State for Scotland and the hon. Member for Chester-le-Street. Let me take the matter a little further. The hon. Member for Chester-le-Street overlooked one fact about the improvement in the Special Areas; 120,000 is the total figure of reduced unemployment, according to the Register, since 1934 in the Special Areas, and 20,000 is the net decrease in the insured population in those areas. The total transfers, voluntary as well as statutory, amounted in two years to 60,000, and it seems to me that the hon. Member and other hon. Members have overlooked the fact that side by side with transference there has also been a large number of new entrants into industry because of the natural increase in the population. I would not like to give a hard-and-fast figure, but in my opinion, I should say that the increase in new entrants into industry is roughly equal to the number of transfers, that is, about 60,000. Therefore, when my hon. Friend said that there were about 80,000 new jobs found in these areas he was rather understating than overstating the case. I put the figure at 100,000.

Mr. Lawson

What is the basis of the right hon. Gentleman's calculation? I follow, as he knows, the figures, the additions as well as the subtractions, and I do not know what basis he has for his figure.

Mr. Brown

We have two sets of figures upon which our calculations are based—the weekly returns at the Employment Exchanges and the annual exchange books in July, and both sets of figures have to be taken into account in making our calculations. That is why I prefer not to give a firm figure, but that is my opinion, and I think the Under-Secretary rather understated the facts of the case.

I think the hon. Member for Chester-le-Street did an injustice to the Statutory Committee when he suggested that they said that the Defence programme was mainly responsible for the improvement in the Special Areas.

Mr. Lawson

Mainly, but not wholly.

Mr. Brown

Let me read to the House what the Statutory Committee said: The Defence programme has come in to reinforce the later stages of a general recovery. How much of the recent decline in unemployment is due to this special factor and how much to general recovery is hard to say, but it seems improbable that the Defence programme, in view of its recent adoption, can yet have exercised more than a part of its ultimate total effect, and if that is so the Defence programme may be expected to sustain employment for some time to come. I can find no justification for the statement of the hon. Member that he had the authority of the committee for saying that the Defence programme was mainly responsible for the improvement. Indeed, that is not the case because the general improvement in industrial conditions brought about by the general policy of the Government since it first took office has had something to do with that improvement.

There are one or two smaller points in connection with the Bill itself with which I must deal. There is a point in regard to Clause 4, put to me by the hon. Member for Merthyr Tydvil (Mr. S. O. Davies) in a letter which I will have looked into, and also a point put by the hon. Member for Chester-le-Street. I think there is some misunderstanding here. The point in Clause 4 is that the Bill gives the Commissioners new powers to make grants towards the repair or improvement of certain streets which are certified by the Minister of Transport as being mainly required for purposes other than through traffic. That is the point put by the hon. Member for Chester-le-Street. The point raised by the hon. Member for Merthyr is quite different, and I understand has nothing whatever to do with the Bill. It relates to the exercise of the Commissioners' present powers in respect of private streets not yet taken over by a local authority. I cannot give the hon. Member an answer now but I will have his letter looked into.

Mr. S. O. Davies

I also referred to streets that had been taken over by the local authorities. Obviously for the last 13 years the Merthyr Tydvil local authority has had no money to devote to the maintenance of its streets.

Mr. Brown

I have said that I will have that point looked into. One or two points have been made concerning figures, and during the speech of the hon. Member for King's Norton (Mr. Cartland) there was some discussion about the figures for juvenile unemployment. I understand that the hon. Member was not quoting the total figures for juvenile unemployment. I have obtained them, and they are as follows: On 22nd February—according to the Ministry of Labour Gazette—there were unemployed 45,535 boys, and 49,985 girls. I understand that the figure of 10,000 unemployed boys which the hon. Member for King's Norton gave to the House was for unemployed insured juveniles under 16—the exact figures are 9,937 boys and 12,206 girls. The hon. Member for North-West Camberwell (Major Guest) asked for additional facilities for training labour for new factories in the Special Areas. I assure him that the Ministry of Labour is establishing a number of non-residential centres in the Special Areas and is prepared to assist in the establishment of new industries in those areas by helping, in appropriate cases, to train the unemployed for local employment.

