CLAUSE 5.—(Financial assistance for provision of factories in certain other areas.)

HC Deb 22 April 1937 vol 322 cc2173-225

7.40 a.m.

Mr. R. Acland

I beg to move, in page 2, line 34, after the word "providing," to insert the words "a factory or."

This Amendment is put down to safeguard the position of the single factory in the small areas. Is it covered?

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

I think I can reassure the hon. Gentleman. I do not propose at the present moment to go into the merits of a case specifically restricted to one factory. The position is covered.

Amendment, by leave, withdrawn.

7.42 a.m.

Mr. Acland

I beg to move, in page 3, line 18, at the end, to insert: and any area to which the Minister directs that this section shall apply shall be deemed to have been added to the areas specified in the First Schedule to the principal Act for all purposes save that government assistance of the kinds contemplated by the principal Act and by this Act shall be given in such areas in accordance with the terms of this section and of section six of this Act and not otherwise. This may be called the Nuffield Trustees Enabling Amendment, and as such I invite the Committee to give it very serious consideration.

There has been throughout all the Debates one point on which we have all been almost unanimous—and it is a terrible pity that the Special Areas Act extends only to such new areas. There was nearly a revolt in the Party opposite on facilities to extend the areas, and something should be done outside the Special Areas under Schedule 1 to the Act of 1934.

Something is done by Sections 5 and 6, however little; but I have put down this Amendment in the hope that something more can be done in these areas outside the Special Areas. For the purpose I ask the co-operation and support of all parties in the Committee.

I wrote to the Nuffield Trustees to ask the position, and this is part of the reply: The Trust is to adopt any measures which may, in the judgment of the Trustees, tend or conduce to the economic elevation of the Special Areas. For the purpose of the Deed, Special Areas are defined as areas specified in the First Schedule to the Act of 1934, including anything added thereto by any amending or modifying Act. Therefore, it became obvious to me that if we could add the certified areas to the Act of 1934 the Nuffield Trust Deed would apply to them. But an Amendment stopping short there would be out of order, and in order not to increase the charge I was forced to word this Amendment in this somewhat obscure way: Any area to which the Minister directs that this section shall apply shall be deemed… That is to achieve my purpose. The remainder is to put it in order. It puts me in order because it does not increase the charge. It simply means that for Government purposes the only assistance to be given in those areas is in accordance with Sections 5 and 6 and not otherwise; but that for all other purposes certified areas are to be reckoned as if they had been added to the First Schedule of the Act of 1934 by an amending Act. The question will naturally arise, what do the Nuffield Trustees themselves think of this Amendment? I wish to make it clear that I have not moved this on their advice or suggestion or, indeed, with their approval. But I informed them that I was moving this Amendment and their reply says: I will bring your Amendment to the notice of the Trustees; but I cannot think of the ground they could have to take exception to your putting forward your Amendment or to any decision that it may be wise to reach upon it. Therefore the Committee is free to make up its mind one way or the other whether the Nuffield Trustees shall be given a chance of operating in the areas which may become certified areas from time to time. I would ask Ministers to allow the Committee to decide this on principle, and, if there are technical errors, not to defeat the Amendment on technicalities which would be put right with the good-will and co-operation of Government advisers in another place having regard to the arguments for and against the proposition that the Nuffield Trustees should be given an opportunity of operating within these certified areas. The first thing which comes to my mind is, Why should they not? They are not compelled to act if they do not think fit. If nobody puts up an attractive proposition they will do nothing. Some people might say, "Why squander the money of the Nuffield Trustees? Why not get all the money of the Nuffield Trustees to the areas where unemployment is worst?" That would be a valid reason if it were true to say that in every case the worst unemployment was to be found in the distressed areas. Moreover, by the terms of Clause 5 of the Bill it will be impossible for any area to become certified which ought not morally to be a Special Area, because no area will become certified unless it has had severe unemployment for a considerable time, and unless someone is satisfied that without financial assistance it cannot recover and that it has been dependent on one or two industries. Therefore, no area is going to become a certified area which is not in fact a Special Area in everything except name.

I hope that the Amendment will make an appeal to those hon. Members whose constituencies are depressed but are not scheduled as Special Areas, and I hope that it will make an appeal also to hon. Members for those constituencies which, though not distressed as a whole, have within their boundaries those little pockets of unemployment which are a deplorable feature of so much of our countryside. One cannot quite divorce one's mind from considerations of conditions in one's own constituency, and I cannot help thinking of the little port in North Devon with the picturesque name of Appledore. The Special Areas impose themselves upon us by the sheer magnitude of their misery, though to those who have to live there I do not think there is much difference between them and one of these distressed villages. The work is gone from these little places, and there is the same hopelessness and the same despair. As to the hon. Members who represent Special Areas, the considerations must be rather different and I must make them a rather different appeal. I appeal to their sense of fair play, and no-one will think that I am exaggerating the effect which the Special Areas (Amendment) Act will have. I believe that in the distressed areas, because of the activity of the Commissioner under these Acts, there is a feeling that somebody representing this great nation cares and that there is someone to whom they can go for advice and encouragement, but in these great constituencies—Glasgow, Middlesbrough and others—which ought to be Special Areas but are not, and in these little pockets of unemployment scattered about the country, we feel that we are forgotten and nobody cares at all and that nothing is ever going to be done. As long as unemployment was treated as one great problem throughout the country we felt that we were part of it and that Government effort was in part being directed towards us. Now that we have these Special Areas, and we are left out, it seems that the whole attention of the Government is being diverted to the Special Areas and nobody cares for those little areas where the problem is every bit as great to the people who happen to live in them.

In the Nuffield Trustees we have a great instrument. I use the word "great." I do not want to exaggerate or glorify private charity, but I think the Nuffield Trustees deserve the word "great." Of course, it is not "great" in relation to what might be done by Governments, but it really is a considerable size in comparison with what is done by Governments. Therefore, we appeal to the representatives of the distressed areas. We are not asking for the whole of the Nuffield Trustees' money, but we ask for hope that somewhere there will be an organisation to which we can go, and, if we put up an attractive proposition, may receive some assistance. I appeal to all sides of the Committee. This is an absolutely nonparty matter. No political principle is involved. Rather, I would say that it is an all-party matter, because Members of all parties have already expressed their desire for something to be done for areas outside the Special Areas, and I do hope that the Government will not feel frightened that if this Amendment goes through we shall get the whole of a Report stage.

7.59 a.m.

The Chairman

Before I put this Amendment I ought to tell the Committee what I told the hon. Member himself. I had made up my mind not to select it because I thought that either it did nothing or, if it did anything, it changed the charge. Then the hon. Member was good enough to explain to me the intention, which was apparently to describe other areas as Special Areas for the purposes of a special trustee of which, officially, this Committee and I know nothing. Whether it achieves that object or not I cannot say, but I think there will be a doubt whether this Amendment would do what apparently it purports to do and prevent these areas coming within the definition of Special Areas for the purpose of grants under the original Act, because the hon. Member says they shall be deemed to have been added to the Special Areas for all purposes save Government assistance, leaving out certain words: shall be given in accordance with the terms of this section and not otherwise. What "in accordance with the terms of this Section" means I have not the slightest idea, unless it means that they are to be Special Areas. In the circumstances, I am prepared to put the Amendment to the Committee in order that the matter may be discussed, at any rate, up to a certain point; but if I put it to the Committee it must be with the reservation that I have some doubt whether or not it is in order.

Mr. Cartland

What is there to prevent the Nuffield Trust deeds being altered so that the Trust may include within its terms a certified area, so as to bring these into the Bill?

Mr. Acland

It would be a very difficult process, I understand, because whereas an ordinary agreement between the hon. Member and myself could be altered by mutual agreement in the case of a trust deed there are further parties to it than the person who is giving the money or who has been made trustee. There are the people for whose benefit the trust is intended, and I am told it would mean going to court. It would probably be possible with only great difficulty to collect the beneficiaries together.

8.4 a.m.

Mr. J. Griffiths

I represent a division which is in exactly the same position as the one referred to by the hon. Member for Barnstaple (Mr. Acland). I feel in some doubt and difficulty about this Amendment. I am not clear in my own mind how Clause 5 is going to work. It refers to certain certified areas, and in order to be certified these areas must conform to certain conditions which are laid down. The provision makes it very evident that there are areas which have become Special Areas since the 1934 Act was passed. At that time they were excluded by the Commissioner because he had to be satisfied that the amount and length of unemployment was such as to justify them being described as Special Areas. Now the Minister has brought in this new Clause because, since 1934, and particularly during the last twelve or eighteen months, representations have been made to the Government that there are areas which have no hope of recovery unless there is outside assistance, and that those areas have neither the resources, nor the finances, nor any hope of being able to recover without outside assistance. They must have some kind of assistance which, so far, has not been extended to them.

The Chairman

I think what the hon. Member is saying now will come better on the Question, "That the Clause stand part," and not on this particular Amendment.

Mr. Griffiths

I will limit myself on this point. That is why I would support the Amendment. There is provision in Clause 5 for the setting up of a site company. Unless some such body as the Nuffield Trustees provide the initia- tive and the money, who else is there? But I will deal with that point on the question, "That the Clause stand part."

8.6 a.m.

Lieut.-Colonel Colville

I quite recognise the hon. Member's anxiety to know more about the Clause. As to the point raised by the hon. Member for Barnstaple (Mr. Acland), this is the position as I see it: The Nuffield Trust was established at a time when there were certain scheduled Special Areas, and the trustees said they would be willing to operate in these areas and in others which might be scheduled, but since that date there have come into being, or are to come into being, some which were not Special Areas but are Certified Areas. I do not feel it would be right for Parliament to pass the Amendment simply in order to bring the Nuffield Trustees to operate in these areas. That must be a matter for the Nuffield Trustees themselves to decide. I quite realise that it might mean that they would have to take certain steps to get their declaration of trust altered, but I do urge the Committee to consider the view which the Government hold, that it would not be proper for Parliament to pass the Amendment for the purpose of bringing the Nuffield Trustees to operate in an area, having in view that this is a new development for the certification of areas. If the Nuffield Trustees wish to operate in these new certified areas, it would be proper for them to consider that question and to take the necessary steps if they so desire. For these reasons I do not feel we can accept the Amendment, apart from the question of charges, which I have not entered upon.

8.8 a.m.

Sir S. Cripps

As regards what the right hon. Gentleman has just said, I do not think he has quite put the matter in its right perspective. This will not compel the Nuffield Trustees to do anything at all; all it would mean is that it would widen the area of their own permissive powers. They would be perfectly at liberty to say, "We will not spend a shilling in these certified areas," but, if they want to, it would enable them, without the very complicated and difficult procedure of the courts, to get their area extended into a certified area. It is not a very simple thing to get the area of a trust altered. There generally has to be some very good reason. The Attorney-General, as a rule, opposes such a thing, especially with a recently-made trust of this kind, where there is contemplated in the trust deed an Amendment of the Schedules by a subsequent Act. That is already contemplated in the trust deed, and on the question of extending it beyond that area into these certified areas it would be extremely difficult for the trustees to get that permission from the courts if Parliament, having had this before them, had said, "We do not propose to do anything to help in that respect. That is a matter which can be brought up in the courts with arguments." If there were some such Amendment as this—I am not suggesting that there should be these precise words—were decided upon, it could be done by a specific Clause saying that the Nuffield Trust shall extend to these areas, without raising any question such as charges.

As regards the question of increasing the field of the trust there would be no difficulty about a special Clause to say that the Nuffield Trust shall extend to these areas. You can always alter trusts by Act of Parliament if you want to. I suggest that the Government should not take a final view on this matter until they have had an opportunity of going a little bit further into it. The Attorney-General could be of great assistance, because he is the guardian of charity in the courts of the country. He could say what attitude he would take up if this matter came before the courts. But, unfortunately, we have not had the Opportunity of having any of the Law Officers here during the whole of this Debate, which really is a serious matter. I am not raising a debating point. We have had any number of points of law raised, and we have not had any assistance from any legal Member of the Government. I do ask the right hon. Gentleman to hold up his decision on this matter until consultation has taken place, because I believe that what hon. Gentlemen opposite would like, as well as hon. Members here, is that by some means or another the Nuffield Trust should have the possibility of dealing with these certified areas, and it would, I think, meet the views of all parties if that could be accomplished by putting a special Section in this Act in another place rather than leaving it to a very difficult position in the courts.

Lieut.-Colonel Colville

I am perfectly prepared to consider what the hon. and learned Gentleman has said in relation to the Nuffield Trust. What I do say is that this is hardly the proper way of dealing with it. We are perfectly prepared to consider the matter, but we do not feel that the amendment would be the proper way of dealing with it.

Mr. Acland

Does that mean that the Government will make an approach to the trustees to find out what are their views on this matter; or will they leave it to the Nuffield Trustees to take the initiative? I may withdraw the Amendment if the right hon. and gallant Gentleman can assure me that he will take the initiative in raising this point and finding out their views.

The Chairman

I think I can help the hon. Member, because I have now come definitely to the conclusion that I must rule the Amendment out of Order. The discussion may, perhaps, have achieved the hon. Member's object so far as can be. What I want to point out to the Committee is that, not only is it at least arguable that the Amendment does not exclude these certified areas from becoming beneficiaries under the principal Act as Special Areas, but, now that attention has been drawn to the question of the Nuffield Trust, it means that this would be legislation of a kind which would make it necessary for the Clause to be referred to the Examiners and for the Bill to become a hybrid Bill.

8.12 a.m.

Mr. Pritt

On a point of Order. May I make this submission? If there is in existence a trust which say, that, when the Government, by Schedule or otherwise, stamps certain areas, surely you are not legislating in the trust, or for the trust, or about the trust if you simply go about your own business of doing what the trustees thought you might be going to do. If Parliament simply chooses to say that another county, or borough, or half of a county, shall now become part of a Special Area in any one of 50 different ways so far as machinery is concerned, surely Parliament is at liberty to legislate like that, and the only thing that happens to the trust deed is that, when you construe it, the trust deed then applies to the wider areas in such trust deed. Surely that is not legislation that involves hybrid Bill procedure?

The Chairman

But for his closing words, I was going to say that the hon. and learned Member was quite correct. There is nothing to prevent Parliament from legislating in such a way as he suggests, but Parliament by its rules can only carry that legislation according to certain forms, and that would mean that this particular provision would have to go before the Examiners and would have to undergo the procedure of Private Bill legislation before it could be brought before a Committee of the House.

Mr. Pritt

Surely, you are ruling there, Sir Dennis, that, because somebody has made a trust deed, it becomes impossible for Parliament by its normal procedure to say that something else which was not a Special Area yesterday shall be a Special Area to-morrow. Surely, the mere extent of a trust deed cannot deprive us, according to our. Standing Orders, of the right to legislate by special Act. I know that we practically belong to the great financiers, but surely not to that extent.

The Chairman

Fortunately, what I have to do is, not to legislate in any way, but to give a Ruling on a particular case that is before me at the present moment; and, after the discussion that has taken place, there can be no doubt here that this would be a case which would have to be referred to the Examiners.

Mr. Pritt

Do I understand your Ruling to be that it is out of Order at any stage of this Bill for Parliament in any form to enact that anything shall become a Special Area which is not now a Special Area?

The Chairman

I think the hon. and learned Gentleman had better allow me to give my Ruling in my own words, which I have done.

8.16 a.m.

Sir S. Cripps

On the point of Order—it is an important point—may I bring this to your attention, Sir Dennis? Parliament is constantly now legislating about giving benefits to certain areas or certain trades or industries. There may be a great number of these interests, commercial and otherwise, which deal with those areas by reference to their definition in an Act of Parliament. It is merely a convenient way, in drafting documents, to refer to one of those areas of businesses and so on, and that has been very often adopted. If it is to be said that, if Parliament alters the definition of any such area or industry, Parliament is interfering with private enterprise, and therefore hybrid Bill procedure must be adopted, we are, I venture to suggest, going to get into very great difficulties indeed in regard to this type of legislation. It may be that there have been people who have made wills in which they have left money to the inhabitants of the Special Areas, and we shall be faced with the position that we shall not be able to legislate about the Special Areas as regards their definition, because the persons who made the wills happened to choose the Parliamentary phrase "Special Area." I do ask that we should not be so fettered in the future, by a Ruling from the Chair, in what may become a very important matter indeed both as regards the Government and private liberties.

8.18 a.m.

The Chairman

The hon. and learned Member now enables me to draw more special attention to what I have already said, namely, that I am ruling on a particular case, and not giving a general Ruling which might be stretched beyond that to cover a number of other cases. Happily, I have the advantage over the hon. and learned Member that I am not only the advocate against him on the issue but I also have the power of deciding it. But, if I may say so, the reason for my Ruling in this particular case lies in this particular paragraph which it is proposed should be put in, and of which I, at any rate, could not understand the object or intention until I made inquiries. Directly I did, I found that it had not a general object or direction in reference to a numerous class of cases, but that it was directed to deal specifically with one particular private interest. In those circumstances it is quite clear that my Ruling would not apply to those cases which the hon. and learned Member mentioned.

8.20 a.m.

Mr. Parkinson

I beg to move, in page 3, to leave out lines 19 to 26.

I notice that, in moving the Second Reading of this Bill, the Minister of Labour did not give any explanation whatever on the point to which this Amendment relates. The Under-Secre- tary of State for Scotland did try to some extent to cover the point. It is a point which is very vague indeed, and I think we have a right to know what this advisory committee means. First of all, it is provided that the Minister of Labour shall appoint an advisory committee to whom he may refer any representations made to him. I listened to the Second Reading speech of the Minister, and I did not hear any reference to this point. The Under-Secretary of State for Scotland in his speech made quite a number of references to the matter. He said in one place: 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."—OFFICIAL REPORT, 6th April, 1937; col. 55, Vol. 322.] If the Committee is appointed by the Treasury, that is all right, because the Treasury will have to find the money. But there is to be another Advisory Committee appointed by the Minister himself. I want to ask the Minister whether he will explain what is meant by this advisory Committee, of which the Under-Secretary said: 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."— [OFFICIAL REPORT, 6th April, 1937; col. 55, Vol. 322.] The Minister has power over any recommendation of the Committee, and, no matter how strong their recommendation may be, the Minister has power to veto it. Then the Under-Secretary went on to say: 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 claims of localities, and the other appointed by the Treasury to advise them as to the amount of assistance to be advanced."—[OFFICIAL REPORT, 6th April, 1937; col. 56, Vol. 322.] And then the Under-Secretary said, I do not know whether it was humorously, that one of the Committees was to relieve the embarrassment of the Minister in making a choice. I do not know why the Minister should be embarrassed. The Under-Secretary says that the other Committee "restrains the parsimony of the Exchequer." The parsimony of the Exchequer in many directions is beyond doubt. I want some information regard- ing the Committee we are dealing with in this Clause. This Committee deals with the certification of districts in which there has been severe unemployment and where assistance is needed.

What is to be the constitution of this Committee? Is the Committee to be composed entirely of men? Is it to be composed of local people in the area in which it is going to act? Will it be composed of people who know the psychology of the area? That would be better than a national committee. If a national committee is appointed, it would have to depend entirely upon what it was told by somebody else. If a Committee were appointed which understood the part of the country in which it operated, it would be able to exercise a greater influence on the Minister and give him better advice on the matter. I want the Minister to make it clear what is meant by this Committee, because the Committe is a very important one, and so long as it has to advise the Minister it has an important duty to perform. The Committee should be given the assistance which can be given to it without penalising the Nuffield Trust or any other. The Minister should deal fairly and squarely with the areas which become certified areas. I want to appeal to the Minister to consider seriously that the Committee should be appointed in connection with the area in which they are to work.

8.27 a.m.

Mr. Gordon Macdonald

We in Lancashire are rather pleased with this section of the Bill. We felt that Lancashire was getting some assistance under the Bill, but the lines we seek to delete created some suspicious. Referring to my own Division, we are quite satisfied with the three provisos laid down. But while we are satisfied we suspect the activities of the Committee. Since the position in Wigan will satisfy the conditions, we do not see why some Advisory Committee should examine the matter, and report to the Minister, and why it should be on their recommendation alone that these areas should receive assistance. We do not think that Lancashire has been treated fairly, but here is an opportunity for some areas to get some benefit. We have some doubts whether if these lines remain in the Bill they will not deprive us of the assistance we have needed sorely for many years.

8.30 a.m.

Mr. T. Smith

It may be convenient if I put a few questions to the Minister now, so that he can reply to them. I should like to ask whether this Sub-section (2) operates when the site company is set up and who initiates the site company. I represent a county in which there are a good many districts suffering from severe unemployment and when the Bill becomes law, they will wish to make applications under it. Take, for instance, Goole. which is suffering very considerably from unemployment. It is one of a number of districts which will possibly ask to be certified when this Bill becomes law. what I want to know is, will Goole be permitted to make representations if a site company has been set up? The second point is, who makes the representations? Will they be made by a local authority, and if made by a local authority, will it be an urban district and not a county council? The West Riding County Council would not be qualified, but if you take a number of urban districts within that county council area I think you will find their weight would warrant them in asking to be certified. I would like the Minister to make it clear whether this Sub-section deals only with site companies to be set up and, if so, how they are to be set up. Will he also define clearly what is the meaning of "an area" and who will have to make representations on its behalf?

With regard to the advisory committee, I am not so hopeful as my hon. Friend who spoke before me. If he expects that Lancashire will receive some considerable benefit from that Sub-section I am inclined to think he will be disappointed. This Sub-section has more alternatives than a cross-word puzzle. I hope the Minister will make these points perfectly clear.

8.35 a.m.

Mr. Shinwell

This Sub-section is the most complicated one in the Bill, and it is very necessary that the right hon. Gentleman should clear up the doubts which have been expressed. May I direct his attention to the first line of Sub-section (2)?

The Chairman

I was very nearly interrupting the hon. Member for Normanton (Mr. T. Smith) on this point. I do not want to go further at the moment than to warn the Committee that questions on the earlier part of Sub-section (2) must come to the Question that the Clause stand part. We are now dealing only with the proviso.

Mr. Shinwell

I was merely directing attention to the words just mentioned for the purpose of illustrating the point I am going to make. If the Minister directs his attention to the beginning of the Subsection he will find the following words: If the Minister of Labour upon representations made to him is satisfied. If representations are to be made to the right hon. Gentleman presumably they will be from interested parties, that is to say, parties who are concerned about conditions in the area. Moreover, the Minister, upon representations made to him, must be satisfied regarding certain conditions. These conditions having been fulfilled, representations having been made and the Minister having satisfied himself regarding the conditions in the Sub-section, why should it be necessary to establish an advisory committee in order to acquaint the Minister with the facts of the case and advise him whether he should proceed? It seems to me that such a committee is redundant. The right hon. Gentleman may be able to convince me and my hon. Friends that there is a more substantial reason for the existence of such a committee, but I am bound to say that on reading the Subsection, and in particular the reference to the advisory committee, that it does not seem at the moment to be necessary.

8.38 a.m.

Mr. E. Brown

I will do what I can to deal with the points that have been raised on this question. The hon. Member for Ince (Mr. G. Macdonald) knows very well that representation were made to the Government in many ways during recent months. Some were from local authorities and some from Members of Parliament, and all kinds of suggestions were made. Most of them were concerned with extending the bounds of the Special Areas. Representations were made recently by Members from Lancashire who suggested that the best way to help their particular area would be by such a proposal as is laid down in this Clause—namely, to help those prepared to clear sites for factories to let them and to give financial assistance. That is the gist of the suggestion. It would have been possible to devise a formula to cover all areas which had a certain percentage of unemployment, but hon. Members who have watched the operation of that kind of formula know that all kinds of hard cases immediately arise just outside it. Also, in a case of this kind, conditions change so much that an area may be inside the formula at one time and out of it again within six months arid we thought that the best and most flexible way, and the reasonable and commonsense test of an area, was to be found by laying down general terms under the three headings in the Clause.