The hon. Member for Northern Cumberland (Mr. W. Roberts) asked about new industries in Cumberland. I would point out to him that the articles of association of the West Cumberland Industrial Sites Development Company, Limited, have already been drafted, that the work of the company is being pressed forward, and that he can look forward with some confidence to the new industries which he desires in that particular area, for, as the House knows, the purpose of this Bill is to attract new industries to the Special Areas.

I wish the hon. Member had verified the story he told about an unemployed man who had been transferred. In telling that story he threw some doubt on the value of the great work that is being done by the Ministry of Labour in assisting men to obtain jobs in other parts when they have no jobs in their own district. He did not verify that story.

Mr. W. Roberts

My point in telling that story was not whether it was true or not, but that that impression exists among men who have been, or are likely to be, transferred. I was suggesting a method by which that sort of difficulty might be overcome.

Mr. Brown

It was with that in mind that I raised the matter. Surely, if an hon. Member tells an unverified story of that kind, it spreads suspicion over the widest possible area. I ask the hon. Member to see his informant again, to get the facts, the name, and the employment exchange area; and I assure him that I will then have the matter looked into. The suspicion is unfounded, for we do everything in our power to see that the men are well settled when they are transferred.

In the earlier part of the Debate, I was asked by the hon. Member for Govan about the figures for field drainage in Scotland. They are as follows: in 1934–35, the amount available was £8,150, and the amount spent was £7,364; in 1935–36, the amount available was £9,000, and the amount spent £8,035; and in 1936–37 the amount available was £9,000, and the amount likely to be spent is £8,000. That is a special problem, as I informed the House on the Committee stage of the Financial Resolution.

The major issue in the Debate has turned, not on the Bill itself but on the Measures which various hon. Members would desire to have in conjunction with or in addition to the Bill, and I would like to refer to one or two of the suggestions made. First, my right hon. Friend the Member for Hillhead (Sir R. Horne) raised the question of aid for the export trade in coal. My right hon. Friend himself was connected with a committee which put in a report and made representations to the Government on this matter. The question was remitted to the joint consultative committee of mineowners and miners for discussion, and, as I informed the House during the Committee stage of the Financial Resolution—and I have nothing to add to what I then said—they have for the moment left the matter in abeyance. If they have, for reasons which seemed good to them, left the matter in abeyance, I think the House will agree that we also should be wise to leave it there.

The hon. Member for Newport (Sir R. Clarry) referred to the question of research into methods of obtaining oil from coal. So far from Government research with regard to fuel being behind that of the rest of the world, this country has everything of which to be proud in the work which is being done in the very fine research station at Greenwich in regard to the use of all types of fuel and the derivatives of coal. [HON. MEMBERS: "What about results?"] Let me say a word about the results. The House will remember that I was responsible, as Secretary for Mines, on behalf of this Government for a Bill called the Hydrocarbon Oils Bill, the aim of which was to make it possible for those who were concerned either as holding patents or in other ways, to develop the production of oil from coal in this country. The point is often overlooked that many of these patents are the property of individuals, some in this country and some elsewhere. The basis of that Bill was a substantial preference. At the moment it is 8d. per gallon and the average basis is 4d. for 10 years. That is a substantial aid to those who are engaged in the development of the low temperature carbonisation process or the process which is going to be established in South Wales, in addition to the process to which my right hon. Friend the Member for Hillhead referred and that very big experiment which is now taking place at Billingham in regard to hydrogenation. [HON. MEMBERS: "Still an experiment."] It is still an experiment, and of course it is much easier to make broad comprehensive general statements about these matters than to work them out in detail, to apply them commercially and make them a success in operation in a great industrial country like this.

Mr. Edwards

The right hon. Gentleman has claimed that we are ahead in research, but are we not well behind in other respects? Is it not the case that Imperial Chemical Industries say that this is no longer an experiment as far as they are concerned, but is long past the experimental stage, and is it not time that the Government were aware of that fact?