Hon. Members have asked about the site companies. The initial proposals are with the locality; they will come from people in the area who are keen about it, and who think so highly of the local conditions that they desire to form a site company. The normal procedure will be that of a local development council, on which the local authorities are represented. Normally the initiative will come from such a council. Before assistance can be given there must be a reasonable prospect that a responsible and effective site company will be formed and that it will be able to get or to build the necessary factories.

Mr. Dunn

Would the Minister deal with the matter in the light of the Interpretation Clause, because it is coupled with what he is saying.

Mr. Brown

That gives the definition of a site company as: any body corporate established for the purpose specified in subsection (1) of section five of this Act, being a body which does not trade for profit, or a body whereof the constitution forbids the payment of any interest or dividend at a rate exceeding such rate as may be for the time being prescribed by the Treasury. That is what is normally known as a public utility organisation. Let us suppose that the arrangements are under way and people with local initiative desire to take advantage of the Act in order to get industries to come to their areas; they then have to satisfy the Minister that the area ought to be certified by him. The Minister has to make a decision, assisted by a competent national advisory committee which is to be set up. The committee will have the advice of men who are giving their minds to this problem alone, in the light of the local circumstances and the conditions laid down in Clause 5. I cannot say anything about the composition of the committee until the Bill becomes law, except that it will consist of four members. There will be an independent Chairman, an employer, a trade unionist and one other member. We shall see that the interests of Scotland are not overlooked.

Mr. J. Griffiths

And Wales?

Mr. Brown

We will do our best there. That will be the procedure. Surely hon. Members will not want to deprive the areas who desire, after an impartial examination of that kind of work in the conditions of those areas, a general procedure in the light of conditions which are laid down, and which we shall discuss later. I was amused at the speech of the hon. Member for Westhoughton (Mr. Rhys Davies), because I should have thought that an advisory committee would appeal to him, especially when we remember speeches made by him in this House about the Minister setting up Government factories in particular areas and the idea that the Government had shown bias for some political reason. On practical grounds, and in order to assist those who want to do their best for their areas, I assure hon. Members that it is the best thing to have the advice of a committee.

Mr. Shinwell

The right hon. Gentleman has overlooked one point. The powers of the committee are somewhat arbitrary, and in no case can the Minister take the initiative. That seems to present a serious difficulty. The Minister may have sufficient knowledge and information, despite the advice of the committee, to justify proceeding with a scheme. Can he not conceive of circumstances of that kind arising? He has devised this part of the scheme in a most flexible fashion; if he has an Advisory Committee he must accept their advice from time to time, but there might be occasions when he might see fit to disregard it or to take the initiative himself.

Mr. Brown

Even if cases of that kind did arise, they would emphasise the importance of having things clearly understood and on a definite basis, so that the Minister can be fortified by an advisory committee of this kind. The hon. Gentleman must not overlook that the committee are required to consider any instructions which the Minister may give them in considering the circumstances of an area. It does not mean that the Minister is required to lay down beforehand any conditions; that is not the intention. It is to enable the Minister to give instructions as to procedure and as to the factors which he wishes them to take particularly into account in considering the circumstances affecting each area. This answer meets the points made by several hon. Members, and I hope, after my explanation, that the Committee will agree to it without a Division. It is better to have a flexible machine of this kind. The matter is subject to legal interpretation, in the sense that the Minister is bound by it, but it is flexible to operate.

8.50 a.m.

Mr. Tinker

The Bill as it stands has caused us to be suspicious on this particular section. Let us see what it means. In the earlier part of the Clause certain conditions have to be agreed to, and after that we appoint an advisory committee which is to decide whether the area is to be helped or not. That appears to us to be altogether a delaying action. If the conditions are complied with surely the Minister should have power to decide? There is another and more serious point. I do not want to see the powers that ought to be given to Parliament passing away to somebody else. Here is an advisory committee which will determine what is to be done. The Minister will be bound by its decision. According to the Clause he must accept their decision, and when we say to him afterwards "Why is it that Widnes or Westhoughton or other parts of depressed Lancashire are not included in this," he will reply that the advisory committee was set up by Parliament and that he has no control over what is an independent body. If the advisory committee examines a case and decides that it canot be admitted, we have no chance at all to voice our opinions on the Floor of the House of Commons. I think the Minister would be well-advised not to press this part of the Clause. After all, it is we who are asking him to be an effective person. Only this week there has been a deputation from the Labour Party to examine conditions in Lancashire and I expect from their report that the Minister will see the necessity of something being done. When that information is laid before him, and when he has satisfied himself that the case is sufficient for him, to admit, then, according to this Clause, the whole thing has to go to the advisory committee. I do not see any need at all for it, and because of that we are asking the Minister not to include it in the Bill.

8.53 a.m.

Mr. Pritt

I want the Minister to accept this Amendment for several reasons. I have been looking at the Clause very carefully and I cannot see how it can possibly be of any advantage to people seeking to have an area certified as he suggested. If the Minister wants to certify an area on the representations laid before him, let him do it openly. This Advisory Committee can never help him to do it. It can either agree with him, in which case he will do it, or it can disagree with him, in which case he will not; or they can veto it however earnestly the Minister wants it. If the Minister really finds it convenient to have the advisory committee I can well understand it, for it will be an advisory committee to whose advice he shall have regard, but for an important Minister in a problem like this to appoint an advisory committee with the sanction of Parliament is to provide him with one more excuse for doing nothing, when he ought to be doing something. The other objection is, will not all this slovenly procedure, if it is allowed to pass in the Bill, cripple the Act within a year or two? The Minister is given power to appoint the committee. He appoints four people; and having appointed them he cannot appoint any more. I know of no general legislation which gives him any additional power. Once he has appointed that committee he cannot ever get rid of them or accept their resignations. I presume he can disregard them after they are dead, but if one of them dies, are they still the advisory committee he appointed or are they only three-quarters of it? And when the four died or retired, he cannot appoint others under this legislation. I ask the Committee to say that the whole principle is wrong and that in any event the proceeding is disgraceful.

8.56 a.m.

Mr. Stephen

I support the Amendment and I ask the Minister to reconsider this matter. I suggest to him that there is no need for making statutory the appointment of this committee, nor can I see any advantage in it. I can see that there are disadvantages. Suppose the Minister finds after he has appointed his statutory committee of four that the conditions in the district make the four people he has appointed not the people who should advise him with regard to that particular district? He will have got the committee composed, possibly, of individuals with very little knowledge of the district, whereas if he did not make the appointment of the committee a statutory obligation in this way, he might afterwards find that it would be a good thing to appoint committees in different parts of the country. He can do that without taking any such powers, and I submit that is a reasonable position. It will be observed that there are to be two committees one appointed by the Minister of Labour and the other a committee appointed by the Treasury. This Treasury committee will also make recommendations but as far as the advice on local situations is concerned, local individuals would probably do it more satisfactorily. There is one question I want to ask in connection with this proposed advisory committee. If we agree to its appointment, are its members going to be paid? If this Clause is going to be operated in any material way, I take it there will be plenty of work coming to the committee from various parts of the country.

I am wondering what trade unionist is going to be in a position to give all his time to the work of this Committee which is to advise the Minister. It may be possible to get individuals to do this, although as far as I can see they are going to be unpaid. They are not an expense in connection with the Bill, and it appears to me that if the Minister wants people to advise him there is no need for a statutory provision. I hope the Minister will reconsider the Clause because it appears to be quite unnecessary. With regard to the wording, it is provided that the Minister of Labour shall appoint an advisory committee to whom he may refer any representations made to him under this Section. He may, or he may not, refer them. He may consider that it is quite unnecessary, that they have not got a sufficiently good case. If they have a sufficiently good case it must be referred to the committee. Am I right in thinking that if they have a sufficiently good case their application must be referred to the committee under this provision? I would like the Minister to inform the Committee if that is so. In that case the Minister is making a lot of trouble for himself in the future. Suppose his Department regards an application as not very substantial, and he does not send it to this committee, and there are various people in the district, employers and workpeople, who have become interested in the proposal they feel aggrieved. Their application does not go to the committee. There will be ever so much trouble and discontent caused in that way. I cannot see that the Minister is gaining anything by placing this fetter upon himself, and I cannot for the life of me see why the Minister should tie his hands in this way unless he is anxious to get machinery which can be blamed for any lack of action. Perhaps it is contemplated that somebody else will be the shock-absorber. It may be said that it is not very kindly to talk in this way, but I remember a previous experience in connection with trade facilities and in connection with a provision for dealing with unemployment. We were always told when we raised a question that the committee had gone into it but could not see their way to grant the request. Is the Minister here setting up similar machinery? If he wants advice he can get it from any individual without binding himself in this way, and I certainly feel that the Minister on reconsideration should come to the conclusion that this is quite unnecessary.

9.4 a.m.

Mr. Burke

I hope the Minister will accept this Amendment. It has been stated that it comes from Lancashire, and if I may hazard a guess I think it is true also to say that a good deal of this scheme comes from Lancashire. We are paying a tribute to the Minister in asking him to cut out the machinery of the advisory committee and it is not very often we are able to say that we have sufficient confidence in him and his energy to say that we do not need between him and his work some other body. There is an advisory committee for the Treasury which will slow things down to a very considerable extent, and we do not want anything to stand in the way of speed. There is to be a site company also. That I suppose will have to have some consideration in the matter. There is another reason why it is not necessary to have an advisory committee. The Minister knows that in every one of the areas which will seek to be brought under the Bill there is a development council. There is, for instance, a development council in Lancashire. I think there is hardly a single area which might make representation to this body that has not got a development council, a thoroughly representative body of people knowing all about the area, and which can give the Minister all the particulars he wants. People outside Lancashire do not know everything about the problems of Lancashire. What is going to happen about this advisory committee of four persons? They are not going to be four persons drawn from Lancashire. It has already been indicated that one is going to come from Scotland. Some consideration must be given to Wales. I suppose there will be competition for the seat going vacant—the Chairman would, I suppose, be impartial. What likelihood is there that this committee of four persons, drawn from the four quarters of the country, will know as much about the needs of any one particular area as these local development councils themselves? We do suggest very seriously that the Minister should rely upon the advice of people in the localities, who understand and have been studying these problems for a very considerable time, rather than set up a committee which will only complicate the matter.

9.8 a.m.

Mr. Davidson

I would like to join in asking the Minister to reconsider setting up this advisory board. I would point out to the hon. Member who has just spoken that we have also in Scotland a Scottish Development Council representing all sections of industry and local council interests. The Minister knows perfectly well that the Scottish Development Council—I see the Secretary to the Treasury nodding in acquiescence—go very fully into affairs in Scotland, and can give all the advice and guidance that he requires with regard to Scottish questions. Apart from that, I am naturally suspicious, particularly after the House has only recently discussed a Bill increasing the salaries of Members of the Government, and now we find the right hon. Gentleman trying to push some of the work of his Department on to an unpaid advisory committee. I do not think the House can accept any such motion.

With regard to paragraphs (a), (b) and (c) I agree with the wording, because I feel that here is a definite opening for the distressed areas that are not scheduled as distressed areas, such as Glasgow, to have an opportunity for their case to be dealt with; but added to those paragraphs we have the provision which states that the Minister of Labour shall appoint an advisory committee, and I do not think my Scottish colleagues will agree that a national advisory committee on the lines indicated by the right hon. Gentleman could really get down to the poverty and distress problem of Scotland. I am suspicious of any barrier being formed between the local councils and the Minister of Labour himself, because I believe that, despite failures in the past, the continual pressure of local councils is more apt to have an effect on the Minister as an individual than it would have on an advisory committee acting under instructions from the Minister.

As the right hon. Gentleman knows, I have in my hand a complete and definite statement, concisely typewritten, of the distress of Glasgow, containing a plea for Glasgow to be scheduled as a Special Area. That has not been allowed, but here we have a definite statement which tells us of the 87,000 regular unemployed in the second city of the Empire, of the increase, since the present Government came into power, of over 1,000,000 on Poor Law relief in that city, of the 8,000 children in Glasgow receiving free meals as necessitous cases after medical examination, and of the 93,000 children, in an examination of 100,000, certified by medical officers as unfit, all in the second city of the Empire. This concise statement also shows that Glasgow pays 2s. 8d. in the pound as compared with 7d. or 8d. paid by scheduled distressed areas, and that Glasgow is carrying a burden of unemployment and Poor Law relief that amounts to 1,408 per ro,000 persons, the highest rate of any city in the Empire. The right hon. Gentleman asks the House to say that a committee of four shall be appointed, made up of trade unionists, an independent legal gentleman—I suppose we must always have a lawyer—and some other person representing the employers, and that the local authorities shall go to this committee and lay their case before them. This committee, acting on instructions from the Minister, will say what they think ought to be done, and the Minister, in the final analyses, will have the right to say whether or not it shall be done. This is merely a roundabout to get away from the responsibility of the Minister's own problem.

I ask the right hon. Gentleman to accept the Amendment, which is a business Amendment. It means that the right hon. Gentleman's Department will deal with the problems that apply to that Department, and that we shall not put them on to the shoulders of people who cannot understand the problems. I am glad to see the right hon. Gentleman the Secretary of State for War here, because I would point out that if the Minister of Labour forms any more advisory committees, we shall have recommendations pouring into the Government that will completely swamp the Government, different recommendations that the people in the country will not understand and that will be liable to lead to riots in the Special Areas, and the Secretary of State for War will then have to provide the soldiers to quell the riots. It is a dangerous principle to set up all these committees, and I ask the right hon. Gentleman to act like a Scotsman, like a man, and to accept his own responsibility.

9.17 a.m.

Mr. Jenkins

The recommendations in this Clause seem to me to be so definite that the Minister does not need to get the advice of a committee. The right hon. Gentleman will have very considerable difficulty in appointing a committee that will be representative of the Special Areas. We have four Special Areas—Durham, Scotland, Cumberland. and Wales. If I understood the Minister aright, he said he would appoint an independent chairman and three other members of the committee. One will be a representative of the trade unions, one will represent the employers, and one will be a Scotsman.

Mr. E. Brown

I said that there would be representation on the committee for Scotland.

Mr. Jenkins

It may he that the Lord President of the Council will be the independent member of the committee, but, seriously, this is an attempt on the part of the Minister to set up a shock-absorber between his critics in the country and himself.

The Clause states: Provided that the Minister of Labour shall appoint an Advisory Committee to whom he may refer any representations made to him under this section, and shall not direct that this section shall apply to any area unless the committee after considering, in accordance with any instructions given by him, the circumstances affecting the area, recommend that this section should apply to the area. Clearly that is too absurd to be embodied in this Bill, and, after all, the conditions of scheduling an area are simply stated and were stated by the Chancellor of the Exchequer a considerable time ago in this House. They are set out here: that there is, and has been for a considerable time, severe unemployment in the area … that employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment. … There is no committee more capable of deciding those issues than the Minister himself and his Department. He has all the information necesary for making those decisions. If a committee is set up on which there is not adequate representation of every area, difficulties will obviously arise. We have had experience of other committees set up under Special Areas Act, such as the committee for allocation of the trading estate. It has been a case of "pull devil, pull baker" with the members of the committee respecting certain areas: Areas with strong claims, have made representations and difficulties have arisen and difficulties would arise for this committee also. The Minister is handing over to the committee powers and responsibilities which he ought to retain. If the Amendment is not carried and if the committee is set up, then, clearly, each of the Special Areas should have adequate representation. I say without hesitation, that there will be considerable public agitation in Wales if Wales is left without representation. I am opposed to the setting up of such a committee, which will be a buffer between the Minister and criticism but if it is set up, there should be adequate representation for various areas.

9.22 a.m.

Miss Lloyd George

The hon. Member for Pontypool (Mr. Jenkins) said he understood from the Minister that the independent member of the advisory committee would be a Scotsman. The Minister thereupon denied that and said that Scotland would be represented. I am sure the Secretary of State for Scotland would agree that only a Scotsman can represent Scotsmen. He would not be prepared to place the interests of Scotland in the hands of some Anglo-Saxon and on the same analogy, he would agree that only a Welshman can adequately represent Welsh interests. The Minister said it might be difficult to find a Welshman able to represent both my hon. friends from South Wales and myself. I do not think there would be any difficulty. That is the bogy always put up by Ministers who want to deny representation to Wales. The Minister himself has repeatedly emphasised how greatly the problem in South Wales differs from the problem elsewhere. On his own showing, therefore, it is vital to have someone who will represent the interests of Wales. I do not suggest that South Wales or North Wales or my own distressed area of Holyhead, will not be given fair treatment at the hands of the Committee but I say, emphatically, that Wales has not, up to now, had its fair share of the benefits, small as they are, which have been available. I therefore urge the Minister not to be content with saying that he will do his best to see that Wales is represented but to give an undertaking, as in the case of Scotland, that Wales will be represented on the Committee.

9.25 a.m.

Mr. E. Brown

I was not attempting to draw any distinction between North and South Wales but between the districts which are outside and those which are inside the Special Areas. I allowed myself, perhaps, to use an incautious phrase when I referred to the representation of Scotland, but I assure hon. Members that Wales will not be overlooked. I only mentioned Scotland because there is a Commissioner for Scotland and a Commissioner for England and Wales and I wanted to make it clear that on the advisory committee there would be a Scottish representative. There is no point in the forcible speech made by the hon. and learned Member for North Hammer-smith (Mr. Pritt). He drew an almost horrifying picture of what might happen in the case of the death of members of the committee. If the Minister of Labour desires to appoint 5 or 6 or 8 or 10 members, he can do so, but I have chosen the alternative of the smaller body, in order to make sure that the fear expressed by the hon. Member for Leigh (Mr. Tinker)—which I know is sincerely felt—that this would prove to be a delaying body, may not be justified. It will not be a delaying body but a working body and it will facilitate the operation of this part of the Measure, just as the admirable advisory committee in the Overseas Trade Department facilitates the work of export credits. It is possible, for instance, for the Minister to get representations from four or five different localities in the same area and he may desire to have advice upon the best method of procedure in the interest of the localities and of the area as a whole. I am grateful for the confidence shown in me by hon. Members opposite who suggest that this committee should not be set up, but I beg of them to accept my judgment in this matter and to give me my advisory committee.

Mr. Pritt

Suppose that within three months after the appointment of the committee two of them die and two of them resign. How then, under this Clause, can the business be carried on?

9.28 a.m.

Mr. M. MacMillan

Every area, whatever the Minister calls it, is a Special Area in this respect, that each has its own special local features—geographical, economic, industrial and otherwise. The special features of areas must be known best to local people who are acquainted with local conditions. Under our National Scottish Development Council a special sub-committee was formed of people representative of and knowing the Western Isles to get best possible information on the spot and to convey it indirectly to the Secretary of State for Scotland. I was sorry that any sort of National Council should come between that local advisory committee of the people on the islands and the Minister directly responsible for the development of the islands. Only a few weeks ago we were discussing a similar matter to this under the special powers Bill for the taking over to public control of piers and harbours and I advocated nationalisation as part of the transport system of the country. The Secretary of State mentioned then that the local people were bound to know much better than the Minister what the local conditions were with regard to harbours and piers. I agree that they do and much better than any body of people or a Minister representing so many other interests. Let us then apply the Secretary of State's own argument now.

In going through the Highland Areas you cannot get full information at first hand on many matters affecting the people of some localities unless you are able to speak their language. You will not, as an official and a stranger, get them to commit themselves in regard to local conditions, but when you have direct knowledge of the people as their representative you can get the information from them much more frankly than could any stranger going into the area. I believe that that is true of dialect Lancashire, and it is bound to apply still more to Wales. The Secretary of State for Dominions Affairs, for example, represents part of the Highlands not because he knows them but because they do not know him. A local advisory committee of people elected by the district would be far more effective than any body of strangers, however impartial and well selected. We have no pledge or guarantee in the Clause that the Minister will be satisfied by any representations. It is difficult to establish a standard of satisfaction for areas, in each of which the conditions differ from the last and the next. The same person dealing with them, in this case the Minister, cannot possibly bring to bear in each case a full knowledge of local conditions. The problem demands something more than the Minister of Labour or even the Secretary of State for Scotland can be expected to give. If the Minister is not satisfied, a difficult position arises. He must be satisfied according to a standard of his own. He is not compelled to make any recommendations at all.

The Deputy-Chairman

The hon. Gentleman is now getting away from the argument and is speaking on the Question, "that the Clause stand part of the Bill."

Mr. MacMillan

I am sorry if you think I got away from the argument. I was trying on this Clause to deal with the functions of the Advisory Committee. The Minister is apparently to be bound by their advice. In the first place, they have to receive and to deal with any representations which the Minister chooses to make, but there is no guarantee that the Minister will place before the Committee the representations made to him by the people on the spot. The Committee will only have referred to them representations which the Minister may pick out from those which are given to him locally, as he sees fit. Yet the Committee have to act in accordance with instructions given to them by the Minister. Apparently the Committee are faced with the contradiction of having power to bind the Minister and, at the

same time, having their power limited by such representations and instructions as the Minister sees fit to make to them. We are not satisfied that the Minister has cleared up that contradiction, although he tried to do so.

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

The Committee divided: Ayes, 117; Noes, 49.

Division No. 158.]	AYES.	[9.37 a.m.
Adams, S. V. T. (Leeds, W.)	Elliot, Rt. Hon. W. E.	Peake, O.
Agnew, Lieut.-Comdr. P. G.	Elliston, Capt. G. S.	Peat, C. U.
Allen, Lt.-Col. J, Sandeman (B'kn'hd)	Emery, J. F.	Penny, Sir G.
Assheton, R.	Emrys-Evans, P. V.	Perkins, W. R. D.
Baldwin-Webb, Col. J.	Evans, Capt. A. (Cardiff, S.)	Peters, Dr. S. J.
Balniel, Lord	Findlay, Sir E.	Plugge, Capt. L. F.
Barclay-Harvey, Sir C. M.	Fox, Sir G. W. G.	Procter, Major H. A.
Baxter, A. Beverley	Fyfe, D. P. M.	Raikes, H. V. A. M.
Beaumont, Hon. R. E. B. (Portsm'h)	Gibson, C. G. (Pudsey and Otley)	Ramsbotham, H.
Beit, Sir A. L.	Goldie, N. B.	Rankin, Sir R.
Blindell, Sir J.	Grant-Ferris, R.	Rathbone, J. R. (Bodmin)
Boulton, W. W.	Grimston, R. V.	Robinson, J. R. (Blackpool)
Bowater, Col. Sir T. Vansittart	Guinness, T. L. E. B.	Ropner, Colonel L,
Bower, Comdr. R. T.	Gunston, Capt. D. W.	Ross Taylor, W. (Woodbridge)
Bowyer, Capt. Sir G. E. W.	Hamilton, Sir G. C.	Samuel, M. R. A.
Bracken, B.	Hannon, Sir P. J. H.	Sanderson, Sir F. B.
Braithwaite, Major A. N.	Haslam, H. C. (Horncastle)	Savery, Sir Servington
Brass, Sir W.	Haslam, Sir J. (Bolton)	Scott, Lord William
Brown, Rt. Hon. E. (Leith)	Heilgers, Captain F. F. A.	Shakespeare, G. H.
Bull, B. B.	Holmes, J. S.	Shaw, Major P. S. (Wavertree)
Bullock, Capt. M.	Hope, Captain Hon. A. O. J.	Stuart, Hon. J. (Moray and Nairn)
Cartland, J. R. H.	Hopkinson, A.	Sutcliffe, H.
Cary, R. A.	Horsbrugh, Florence	Tate, Mavis C.
Castlereagh, Viscount	Hudson, Capt. A. U. M. (Hack., N.)	Taylor, Vice-Adm. E. A. (Padd., S.)
Channon, H.	Hudson, R. S. (Southport)	Touche, G. C.
Chorlton, A. E. L.	James, Wing-Commander A. W. H.	Tryon, Major Rt. Hon. G. C.
Cobb, Captain E. C. (Preston)	Jarvis, Sir J. J.	Wakefield, W. W.
Colville, Lt.-Col. Rt. Hon. D. J.	Joel, D. J. B.	Ward, Lieut.-Col. Sir A. L. (Hull)
Cooke, J. D. (Hammersmith, S.)	Kerr, J. Graham (Scottish Univs.)	Ward, Irene M. B. (Wallsend)
Cooper, Rt. Hn. A. Duff (W'st'r S.G'gs)	Law, R. K. (Hull, S.W.)	Warrender, Sir V.
Cranborne, Viscount	Loftus, P. C.	Waterhouse, Captain C.
Craven-Ellis, W.	Lyons, A. M.	Watt, G. S. H.
Crooke, J. S.	MacAndrew, Colonel Sir C. G.	Williams, H. G. (Croydon, S.)
Crookshank, Capt. H. F. C	MacDonald, Rt. Hon. M. (Ross)	Wilson, Lt.-Col. Sir A. T. (Hitchin)
Davies, Major Sir G. F. (Yeovil)	McKie, J. H.	Withers, Sir J. J.
Dorman-Smith, Major R. H.	Margesson, Capt. Rt. Hon. H. D. R.	Wood, Rt. Hon. Sir Kingsley
Dower, Capt. A. V. G.	Mayhew, Lt.-Col. J.
Dugdale, Major T, L.	Mellor, Sir J. S. P. (Tamworth)	TELLERS FOR THE AYES.—
Duncan, J. A. L.	Mills, Major J. D. (New Forest)	Commander Southby and Lieut.-
Eastwood, J. F.	Moreing, A. C.	Colonel Llewellin.
Eckersley, P. T.	Ormsby-Gore, Rt. Hon. W. G. A.