Mr. J. Griffiths

Will the right hon. Gentleman give the House a comparison between what is being done in this country in regard to the extraction of oil from coal and what is being done in Germany? Is it not the case that 48 per cent. of Germany's oil requirements are now being met by the extraction of oil from coal?

Mr. Brown

I should not be prepared to accept that statement. On the point raised by the hon. Member for East Middlesbrough (Mr. Edwards), he told the House that he was informed by the heads of the undertaking which is running the great experiment at Billingham, that it had been commercially successful.

Mr. Edwards

That they were making money.

Mr. Brown

Then the answer surely is that, if they are making money, the preference which is being given by the Government ought to be sufficient to allow them to extend it as and when they desire, and wherever they desire.

Mr. Edwards

It is no good hedging this point. It is a matter of importance, not only to the Ministry of Labour, but to the nation. The point is whether the Government are going to encourage the production of more oil from coal by the hydrogenation process. The I.C.I. will not continue to develop Billingham when they are told by the Government that it is too vulnerable.

Mr. Brown

That is not the point put by the hon. Member in his speech. The point was a purely economic one, which was new to me. He said he had been told by some authoritative person in the industry that they were making money, and I am making the fair retort that if that be so, the present Act gives them a preference and there is nothing to prevent them extending the process in any part of the country. I am not able to inform the House in anything like so optimistic terms. All I can do is to repeat that both that process and the process referred to by my right hon. Friend are having the most active consideration and that there will be no avoidable delay in coming to a decision about it. It is quite simple to deal in a general way with this question, but it is much better to give adequate and detailed consideration to these processes before unwise steps are taken, and grave losses incurred, and high hopes destroyed. The hon. Member said that we should make it comprehensive. That, of course, is the theme of the Amendment.

The Amendment seeks to imply that the Government have done nothing to revive the industrial life of the country and that they have no national plan for industry. In the sense that the hon. Gentleman who moved the Amendment and his colleagues mean, the Government certainly have no doctrinaire plan for a new industrial world. What the Government have planned and carried through since 1931 is a policy not merely designed to secure financial stability and confidence, but to get the indispensable conditions for industrial prosperity under any plan; and they have done it with so great a success that the bulk of the Debate has turned, when members have been discussing rearmament, not on this Bill or on the present employment situation, but on what may happen in two, three or four years' time. That is an excellent example of the bankruptcy of argument on the part of the Opposition in face of the facts as they are.

Let me give the House one or two facts which show that what my right hon. Friend the Member for Hillhead said was true. My right hon. Friend in half-a-dozen sentences summed up half-a-dozen direct ways in which the Government have helped these areas. I would like to ask the House in thinking about plans for five years to consider these facts about five years. Compare March, 1932, with March, 1937. During that period the number of insured workpeople in employment rose from 9,517,000 to 11,242,000, an increase of 1,750,000. The number of registered unemployed dropped from 2,567,000 to 1,601,000, a decrease of over 966,000. Broadly speaking, therefore, during the five years March, 1932, to March, 1937, the revival of industry under the National Government not only absorbed 1,000,000 unemployed but found work for 750,000 new entrants. The hon. Member for East Islington (Miss Cazalet) asked about an analysis. We have been giving close attention to detailed analyses of the figures in recent months, and here the point about the elderly men is one that stands out in any analysis of the figures, especially in the Special Areas. I would like to look more closely at the gross figures. Of the 2,567,000 there were 422,676 in 1932 temporarily stood off or temporarily stopped, 102,212 were persons normally in casual employment, and 2,000,000 were wholly unemployed. By March, 1937, the number of temporarily stopped had fallen by 255,000, a decrease of 60 per cent. The number of those normally in casual employment had fallen by 74,000, a drop of 27½ per cent. The number of wholly unemployed had fallen by 683,000, a decrease of 33 per cent. This is surely a good record—not of abstract concessions, not of theoretical planning, but practical achievement, actual results throughout the whole country increasing the purchasing power of the country.

Mr. Stephen

Preparation for war.