NOES.
Acland, R. T, D. (Barnstaple)	Harris, Sir P. A.	Pritt, D. N.
Adams, D. (Consett)	Henderson, J. (Ardwick)	Quibell, D. J. K.
Adamson, W. M.	Jagger, J.	Ritson, J.
Barr, J.	Jenkins, A. (Pontypool)	Seely, Sir H. M.
Batey, J.	Jenkins, Sir W. (Neath)	Shinwell, E.
Brown, C. (Mansfield)	Jones, A. C. (Shipley)	Smith, E. (Stoke)
Burke, W. A.	Kelly, W. T.	Smith, T. (Normanton)
Daggar, G.	Lawson, J. J.	Stephen, C.
Davidson, J. J. (Maryhill)	Leslie, J. R.	Stewart, W. J. (H'ght'n-le-Sp'ng)
Dobbie, W.	Lunn, W.	Taylor, R. J. (Morpeth)
Dunn, E. (Rother Valley)	Macdonald, G. (Ince)	Tinker, J. J.
Ede, J. C.	McEntee, V. La T.	White, H. Graham
Edwards, Sir C. (Bedwellty)	McGhee, H. G.	Windsor, W. (Hull, C.)
Frankel, D.	Macmillan, H. (Stockton-on-Tees)	Woods, G. S. (Finsbury)
George, Megan Lloyd (Anglesey)	MacMillan, M. (Western Isles)
Griffith, F. Kingsley (M'ddl'sbro, W.)	Maxton, J.	TELLERS FOR THE NOES.—
Griffiths, J. (Llanelly)	Parkinson, J. A.	Mr. Groves and Mr. Mathers.
Hall, J. H. (Whitechapel)	Potts, J.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

9.45 a.m.

Mr. Shinwell

If there is any justification for the criticism levelled against this Bill, and in particular this Clause, it is the mystification in the Clause itself. It is full of qualifications. It begins with "ifs," and proceeds to "ands" and "mays," and is conditioned in almost every line. The primary purpose of the Bill was to afford relief to the Special and other areas by promoting new industrial enterprises. That need was emphasized by the Commissioner, and we might have expected, in the circumstances, that the Government, instead of promoting what is a permissive measure, would have made the promotion of industrial enterprises obligatory on themselves. I invite attention to what the Commissioner has said: Industry is not seeking the Special Areas therefore it must be attracted to those districts of the Areas which are endowed with suitable economic facilities, and many are available. How can this be effected? My recommendation is that by means of State-provided inducements a determined attempt should be made to attract industrialists to Special Areas. Where is the determination, as expressed by the Commissioner, in the Clause under review? I can best deal with this matter by taking the Clause line by line. It begins, If a site-company is incorporated for the purpose of providing factories in any area. There is no obligation at all, and yet this is the governing Clause with regard to the promotion of new industrial enterprises. The Treasury may or may not provide the finance, and the Government may or may not take steps to promote these enterprises. Further, the Clause says that "the Treasury may"—not shall, or must—and even that qualification is further conditioned by the succeeding phrase which says in accordance with recommendation of an advisory committee appointed by them. The Advisory Committee, as we have seen, is not to advise the Minister so much as to instruct him. The Committee has, in fact, arbitrary powers. These are the conditions and qualifications in the first few lines of the Clause, and I will direction attention to Sub-section (2) of the Clause: If the Minister of Labour, upon representations made to him.… There is no reason why representations should be made to him unless he himself takes the initiative. There may be an area, Special or otherwise, where no representations may be made to him from any recognised authority, and there is no reason to believe that the Minister must take cognisance of any representations made by individuals. It goes on: … is satisfied as respects any area, not being or forming part of a special area— that there is, and has been for a considerable time, severe unemployment in the area. Here I would digress to ask the right hon. Gentleman what he means by "severe unemployment." Is there any arithmetical calculation to guide him or the committee in coming to a conclusion? Then it says: … 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. There may be an area where there has been or is a munitions establishment which is providing a considerable measure of employment for the people in that area. Do we understand that in those conditions there is no obligation either on the advisory committee or the Minister to provide means of employment for persons who may be unemployed? That is my reading of the Clause, and I should like the right hon. Gentleman to address himself to that consideration. Now I come to the third paragraph: that employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment by reason of general depression in those industries. There is a further condition in the first two lines of that paragraph, where reference is made to dependence on one or more industries which is a very important condition, having regard to the fact that the Sub-section applies to any area not being or forming part of a Special Area. It might apply to any area in the region of Lancashire, where there is a considerable measure of unemployment but a very large number of industrial establishments and industries. Moreover, I should like the right hon. Gentleman to advise the Committee what is meant by the condition in the words: by reason of general depression in those industries. What is meant by "general depression"? Are we to understand that there must have been this so-called severe unemployment over a prolonged period, and if that is what is meant, we are entitled to ask the right hon. Gentleman to define more clearly what is meant by "severe unemployment" and also to state categorically how long the unemployment must have existed before an area comes within the provision for the appointment of an advisory committee. Here again we have another qualification which seriously limits the proposals in the Clause, and having regard to these considerations, I submit that there appears in this Clause no determination on the part of the Government to establish these new industrial enterprises. I claim that I am not speaking ungenerously when I say that if it were otherwise, the Government would have been much more specific in their declarations in this Clause. There would have been no need to speak of "if" or "may," and, last but not least, there would have been no reason to leave the matter almost exclusively in the determination of an advisory committee.

I hesitate to accuse the Government of deceiving the Committee, much less of deceiving the country or of deceiving those who are so badly affected in the Special Areas, but my reading of this Clause justifies the suspicions which I have mentioned. I hope the right hon. Gentleman will be able to disabuse my mind of these suspicions. It would be grossly unfair if the Government played fast and loose with these poor persons in the Special Areas who are looking to the Government in this Measure for some modicum of relief. I do not put the case higher than that. I choose no words in regard to which I may be accused of indulging in sentiment or of appealing to the emotional instincts of hon. Members. I am concerned, I think impartially, with the administration of the facts recorded in this Clause. I wish it were otherwise, because I submit, as indeed the Commissioner has himself recommended and as has so often been urged by Members in all quarters of the House, that the essential need, in order to deal adequately with this problem, is to establish as soon as may be new industrial enterprises in the Special Areas and other areas. That being so, I beg the right hon. Gentleman on this Clause at all events, to reassure me and my hon. Friends that that much is intended in this Clause than appears on the surface.

10.1 a.m.

Mr. Maxton

I support the hon. Member for Seaham (Mr. Shinwell) in his opposition to this Clause, but I hope my opposition to it will not turn him into a supporter of it. I feel that everything he said in criticism of this Clause is more than justified. My hon. Friends nave never been enthusiastic about this sort of legislation. We have always taken the view that it is our duty to see that the people in the Special Areas have an income and that capitalism looks after the industries there as long as the system continues. This Bill was dragged out of the Government as a result of very widespread demands in the House and in the country. It seems to me that this Clause demonstrates that the Government deliberately framed a Bill that would create the impression in the Special Areas and among hon. Members that the Government were doing something, whereas, in fact, the Bill is nothing but a sham. It is obvious that all the Bill, and this Clause in particular, does is to offer inducements to private individuals to go to those areas and carry on business there. If the inducements offered do not attract anybody, nothing will happen, and the Special Areas will be exactly where they were. There is no governmental power to compel anything. Certain bribes are offered, and if those bribes are insufficient to attract people, the Bill is only a piece of paper.

If a site company is formed, who will be inerested in it? In these days, when a profitable use can be made of capital in places where there are factories and machinery already, who is going to waste time waiting while a site company is incorporated, sites prepared, factories built, and the Treasury decides what fraction of financial support it will give? Let hon. Members note that it is always a question of a minority fraction. The Government never puts itself into the position of being a senior partner at any stage of the Bill; the Government is always the junior partner, without powers of initiative or control, and without powers of drive.

The Government are depending upon the Commissioner to give life and vitality to these vague generalities and aspirations. I knew the Commissioner very well when he was a Member of the House. He was a genial colleague to work with when I was in the same party as he was, and he was not a bad opponent to deal with when he was in another party; but does anybody who knew him intimately think that he is the man who will put life and movement, body and soul into this Clause? Nobody who knew the Commissioner personally will say that he is the type of man who can make this go in spite of all the difficulties and handicaps that are placed on him and the complete lack of real governmental force behind him.

The Minister referred to advisory committees, and I think he was most unfortunate in his example—the Export Credits Advisory Committee. Hon. Members who were in the House at the time when export credits were a more vital Parliamentary issue than they have been in recent years will remember how, week after week and month after month, we tried to start our trade with Russia. If I remember rightly, the right hon. Gentleman the Minister of Labour was at that time on these Benches in opposition, and took part in the questioning and cross-questioning on the matter. Questions were put to the Secretary of the Overseas Trade Department about the development of trade with Russia and the provision of export credits, and the responsibility was always put on to the Advisory Committee.

That is an illustration of one type of advisory committee—the advisory committee which blocks, and which is always put forward as an excuse for the Minister not doing anything. In such cases the Minister always says, "The matter is out of my hands and in the hands of a very responsible advisory committee, composed of some of the most experienced men in this country, and it would be quite improper for me, after having appointed these gentlemen and asked them to devote their time to this task, to interfere in their work. There have been so many applications to the advisory committee that it will be months before all of them can be dealt with."

The other type is the advisory committee that is a dead letter. I do not know how many dead-letter advisory committees there are in existence at the present time, but I know that often in Scotland and on train journeys I meet some public person who says to me, "Did you see that I was put on the advisory committee for so and so?" His name has been in the newspapers and he is awfully pleased. I reply, "Oh yes, I am very pleased indeed; I think you will be a most valuable member." Then about two years later, I meet him again and say, "How are you getting on?" and he replies, "We have not met yet; we are still waiting to be summoned; I don't think there is much doing in our line just now." Those are the two sorts —the obstructionist advisory committees which stand in the way of progress, and the advisory committees that are not there at all.

I cannot see how the advisory committee provided for in Clause 5 can function. I cannot conceive four men doing the job of advising about whether an area should be included or not. I noticed the Welsh Members jumping to their feet to demand that a Welshman should be put on the committee just because the Minister happened to mention that there was to be a Scotsman on it. As far as I am concerned he can appoint four Welshmen, but he will not get me to agree that, because there is one Scotsman on the advisory committee that will turn it from a nothing into a reality.

Mr. Pritt

It is a great proof of English common sense that no one demanded that there should be an Englishman on it.