Mr. Brown

I would like to go one step further. There is another aspect of the matter to which far too little attention is normally paid by those who talk about the total figures as if they were one picture. There are few people who consciously realise when they speak of 1,600,000 unemployed that they include people who are unemployed for one day and people who are unemployed for a year or more—in some cases unfortunately three or four years. In March, 1932, out of a total roughly of 2,300,000 claimants for benefits 1,236,000, or 54 per cent., had been out of work for less than three months, 343,000 for three months or more but less than six months, and 348,000 for 12 months or more. By March, 1937, the under three months group had dropped to 760,000, a decrease of nearly 40 per cent.; the next group had dropped to 170,000, a decrease of 50 per cent.; and even in the last group, the group most affecting the Special Areas the reduction had been a reduction to 290,000, or 16 per cent.

All who look at the figures in that way will realise that what the Government have been doing is to pursue a deliberate and consistent policy which is now bringing its results, and I venture to say that when this Bill becomes law, as I have no doubt it will, the provisions contained in it both for the areas inside the Special Areas Act and those outside it will provide the real beginnings of the answer to the question, What are you going to do about the areas where heavy unemployment is now being relieved because there is temporary work on rearmament? The answer is within the four corners of this Bill. The answer is that the Government have deliberately started to tilt the balance in favour of certain areas, and the proof that this policy is likely to be effective is clear not only from the Debates in the House but from the letters, and even telegrams, which I have received as Minister of Labour from other areas which are not likely to come within the ambit of this Bill. They do not regard this as a niggling little Measure, but think that the magnet of relief from rates, taxes and rent may be so powerful an attraction that it may actually mean unfair competition with industries in their areas which do not get the benefit of the terms under this Bill. [Interruption.] I have had four or five telegrams to-day—I had one from Tees-side—one of them a very long telegram, costing a great deal of money to send, indicating evidently that they regarded this as a matter of very great importance.

The Amendment is couched in abstract terms because hon. Members opposite know that the Government have succeeded in other parts of the country and have succeeded in the Special Areas, and that the effects of this Bill will present them with a better case in every Debate on this issue which we have in the House. The Government have every reason to congratulate themselves to-day, and I have very little doubt that those who have been talking in abstract terms during this Debate will be among the first in their constituencies to seek the concrete benefits which will flow from them.

Mr. G. Griffiths

I should like the Minister to explain the meaning of the words

"by reason of general depression in those industries."

which occur in Clause 5 of the Bill. What is the meaning of that expression?

Mr. Brown

I will answer that question by referring the hon. Member to the very clear statement made on that point by my right hon. Friend the Chancellor of the Exchequer on the Committee stage of the Financial Resolution.

Mr. Griffiths

It was as clear as mud.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 219; Noes, 150.