Mr. Maxton

The assumption all along has been that there are to be three Englishmen to start it. It is a "do-nothing" committee and I think I could pick three who would do extraordinarily well on it and they would not all be English. If it were a working committee, if there was reality in it, if it was a committee to advise the hon. Member for the Western Isles (Mr. M. Macmillan), for example, I could understand it. But it is to be a spare time, voluntary unpaid, committee. Imagine this voluntary committee going up to the Western Isles, or to Orkney and Shetland. To go once to the Western Isles is an experience. To go twice is a punishment. But to go to the Western Isles one day and then up to Lerwick and then down to Anglesey and South Wales and then into Lancashire and Yorkshire—what spare time unpaid voluntary committee will do anything of the kind? I know what they will do. They will meet once a month at the Ministry of Labour and a junior official of the Ministry will be there. They will say to him, "What are we going to do about this," and he will say, "My recommendation is so and so," and they will say, "Right," and go off to lunch.

That is an advisory committee in practice and that is what the Government are doing for the Special Areas. They are shuffling out of the responsibility. This is an empty Bill, based on the idea that you can work in these areas some sort of bastard combination of private enterprise and State enterprise with the State always as the junior partner. Such a partnership cannot work. One has heard the saying that a half-caste has the vices of both races and the virtues of neither. I do not believe that but if there is any progeny or alliance to which I refer, it will have neither the virtues of public enterprise, nor the virtues of private enterprise, but the vices of both. I am satisfied that no scheme of that sort is going to bring vitality and hope to these areas. To do that something fundamental is required. The Government will have to show that it is prepared to shoulder its responsibility. Here we have a dodging of responsibility on the part of the Government and the Minister and everybody involved. The whole thing is foredoomed to failure. I trust I have not said too much and I hope that the hon. Member who is leading the Opposition at the moment will go into the Division Lobby on this question.

10.16 a.m.

Mr. Acland

I agree with the criticism levelled against this Clause on the ground that it is inadequate. Nevertheless, I desire to ask the Minister some questions about it, because although it seems capable of doing little, yet it may do something and I want to know how to get the best out of it. My first question is as to the size of areas. Does the Minister contemplate any limit of smallness in the case of these areas. If there is a very small area which satisfies all the conditions, will it be disqualified on the ground of size? My second question relates to the condition of being "mainly dependent" on one or two industries. Suppose there are no industries whatever in an area on which it can be said to be mainly dependent? Will it be disqualified because of some very little industries which are in that area and are languishing there although they are generally prosperous industries? For example, suppose the case of a town in which there are 1,000 workers. There is a shirt factory employing 10 people, a bottle-making factory employing five people and a glove-making factory employing 20 people. Will it be said that because of the existence of those three little factories and because those three industries are not generally depressed, therefore, that area must be wiped out of consideration?

As to the people who are to take the initiative in making this Clause work, if it works at all, it seems to me that they are likely to be in many cases semi-philanthropic people, people who will say, "For the sake of our area, we will get something going if we can obtain Government assistance under this Clause." Suppose that A. B. C. and D. decide to do that, will it be possible for A. B. and C. to form themselves into a site company and then for B. C. and D. to form themselves into the undertaking which is to lease the factory or factories provided by the site company? Could that be done openly and above board and with the approval of the Minister, or must we find one group of philanthropists to form a site company and a separate group of people to run the undertaking? Finally, I wish to know whether there is any provision as to the rate of interest which the Treasury will charge on the loans which it gives? I put those questions to the Minister, but as I have to address a meeting later to-day in Cornwall, I am afraid I shall have to read the right hon. Gentleman's replies in the OFFICIAL REPORT.

10.20 a.m.

Mr. M. MacMillan

I am going to quote the words of somebody who seems to be listened to in this House with a great deal more respect than some of us, I refer to Herr Hitler.

Mr. Maxton

He has got the guns.

Mr. J. Griffiths

He has not got an advisory Committee.

Mr. MacMillan

In his book, "Mein Kampf," Herr Hitler speaking, I think, of the depressed classes of Germany, wrote: The restoration of the rights of these people is not a question of bestowing charity but a question of restoring rights. That is what we are asking for on behalf of the people of the Highlands and Islands. They have had their rights taken away from them for generations by the very class whom the Government represent to this day. The Highlands of Scotland are more of a special and distressed area than any other part of Scotland. In this Bill we have what we might call a sheaf of "if's." There is one "if" after another, with the inevitable and occasional "but" which usually offsets any value under "if." We read that: If the Minister is satisfied that there has been for a considerable time severe unemployment in the area, something may or may not be done. We could usually say "may but will not be done," in the case of the present Government.

For a considerable time there has been severe unemployment in the area to which I have referred and which covers one-fifth of Great Britain. It is chiefly an agricultural area, with certain local industries and one national industry, the fishing industry. So considerable is the time during which this condition of severe unemployment has lasted that while Lancashire and other Special Areas are still waiting for jobs, people in our part of the country, which waited for jobs during generations and found that the jobs did not come, are leaving the area in a state of despair which the Government are doing nothing to alleviate. That first condition as to "severe" unemployment is all too easily satisfied by this area. It has a history of generations of severe unemployment. This cannot be controverted or denied. It is so severe that nearly 4,000 people have been leaving the area every year. They leave behind unemployment which is unassisted by Government and, without prospects here, they go to other countries beyond the bounds of the British Empire, or in some more hopeful régime within the Empire, where there might be opportunity for self-development and work and hope for their families.

There is the further promise that, if, 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 …. the Government may come in and assist. The Secretary of State, the Government and we all, know that there is no immediate likelihood of a substantial increase in employment in the Highlands and Islands of Scotland to-day, unless some Government action is taken. The hon. Member for Bridgeton (Mr. Maxton) referred to the Government as always having been the junior partner in any undertaking in which they entered. I should say that the Secretary of State for Scotland has been the sleeping partner. Those two conditions of the Clause have been far more than satisfied. If the Minister is satisfied that our people have suffered enough, he should bring forward some suggestion and some practicable scheme to alleviate as soon as possible the unemployment and neglect of areas for the relief of which this Government, for the past six years, have had the best opportunity that any Government ever had.

The third condition, which is satisfied by many parts of the area is: that employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment by reason of general depression in those industries. The Secretary of State for Scotland ought to know very well that the Highlands and Islands are dependent upon industries which are in decline because they are unassisted by the Government. He knows that the fishing industry is regarded as essential in time of war, when the Government can use it for their own convenience, and that that industry has been neglected. The people in the Highlands can give ample proof. The conditions in which they live tell their own story. The amount of money which goes into the Highlands depends upon the fishing industry, but the money which now goes into that district comes from public assistance, poor law relief and unemployment insurance benefit. The position must be faced by the Minister of Labour and the Secretary of State for Scotland. The poverty of the county councils is due to the fact that they cannot impose high rates. All these facts, which ought to be faced, are being neglected or ignored. Hon. Members should bear in mind that, behind these facts, we are dealing with human beings who occupy one-fifth of the area of this country.

Mr. Granville Gibson

If the hon. Member is so keen about unemployment in the Highlands why did his party vote against the Caledonian Power Bill which would have given employment in the Highlands of Scotland?

Mr. MacMillan

I voted for it and so did most of the Scottish Members of this party. I voted for the consideration of that Bill in Committee in order that the full facts of the possibilities of hydro-electrical development could be considered. Let me make it clear once more that I was advocating examination for the sake of the Highlands and not at all on behalf of the private promoters of the Bill. I hoped that the Government, seeing this possibility of hydro-electrical development in the north, would have given it their blessing and developed it as a State enterprise unmixed with private capitalism. We have the words of the Lord President of the Council, who calls himself a Highlander, over the radio the other day, when he unofficially, but sincerely, said that the industrialisation of this area was inevitable to some extent, with full regard to the Highland scene and the preservation of Highland amenities.

Nevertheless, we must develop, as far as possible, along the natural lines of Highland life. We must develop the natural resources of the north of Scotland and industrialise it to some extent. If there were a progressive land policy in the Highlands and a properly developed fishing industry, the question of industrialisation would not be so acute. Because, however, of the neglect of those industries, we must go in for something else like power schemes and invite companies to come into the Highlands. The Lord President has blessed it, although unofficially, and now we want the official blessing of the Government. We want the blessing of the Minister of Labour, and we could get it under this Bill. We want also the blessing of the Secretary of State, and we would give him a blessing in exchange. All the conditions in the Bill are fully satisfied, and if the Ministers are not prepared to face the facts, let them get out and make way for someone who will.

10.34. a.m.

Mr. Adamson

The position under this Clause is so qualified and so permissive that it is impossible to conceive how it can be operated with any effect in assisting other areas. It is laid down in the qualifications that any district can be included under this Clause, as for instance, places where one or two principal industries only are affected and where it is possible for development to be made in secondary or small industries. The problem of these districts may vary in a large degree. In the outer ring of the industrial Midlands it is conceivable that, within a few miles of Birmingham, there may be areas that would qualify as Special Areas for the purpose of the development of new industries. The problems of those areas differ according to the character of the district. The area round the centre of the Midlands has, in the main been dependent for generations upon coal-mining. There has never been any encouragement by the Government or any desire by industrialists to develop industries of a different character in those areas. The result is that younger persons and women who desire some other occupation than mining have to travel many miles to get work. There is a recognition in this Bill—but it is only a recognition— that industries should be established in such areas. They are dependent on the establishment of a site company, and that in turn is dependent on the goodwill of the Treasury. The application of this Clause to an area is, again, dependent on the stipulations laid down in three paragraphs. Finally there has to be the procedure of an Advisory Committee which advises the Minister whether such industries should be included.

I was hopeful that the Government, in facing this problem, would have taken their courage in both hands and would have taken some State responsibility, not merely for the planning of industry in those districts, but for seeing that they would be operated in the interests of the districts and of the nation as a whole. However, even under the Bill as it is, while we may accept it in the circumstances, we would have hoped that at least the recommendations and qualifications laid down would have been such as would have given us some hope that we would want to operate it in the near future so as to bring the advantages of the Measure to these poor people.

10.41 a.m.

Mr. J. Griffiths

We on this side are being subjected to one criticism almost every time we discuss this question of the Special Areas, and I am almost sure the Minister of Labour will make the same kind of criticism again. I want, therefore, to give our reply to it. This Clause makes provision for bringing in new areas, and we are charged from the other side with inconsistency when we say that the measures of the Government are trivial and at the same time request that other areas should be brought within the provisions of the Bill. That is an expression of the terrible need of these areas, whose unemployment has been so intense and has been so badly helped, whose depression and poverty are so acute that they are in the position of beggars who are glad of even a penny. The result is that since the Special Areas Act of 1934 there have been repeated requests to the Government to extend these provisions so as to improve other areas. In our minds all the time is the belief that these areas are never going to recover their prosperity of their own volition unless they are strengthened from the outside, and the conviction that some day, sooner or later—and the sooner the better—we shall have a Government that will do the fundamental job so far as these areas are concerned.

There have been recommendations from the area that I represent and from other areas asking the Government to establish a new type of area, and I think the new name, the new description of such areas, may have some significance. So far as I can gather, there are certain areas which have made this request to the Ministry: "We do no want to be called a Special Area or a depressed area, because we believe that if we are scheduled as such, it may do damage to our prestige." I have heard that there are cities, or at least a city, in Wales and towns in Wales which are going to request to be certified. If they are certified and get assistance, whatever new industries come to Wales will go to that city and those areas, and Merthyr, Rhondda, and the other Special Areas will be robbed by the very provisions of this new Measure. I therefore want to press for a reply to the question why we have this new term of certified areas, which are not to be described as Special Areas or depressed areas, and whether such towns as I have in mind are going to be certified, because, if they are, I fear that the new industries will go there.

We have been here now for 12 hours, and I see that the morning shift is beginning to arrive. All that is provided for these new certified areas is that if they can provide, themselves, a site-company, the Government will assist them. I am thinking of some of the small towns and villages that I represent. Before we can get a brass farthing from the Government, we have to provide a site-company and two-thirds of the capital required for that purpose. All that the Government will give is one-third. Do the Government suggest that these small towns and villages or groups of villages, dependent as they have been upon one or two main industries, and largely on one only, namely, the coal industry, with pits closed down, with no rich men or industrialists living there, and with almost all their population on unemployment benefit—do the Government suggest that in such areas we are going to get the money to provide two-thirds of the capital required for a site-company?