Division No. 127.]	AYES.	[11.0 p.m.
Acland-Troyte, Lt.-Col. G. J.	Crossley, A. C.	Hudson, Capt. A. U. M. (Hack., N.)
Adams, S. V. T. (Leeds, W.)	Cruddas, Col. B.	Hudson, R. S. (Southport)
Agnew, Lieut.-Comdr. P. G.	Culverwell, C. T.	Hume, Sir G. H.
Amory, Rt. Hon. L. C. M. S.	Davidson, Rt. Hon. Sir J. C. C.	Hunter, T.
Anderson, Sir A. Garrett (C. of Ldn.)	Davies, Major Sir G. F. (Yeovil)	Inskip, Rt. Hon. Sir T. W. H.
Anstruther-Gray, W. J.	Dawson, Sir P.	James, Wing-Commander A. W. H.
Aske, Sir R. W.	Denman, Hon. R. D.	Jarvis, Sir J. J.
Assheton, R.	Dorman-Smith, Major R. H.	Jones, L. (Swansea W.)
Astor, Viscountess (Plymouth, Sutton)	Dower, Capt. A. V. G.	Keeling, E. H.
Astor, Hon. W. W. (Fulham, E.)	Drewe, C.	Kerr, Colonel C. I. (Montrose)
Atholl, Duchess of	Duckworth, Arthur (Shrewsbury)	Kerr, J. Graham (Scottish Univs.)
Baillie, Sir A. W. M.	Dugdale, Major T. L.	Lamb, Sir J. Q.
Baldwin, Rt. Han. Stanley	Duggan, H. J.	Leckie, J. A.
Balfour, Capt. H. H. (Isle of Thanel)	Duncan, J. A. L.	Leech, Dr. J. W.
Balniel, Lord	Dunglass, Lord	Lees-Jones, J.
Beamish, Rear-Admiral T. P. H.	Eastwood, J. F.	Leighton, Major B. E. P.
Bernays, R. H.	Edge, Sir W.	Levy, T.
Birchall, Sir J. D.	Ellis, Sir G.	Liddall, W. S.
Bossom, A. C.	Elliston, Capt. G. S.	Lindsay, K. M.
Boulton, W. W.	Elmley, Viscount	Llewellin, Lieut.-Col. J. J.
Bowater, Col. Sir T. Vansittart	Emery, J. F.	Lloyd, G. W.
Bower, Comdr. R. T.	Emmott, C. E. G. C.	Locker-Lampson, Comdr. D. S.
Bowyer, Capt. Sir G. E. W.	Entwistle, Sir C. F.	Lumley, Capt. L. R.
Boyce, H. Leslie	Erskine-Hill, A. G.	Lyons, A. M.
Braithwaite, Major A. N.	Evans, Capt. A. (Cardiff, S.)	Mabane, W. (Huddersfield)
Brown, Col. D. C. (Hexham)	Findlay, Sir E.	Macdonald, Capt. P. (Isle of Wight)
Brown, Rt. Hon. E. (Leith)	Fleming, E. L.	McEwen, Capt. J. H. F.
Brown, Brig.-Gen. H. C. (Newbury)	Fremantle, Sir F. E.	McKie, J. H.
Bull, B. B.	Furness, S. N.	Maclay, Hon. J. P.
Bullock, Capt. M.	Fyfe, D. P. M.	Magnay, T.
Burghley, Lord	Ganzoni, Sir J.	Maitland, A.
Butler, R, A.	Gibson, C. G. (Pudsey and Otley)	Makins, Brig.-Gen. E.
Campbell, Sir E. T.	Gilmour, Lt.-Col. Rt. Hon. Sir J.	Manningham-Buller, Sir M.
Cartland, J. R. H.	Glyn, Major Sir R. G. C.	Margesson, Capt. Rt. Hon. H. D. R.
Carver, Major W. H.	Grant-Ferris, R.	Mason, Lt.-Col. Hon. G. K. M.
Cary, R. A.	Greene, W. P. C.(Worcester)	Mayhew, Lt.-Col. J.
Castlereagh, Viscount	Gridley, Sir A. B.	Mailer, Sir R. J. (Mitcham)
Cayzer, Sir C. W. (City of Chester)	Grimston, R. V.	Mellor, Sir J. S. P. (Tamworth)
Cazalet, Thelma (Islington, E.)	Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)	Mills, Sir F. (Leyton, E.)
Cazalet, Capt. V. A. (Chippenham)	Guinness, T. L. E. B.	Mills, Major J. D. (New Forest)
Chamberlain, Rt. Hn. N. (Edgb't'n)	Gunston, Capt. D. W.	Mitchell, H. (Brentford and Chiswick)
Carry, Sir Reginald	Guy, J C. M.	Moore, Lieut.-Col. T. C. H.
Cobb, Captain E. C. (Preston)	Harbord, A.	Moreing, A. C.
Colfox, Major W. P.	Hartington, Marquess of	Morgan, R. H.
Colman, N. C. D.	Haslam, Sir J. (Bolton)	Morris-Jones, Sir Henry
Colville, Lt.-Col. Rt. Hon. D. J.	Heilgers, Captain F. F. A.	Morrison, G. A. (Scottish Univ's.)
Cooke, J. D. (Hammersmith, S.)	Heneage, Lieut.-Colonel A. P.	Morrison, Rt. Hon. W. S. (Cirencester)
Cooper, Rt. Hn. A. Duff (W'st'r S.G'gs)	Hepworth, J.	Munro, P.
Cooper, Rt. Hn. T. M. (E'nburgh, W.)	Herbert, Capt. Sir S. (Abbey)	Nail, Sir
Courtauld, Major J. S.	Hoare, Rt. Hon. Sir S.	Neven-Spence, Major B. H. H.
Critchley, A.	Holmes, J. S.	Nicholson, G. (Farnham)
Croft, Brig.-Gen. Sir H. Page	Hope, Captain Hon. A. O. J.	Nicolson, Hon. H. G.
Crookshank, Capt. H. F. C.	Hopkinson, A.	O'Neill, Major Rt. Hon. Sir Hugh
Cross, R. H	Home, Rt. Hon. Sir R. S.	Orr-Ewing, I. L.
Patrick, C. M.	Scott, Lord William	Train, Sir J.
Peat, C. U.	Shakespeare, G. H.	Tryon, Major Rt. Hon. G. C.
Penny, Sir G.	Shaw, Captain W. T. (Forfar)	Turton, R. H.
Peters, Dr. S. J.	Shepperson, Sir E. W.	Walker-Smith, Sir J.
Ponsonby, Col. C. E.	Shute, Colonel Sir J. J.	Wallace, Capt. Rt. Hon. Euan
Ramsbotham, H.	Simon, Rt. Hon. Sir J. A.	Ward, Irene M. B. (Wallsend)
Ramsden, Sir E.	Smith, Bracewell (Dulwich)	Wardlaw-Milne, Sir J. S.
Rankin, Sir R.	Smith, L. W. (Hallam)	Warrander, Sir V.
Rathbone, J. R, (Bodmin)	Somervell, Sir D. B. (Crewe)	Waterhouse, Captain C.
Reid, W. Allan (Derby)	Southby, Commander A. R. J.	Watt, G. S. H.
Remer, J. R.	Stanley, Rt. Hon. Lord (Fylde)	Wayland, Sir W. A
Rickards, G. W. (Skipton)	Stanley, Rt. Hon. Oliver (W'm'l'd)	Wedderburn, H. J. S.
Robinson, J. R. (Blackpool)	Stewart, J. Henderson(Fife, E.)	Wells, S. R.
Ropner, Colonel L.	Storey, S.	Williams, H.G. (Croydon, S.)
Ross Taylor, W. (Woodbridge)	Stourton, Major Hon. J. J.	Wragg, H.
Rowlands, G.	Strauss, E. A. (Southwark, N.)	Wright, Squadron-Leader J. A. C.
Russell, A. West (Tynemouth)	Strauss, H. G. (Norwich)	Young, A. S. L. (Partick)
Salmon, Sir I.	Sueter, Rear-Admiral Sir M. F.
Samuel, M. R. A.	Tate, Mavis C.	TELLERS FOR THE AYES.—
Sanderson, Sir F. B.	Taylor, C. S. (Eastbourne)	Lieut.-Colonel Sir A. Lambert
		Ward and Sir James Blindell.
NOES.
Acland, R. T. D. (Barnstaple)	Grenfell, D. R.	Pritt, D. N.
Adams, D. (Consett)	Griffith, F. Kingsley (M'ddl'sbro, W.)	Quibell, D. J. K.
Adams, D. M. (Poplar, S.)	Griffiths, G. A. (Hemsworth)	Rathbone, Eleanor (English Univ's.)
Adamson, W. M.	Griffiths, J.(Llanelly)	Richards, R. (Wrexham)