I think the worst thing that this House can do is to hold out hopes to the people in these areas that are going to be falsified. That is what we have been doing since 1934, passing one trivial Measure after another, each new discussion here creating fresh hopes in these Special Areas which have only been disappointed. Now we are holding out hopes to new areas, but I must say that I see no hope of a site-company being provided and of the money being raised to provide two-thirds of the cost of that company, unless —and here I want the Government to pay special attention to what I am saying. There are four of five pockets of unemployment in my division where the unemployment percentage is well over 50. They are dependent either on the coal pits, which are closed, or the tinplate works, which are being rationalised out of existence, and there is no hope of employment being provided unless there is assistance from outside. As I say, there are no rich people there, and the only hope of providing the money to establish a site-company in that area is for the local authority to do it.

Can the local authority, out of the rates which it can levy, provide the two-thirds of the money required to establish a site-company in such an area? Unless the local authority has the right to do it, who else can? If a site-company is not established, what will there be for these areas? There is nothing in this Bill. It seems to me to be vital that these areas should know who has the power. Has the local authority power to provide money for these site-companies? It will be outside the power of the Commissioner to provide money for them, and the Government will not give one-third until two-thirds have been found. Unless the local authority have power to use public money to begin these site-companies, I see no hope for these areas.

10.52 a.m.

Mr. E. Brown

I do not intend to argue about the new advisory committee, since we have already debated that at length, and although we have since heard a very eloquent speech on that matter from the hon. Member for Bridgeton (Mr. Maxton), I do not consider it necessary that I should cover the ground again. Nor do I intend to say anything about the site-companies. The discussion boils down to this, that hon. Members wish to have whatever information I can give about the main conditions. Perhaps I can best reply by answering the questions put by the hon. Member for Barnstaple (Mr. Acland), the hon. Member for Seaham (Mr. Shinwell) and the hon. Member for Llanelly (Mr. J. Griffiths).

The hon. Member for Barnstaple put three questions. He asked, first, whether any particular area would be debarred because of size, and the answer is that it will not. The question to be settled ad hoc by the Committee is whether it is thought to be an area suitable for the facilities under this Clause. Secondly, asked what would be the rate of interest. The answer is that it will be determined by the Treasury on the advice of the Advisory Committee. With regard to his third question, whether, if A, B, C, and D took the initiative in setting up a site-company, it would be possible for the site-company also to be the manufacturing company. The answer is that it would not. The site-company would be one entity and the manufacturing company would be another, but I do not know of anything that would prevent any particular individual on the site-company from being connected with the manufacturing company. I think those three answers clear up points that have been raised by other hon. Members also.

Mr. Maxton

Does that mean that if A, B, C and D form a site-company either D, C, B or A may be on the manufacturing company?

Mr. Brown

There is nothing in the Bill to prevent an individual member of a site-company from being on the board of the manufacturing company. What we are anxious to do is to get local initiative, and to attract industries into the areas.

Mr. David Adams

May a local authority set up a site-company?

Mr. Brown

I have already answered that question. It may not, but the initiative would probably come from a local development council.

Mr. Adams

There might not be one.

Mr. Brown

There is no reason why one should not be formed.

Mr. J. Griffiths

If the local authority cannot provide out of the rates the money required for the site-company, and supposing that the local authority is represented on or is affiliated to the development council, may it make a contribution to the funds of the development council?

Mr. Brown

That depends entirely upon the Local Government Acts. The main issue turns on the conditions. This provision does not apply to an area where there is no possibility of the formation of a site-company, and it does not apply to any area unless it is clear that, without financial aid, there can be no recovery in that area. Hon. Members have asked why we have included these general words about "severe unemployment" and "general depression." The reason is that we were bound to have some standard to set before the advisory committee in order to direct attention where it was really wanted. As the Committee knows, the difficulty about extending the Special Areas was that there was such an overwhelming number of applications from cities, towns and areas of varying sizes that, if all the requests had been acceded to, we should have dissipated the efforts that we are making to get new industries to go to the Special Areas. Yet there might be left outside some areas, such as there are in parts of Yorkshire and Lancashire, to which obviously it would be proper to induce new industries to go.

An hon. Member has raised the question of Glasgow. I fully recognise the problems of that great city. It is a city which has a great deal of poverty, but it is also a city with very great resources and with a tremendous range of industries. But there cannot be any comparison between Glasgow and an area, such as the area near the constituency of the Hon. Member for Ince (Mr. G. Macdonald), the hon. Member for Wigan (Mr. Parkinson) or the hon. Member for Leigh (Mr. Tinker), where for a long period there has been great unemployment owing to a particular industry having collapsed in that area. That is the broad line of demarcation. Therefore, we have tried to avoid any mathematical formula. Hon. Members who have had to deal with arrangements depending upon fixed figures know how difficult it is. What do we mean by the term "severe unemployment"? I refuse to be drawn into giving any fixed figure, any more than a fixed figure is given in the Bill, but I do not mind trying to give an indication of what we have in mind.

Mr. Shinwell

It is not a question of what the Minister thinks, for it depends on the recommendation of the Advisory Committee. How will the Advisory Committee make up its mind whether there is need to introduce new industrial enterprises into a particular area on the strength of the phrase "severe unemployment"?

Mr. Brown

Severe unemployment would be one of the elements of the problem that would have to be considered: If we said that an area was not an area to be assisted unless it had unemployment of not less than 20 per cent. over five years, there might be particular cases where other factors would be involved; such as general depression which ought to be considered even though the mathematical formula was not satisfied. It must be remembered that in all these things there is nothing static. Conditions change from time to time. The effects of rationalisation, the extent to which industrial expansion is fully employed, the general level of unemployment, the existence of large blocks of unemployment in particular areas—these are some of the factors which have to be taken into account. There may be others which arise out of the peculiarities of a particular industry. But whatever they are, they have to be considered and we have laid down this proposal here in general terms, so that the advisory committee, in the light of their commonsense and of the policy declared in the Clause, may be able to make recommendations as to whether or not an area fulfills the required conditions.

The hon. Member for Llanelly (Mr. J. Griffiths) put a question to me and I was careful not to give him a mathematical answer. He also interrupted the Chancellor of the Exchequer on the same point, but my right hon. Friend returned exactly the same kind of answer for exactly the same reason. It is not that there is any desire to avoid giving answers to questions which can be answered, but because we do not wish to prejudge these matters by laying down arbitrary figures now, as to the cases in which it might be suitable to try to induce industries to come into these areas. In answer to the major point raised by the hon. Member for Seaham (Mr. Shinwell), this Bill does represent a determined attempt to induce industries to come into the Special Areas, and I am sure that it will be a successful attempt. I believe there are areas in which there is sufficient local initiative to induce industries to come in and to diversify their industrial and economic life and that full advantage will be taken of these facilities. This Clause of the Bill will be effective for the good of areas outside the Special Areas.

11.4 a.m.

Mr. Ellis Smith

Sub-section (3) of this Clause states that any sums required for the provision of financial assistance under it, are to be paid out of moneys provided by Parliament. We hear from time to time criticisms levelled against the practice of outside bodies usurping the functions of Parliament. I wish to know, as we have had reports prepared by special Commissioners dealing with the Special Areas in the past, whether under this Bill we shall have reports prepared for the certified areas so that the House can examine what is taking place in those areas from time to time.

Mr. Brown

It will, of course, be part of my normal responsibility to give the House full information on these matters.

Mr. Smith

The Clause also states that if the Minister, upon representations made to him, is satisfied as respects any area not being, or forming part of a Special Area, of certain conditions, he may direct that the Clause shall apply to that area. Representations have been made to me in regard to an area which is seriously affected by economic conditions. Chambers of commerce, trades councils, urban district councils and other bodies in that area have jointly done which they could to revive industry in it, but up to now with very little success. I refer to the North Staffordshire area. There are urban and rural districts there with between 30 per cent. and 50 per cent. of unem- ployment. There is an ideal railway system, water supply and coal supply and an ample supply of limestone. In the third Report of the Commissioner for Special Areas we find this: Production of Calcium Carbide. Further investigation of this problem may be required. Preliminary investigations made for me by a competent firm of engineers indicate that the production of calcium carbide using electricity generated from steam power is now a commercial possibility. I understand that practically all the calcium carbide consumed in this country is imported, and that competent engineers have stated that it could be manufactured here at £7 per ton cheaper than the cost of its importation.

The Deputy-Chairman

I do not see how this Clause affects the hon. Member's point.

Mr. Smith

I am referring to the words "If the Minister upon representations made to him is satisfied as respects any area." If there is unemployment in the area, representations may be made to the Minister asking for financial assistance.

The Deputy-Chairman

I do not think the hon. Member is right. What they can do, is to make representations to the Minister about the formation of a site company, but I do not think that would affect the problem referred to by the hon. Member one way or the other.

Mr. Smith

They might start a company to manufacture calcium carbide.

The time has arrived when this question ought to be faced by us. We are suspicious that there is some combine responsible for preventing the manufacture of calcium carbide in this country. In the report of the Commissioner attention is drawn to this: Mechanisation and rationalisation are constantly reducing the number of men required to raise a given quantity of coal.

The Deputy-Chairman

We cannot go into that subject on the Question, "That the Clause stand part of the Bill." This is solely concerned with the question of whether site-companies should be provided, either within or without the Special Areas.

Mr. Smith

I shall respect your Ruling, Captain Bourne. The point I wished to make was that the time had arrived when a company should be set up for the manufacture of calcium carbide. We are suspicious that a monopoly is preventing it being manufactured in this country and it could be manufactured in these areas.

Several hon. Members rose—

Captain Margesson rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 135; Noes, 63.

Division No. 159.]	AYES.	[11.10 a.m.
Adams, S. V. T. (Leeds, W.)	Cobb, Captain E. C. (Preston)	Harvey, Sir G.
Agnew, Lieut.-Comdr. P. G.	Colville, Lt.-Col. Rt. Hon. D. J.	Haslam, H. C. (Horncastle)
Albery, Sir Irving	Cooke, J. D. (Hammersmith, S.)	Haslam, Sir J. (Bolton)
Allen, Lt.-Col. J. Sandeman (B'kn'hd)	Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)	Heilgers, Captain F. F. A.
Balniel, Lord	Cranborne, Viscount	Herbert, A. P. (Oxford U.)
Barclay-Harvey, Sir C. M.	Crooke, J. S.	Hills, Major Rt. Hon. J. W. (Ripon)
Barrie, Sir C. C.	Crookshank, Capt. H. F. C.	Holmes, J. S.
Baxter, A, Beverley	Crowder, J. F. E.	Hope, Captain Hon. A. O. J.
Beaumont, Hon. R. E. B. (Portsm'h)	Davies, C. (Montgomery)	Hopkinson, A.
Beit, Sir A. L.	Davies, Major Sir G. F. (Yeovil)	Hore-Belisha, Rt. Hon. L.
Blinded, Sir J.	Dower, Capt. A. V. G.	Horsbrugh, Florence
Boothby, R. J. G.	Dugdale, Major T. L.	Hudson, R. S. (Southport)
Bowater, Col. Sir T. Vansittart	Duncan, J. A. L.	Hurd, Sir P. A.
Bower, Comdr. R. T.	Eckersley, P. T.	Inskip, Rt. Hon. Sir T. W. H.
Bowyer, Capt. Sir G. E. W.	Elliot, Rt. Hon. W. E.	James, Wing-Commander A. W. H.
Braithwaite, Major A. N.	Elmley, Viscount	Jarvis, Sir J. J.
Brooklebank, C. E. R.	Emery, J. F.	Joel, D. J. B.
Brown, Rt. Hon. E. (Leith)	Emrys-Evans, P. V.	Keeling, E. H.
Bull, B. B.	Evans, Capt. A. (Cardiff, S.)	Kerr, Colonel C. I. (Montrose)
Bullock, Capt. M.	Findlay, Sir E.	Keyes, Admiral of the Fleet Sir R.
Cartland, J. R. H.	Fox, Sir G. W. G.	Lamb, Sir J. Q.
Carver, Major W. H.	Furness, S. N.	Leighton, Major B. E. p.
Cary, R. A.	Fyfe, D. P. M	Lloyd, G. W.
Castlereagh, Viscount	Gibson, C. G. (Pudsey and Otley)	Loftus, P. C.
Cazalet, Thelma (Islington, E.)	Grimston, R. V.	Lyons, A. M.
Channon, H.	Guinness, T. L. E. B.	MacAndrew, Colonel Sir C. G.
Chorlton, A. E. L.	Gunston, Capt. D. W.	McCorquodale, M. S.
Clydesdale, Marquess of	Hamilton, Sir G. C.	McKie, J. H.
Makins, Brig.-Gen. E.	Raikes, H. V. A. M.	Somervell. Sir D. B. (Crewe)
Manningham-Buller, Sir M	Ramsay, Captain A. H. M.	Southby, Commander A. R. J.
Margesson, Capt. Rt. Hon H. D. R.	Ramsbotham, H.	Spears, Brigadier-General E. L.
Maxwell, Hon. S. A.	Rankin, Sir R.	Sueter, Rear-Admiral Sir M. F.
Mayhew, Lt. Col. J.	Rathbone, J. R. (Bodmin)	Tate, Mavis C.
Mellor, Sir J. S. P. (Tamworth)	Rickards, G. W. (Skipton)	Touche, G. C.
Mills, Major J. D. (New Forest)	Robinson, J. R. (Blackpool)	Tree, A. R. L. F.
Moore, Lieut.-Col. T. C. R.	Ropner, Colonel L.	Tryon, Major Rt. Hon. G. C.
Moreing, A. C.	Ross, Major Sir R. D. (Londonderry)	Wakefield, W. W.
Palmer, G. E. H.	Russell, R. J. (Eddisbury)	Ward, Lieut.-Col. Sir A. L. (Hull)
Patrick, C. M.	Salmon, Sir I.	Warrender, Sir V.
Penny, Sir G.	Savery, Sir Servington	Watt, G. S. H.
Percy, Rt. Hon. Lord E.	Selley, H. R.	Williams, C. (Torquay)
Perkins, W. R. D.	Shakespeare, G. H.	Williams, H. G. (Croydon, S.)
Peters, Dr. S. J.	Shaw, Major P. S. (Wavertree)	Withers, Sir J. J.
Plugge, Capt. L. F.	Simon, Rt. Hon. Sir J. A.
Ponsonby, Col. C. E.	Smith, L. W. (Hallam)	TELLERS FOR THE AYES.—
Pownall, Lt.-Col. Sir Assheton	Smith, Sir R. W. (Aberdeen)	Mr. James Stuart and Lieut.- Colonel Llewellin.
NOES.
Adams, D. (Consett)	Hall, J. H. (Whitechapel)	Pritt, D. N.
Adamson, W. M.	Harris, Sir P. A.	Quibell, D. J. K.
Alexander, Rt. Hon. A. V. (H'lsbr.)	Hayday, A.	Ritson, J.
Altlee, Rt. Hon. C. R.	Henderson, J. (Ardwick)	Rowson, G.
Barr, J.	Hopkin, D.	Seely, Sir H. M.
Batey, J.	Jagger, J.	Shinwell, E.
Burke, W. A.	Jenkins, A. (Pontypool)	Smith, Ben (Rotherhithe)
Davidson, J. J. (Maryhill)	Jenkins, Sir W. (Neath)	Smith, E. (Stoke)
Davies, R. J. (Westhoughton)	Jones, A. C. (Shipley)	Smith, T. (Normanton)
Day, H.	Kelly, W. T.	Sorensen, R. W.
Dobbie, W.	Kennedy, Rt. Hon. T.	Stephen, C.
Dunn, E. (Rother Valley)	Kirby, B. V.	Strauss, G. R. (Lambeth, N.)
Ede, J. C.	Lee, F.	Taylor, R. J. (Morpeth)
Edwards, Sir C. (Bedwellty)	Leslie, J. R.	Thorne, W.
Foot, D. M.	Lunn, W.	Tinker, J. J.
Frankel, D.	Macdonald, G. (Ince)	Watkins, F. C.
Gardner, B. W.	McEntee, V. La T.	White, H. Graham
George, Megan Lloyd (Anglesey)	MacMillan, M. (Western Isles)	Windsor, W. (Hull, C.)
Griffith, F. Kingsley (M'ddl'sbro, W.)	Maxton, J.	Woods, G. S. (Finsbury)
Griffiths, G. A. (Hemsworth)	Messer, F.
Griffiths, J. (Llanelly)	Parkinson, J. A.	TELLERS FOR THE NOES.—
Groves, T. E.	Potts, J.	Mr. Whiteley and Mr. Mathers.

Question put accordingly, "That the Clause stand part of the Bill".

The Committee divided: Ayes, 145; Noes, 59.

Division No. 160.]	AYES.	11.17 a.m.
Adams, S. V. T. (Leeds, W.)	Crookshank, Capt. H. F. C.	Holmes, J. S.
Agnew, Lieut.-Comdr. P. G.	Crowder, J. F. E.	Hope, Captain Hon. A. O. J.
Albery, Sir Irving	Davies, C. (Montgomery)	Hopkinson, A.
Allen, Lt.-Col. J. Sandeman (B'kn'hd)	Davies, Major Sir G. F. (Yeovil)	Hore-Belisha, Rt. Hon. L.
Balniel, Lord	Dower, Capt. A. V. G.	Horsbrugh, Florence
Barclay-Harvey, Sir C. M.	Dugdate, Major T. L.	Hudson, R. S. (Southport)
Barrie, Sir G. G.	Duncan, J. A. L.	Hurd, Sir P. A.
Baxter, A. Beverley	Eckersley, P. T.	Inskip, Rt. Hon. Sir T. W. H.
Beaumont, Hon. R. E. B. (Portsm'h)	Edmondson, Major Sir J.	James, Wing-Commander A. W. H.
Beit, Sir A. L.	Elliot, Rt. Hon. W E	Jarvis, Sir J. J.
Blindell, Sir J.	Elmley, Viscount	Joel, D. J. B.
Boothby, R. J. G.	Emery, J. F.	Keeling, E. H.
Bowater, Col. Sir T. Vansittart	Emrys-Evans, P. V.	Kerr, Colonel C. I. (Montrose)
Bower, Comdr. R. T.	Evans, Capt. A. (Cardiff, S.)	Keyes, Admiral of the Fleet Sir R.
Bowyer, Capt. Sir G. E. W.	Findlay, Sir E.	Lamb, Sir J. Q.
Braithwaite, Major A. N.	Foot, D. M.	Leighton, Major B. E. P.
Brocklebank, C. E. R.	Fox, Sir G. W. G.	Lloyd, G. W.
Brown, Rt. Hon. E. (Leith)	Furness, S. N.	Loftus, P. C.
Bull, B. B.	Fyfe, D. P. M.	Lyons, A. M.
Bullock, Capt. M.	George, Megan Lloyd (Anglesey)	MacAndrew, Colonel Sir C. G.
Cartland, J. R. H.	Gibson, C. G. (Pudsey and Otley)	McCorquodale, M. S.
Carver, Major W. H.	Grant-Ferris, R.	McKie, J. H.
Cary, R. A.	Griffith, F. Kingsley (M'ddl'sbro, W.)	Makins, Brig.-Gen. E.
Castlereagh, Viscount	Grimston, R. V.	Manningham-Buller, Sir M.
Cazalet, Thelma (Islington, E.)	Guinness, T. L. E. B.	Margesson, Capt. Rt. Hon. H. D. R.
Channon, H.	Gunston, Capt. D. W.	Maxwell, Hon. S. A.
Chorlton, A. E. L.	Hamilton, Sir G. C.	Mayhew, Lt.-Col. d.
Clydesdale, Marquess of	Harris, Sir P. A.	Mellor, Sir J. S. P. (Tamworth)
Cobb, Captain E. C. (Preston)	Harvey, Sir G.	Mills, Major J. D. (New Forest)
Colville, Lt.-Col. Rt. Hon. D. J.	Haslam, H. C. (Horncastle)	Moore, Lieut.-Col. T. C. R.
Cooke, J. D. (Hammersmith, S.)	Haslam, Sir J. (Bolton)	Moreing, A. C.
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)	Heilgers, Captain F. F. A.	Palmer, G. E. H.
Cranborne, Viscount	Herbert, A. P. (Oxford U.)	Patrick, C. M.
Crooke, J. S.	Hills, Major Rt. Hon. J. W. (Ripon)	Penny, Sir G.
Percy, Rt. Hon. Lord E.	Salmon, Sir I.	Touche, G. C.
Parking, W. R. D.	Savery, Sir Servington	Tree, A. R. L. F.
Peters, Dr. S. J.	Seely, Sir H. M.	Tryon, Major Rt. Hon. G. C.
Plugge, Capt. L. F.	Selley, H. R.	Wakefield, W. W.
Ponsonby, Col. C. E.	Shakespeare, G. H.	Ward, Lieut.-Col. Sir A. L. (Hull)
Pownall, Lt.-Col. Sir Assheton	Shaw, Major P. S. (Wavertree)	Warrender, Sir V.
Raikes, H. V. A. M.	Simon, Rt. Hon. Sir J. A.	Watt, G. S. H.
Ramsay, Captain A. H. M.	Smith, L. W. (Hallam)	White, H. Graham
Ramsbotham, H.	Smith, Sir R. W. (Aberdeen)	Williams, C. (Torquay)
Rankin, Sir R.	Somervell, Sir D. B. (Crewe)	Williams, H. G. (Croydon, S.)
Rathbone, J. R. (Bodmin)	Somerville, A. A. (Windsor)	Withers, Sir J. J.
Rickards, G. W. (Skipton)	Southby, Commander A. R. J.
Robinson, J. R. (Blackpool)	Spears, Brigadier-General E. L.	TELLERS FOR THE AYES.—
Ropner, Colonel L.	Sueter, Rear-Admiral Sir M. F.	Mr. James Stuart and Lieut.- Colonel Llewellin.
Ross, Major Sir R. O. (Londonderry)	Tate, Mavis C.
Russell, R. J. (Eddisbury)	Thomas, J. P. L.
NOES.
Adams, D. (Consett)	Hopkin, D.	Quibell, D. J. K.
Adamson, W. M.	Jagger, J.	Ritson, J.
Alexander, Rt. Hon. A. V. (H'lsbr.)	Jenkins, A. (Pontypool)	Rowson, G.
Attlee, Rt. Hon. C. R.	Jenkins, Sir W. (Neath)	Shinwell, E.
Barr, J.	Jones, A. C. (Shipley)	Smith, Ben (Rotherhithe)
Batey, J.	Kelly, W. T.	Smith, E. (Stoke)
Burke, W. A.	Kennedy, Rt. Hon. T.	Smith, T. (Normanton)
Davidson, J. J. (Maryhill)	Kirby, B. V.	Sorensen, R. W.
Davies, R. J. (Westhoughton)	Lawson, J. J.	Stephen, C.
Day, H.	Lee, F.	Strauss, G. R. (Lambeth, N.)
Dobbie, W.	Leslie, J. R.	Taylor, R. J. (Morpeth)
Dunn, E. (Rother Valley)	Lunn, W.	Thorne, W.
Ede, J. C.	Macdonald, G. (Ince)	Tinker, J. J.
Edwards, Sir C. (Bedwellty)	McEntee, V. La T.	Viant, S. P.
Frankel, D.	Macmillan, H. (Stockton-on-Tees)	Watkins, F. C.
Gardner, B. W.	Mathers, G.	Windsor, W. (Hull, C.)
Griffiths, G. A. (Hemsworth)	Maxton, J.	Woods, G. S. (Finsbury)
Griffiths, J. (Llanelly)	Messer, F.
Hall, J. H. (Whitechapel)	Parkinson, J. A.	TELLERS FOR THE NOES.—
Hayday, A.	Potts, J.	Mr. Whiteley and Mr. Groves.
Henderson, J. (Ardwick)	Pritt, D. N.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clause 6 ordered to stand part of the Bill.