Alexander, Rt. Hon. A. V. (H'lsbr.)	Groves, T. E.	Ridley, G.
Ammon, C. G.	Hall, G. H. (Aberdare)	Riley, B.
Anderson, F. (Whitehaven)	Hall, J. H. (Whitechapel)	Ritson, J.
Attlee, Rt. Hon. C. R.	Hardie, G. D.	Roberts, W. (Cumberland, N.)
Banfield, J. W.	Harris, Sir P. A.	Robinson, W. A. (St. Helens)
Barnes, A. J.	Harvey, T. E. (Eng. Univ's.)	Rothschild, J. A. de
Barr, J.	Henderson, A. (Kingswinford)	Rowson, G.
Batey, J.	Henderson, J. (Ardwick)	Salter, Dr. A. (Bermondsey)
Bellenger, F. J.	Henderson, T. (Tradeston)	Sanders, W. S.
Benn, Rt. Hon. W. W.	Holdsworth, H.	Seely, Sir H. M.
Bevan, A,	Jagger, J.	Sexton, T. M.
Broad, F. A.	Jenkins, A. (Pontypool)	Shinwell, E.
Bromfield, W.	Jenkins, Sir W. (Neath)	Short, A.
Brown, C. (Mansfield)	Johnston, Rt. Hon. T.	Silverman, S. S.
Buchanan, G.	Jones, A. C. (Shipley)	Simpson, F. B.
Burke, W. A.	Jones, H. Haydn (Merioneth)	Sinclair, Rt. Hon. Sir A. (C'thn's)
Cape, T.	Kelly, W. T.	Smith, Ben (Rotherhithe)
Charleton, H. C.	Kennedy, Rt. Hon. T.	Smith, E. (Stoke)
Chater, D.	Kirby, B. V.	Smith, Rt. Hon. H. B. Lees- (K'ly)
Cluse, W. S.	Lathan, G.	Smith, T. (Normanton)
Clynes, Rt. Hon. J. R.	Lawson, J. J.	Sorensen, R. W.
Cocks, F. S.	Leach, W.	Stephen, C.
Cove, W. G.	Lee, F.	Stewart, W. J. (H'ght'n-le-Sp'ng)
Cripps, Hon. Sir Stafford	Leonard, W.	Strauss, G. R. (Lambeth, N.)
Daggar, G.	Leslie, J. R.	Taylor, R. J. (Morpeth)
Dalton, H.	Logan, D. G.	Thurtle, E.
Davidson, J. J. (Maryhill)	Lunn, W.	Tinker, J. J.
Davies, R. J. (Westhoughton)	Macdonald, G. (Ince)	Viant, S. P.
Davies, S. O. (Merthyr)	McEntee, V. La T.	Walkden, A. G.
Day, H.	McGhee, H. G.	Walker, J.
Debbie, W.	McGovern, J.	Watkins, F. C.
Dunn, E.(Rother Valley)	Maclean, N.	Watson, W. McL.
Ede, J. C.	Macmillan, H. (Stockton-on-Tees)	Welsh, J. C.
Edwards, A. (Middlesbrough E.)	Mainwaring, W. H.	Westwood, J.
Edwards, Sir C. (Bedwellty)	Maxton, J.	White, H. Graham
Evans, D. O. (Cardigan)	Messer, F.	Whiteley, W.
Fletcher, Lt.-Comdr. R. T. H.	Montague, F.	Wilkinson, Ellen
Foot, D. M.	Morrison, R. C. (Tottenham, N.)	Williams, D. (Swansea, E.)
Frankel, D.	Muff, G.	Williams, E. J. (Ogmore)
Gallacher, W.	Naylor, T. E.	Williams, T. (Don Valley)
Gardner, B. W.	Noel-Baker, P. J.	Wilson, C. H. (Attercliffe)
George, Major G. Lloyd (Pembroke)	Oliver, G. H.	Windsor, W. (Hull, C.)
George, Megan Lloyd(Anglesey)	Paling, W.	Woods, G. S. (Finsbury)
Gibbins, J.	Parker, J.	Young, Sir R. (Newton)
Gibson, R. (Greenock)	Parkinson, J. A.
Green, W. H. (Deptford)	Potts, J.
Greenwood, Rt. Hon. A.	Price, M. P.	TELLERS FOR THE NOES.—
		Mr. Mathers and Mr. John.

Bill read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[Captain Margesson.]