SPECIAL AREAS [MONEY].

HC Deb 09 March 1937 vol 321 cc997-1116

Considered in Committee under Standing Order No. 69.

[Sir DENNIS HERBERT in the Chair.]

Motion made, and Question proposed, That it is expedient to continue the Special Areas (Development and Improvement) Act, 1934, until the thirty-first day of March, nineteen hundred and thirty-nine, and to make further statutory provision for—

1. (a) enabling the Commissioners, for the purpose of inducing persons to establish industrial undertakings in the special areas, to let factories in those areas for the occupation of such undertakings and to contribute for periods not exceeding five years towards the rent, income tax, and rates payable in respect of industrial undertakings hereafter established in places approved by the Commissioners within those areas, notwithstanding that any such undertaking may be carried on for the purpose of gain;
2. (b) enabling the Commissioners to make grants towards expenses incurred by local authorities in the repair or improvement of streets in any special area which are certified by the Minister of Transport as being wholly or mainly required for purposes other than those of through traffic, and to contribute towards expenses incurred by owners or occupiers of agricultural land in any special areas in connection with the execution of works of field drainage notwithstanding that the land is occupied for the purpose of gain;
3. (c) enabling the Treasury to give financial assistance for any area outside the special areas, as to which the Minister of Labour certifies that there is and has been for a considerable time severe unemployment in the area, that without such financial assistance there will be no immediate likelihood of a substantial increase in employment in the area, and 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:
• Provided that such financial assistance shall only be given either by means of subscription to the share capital of site-companies incorporated for the purpose of providing factories in such areas with a view to inducing persons to establish industrial undertakings therein, or by means of loans to such companies, and the assistance provided to any such company shall not exceed an amount equal to one-third of its paid up share capital exclusive of any share capital held by the Treasury;
4. (d) enabling the Treasury to provide financial assistance, not exceeding in the aggregate two million pounds, by way of loan to persons carrying on industrial undertakings which are hereafter established in any special area or, in the case of industrial undertakings occupying factories provided by site-companies, in any such area as is mentioned in the last foregoing paragraph of this Resolution;
998
5. (e) the payment of moneys provided by Parliament of any sums required for the purposes aforesaid; and
6. (f) supplementary and consequential matters.

In this Resolution the following expressions have the meanings hereby assigned to them— 'Commissioners' means the Commissioners appointed under the Special Areas (Development and Improvement) Act, 1934, and 'special areas' means the areas specified in the First Schedule to that Act; 'Site-company' means a body corporate established for the purpose specified in paragraph (c) of this Resolution, 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."—(King's Recommendation signified.)—[Mr. Ernest Brown.]

3.55 p.m.

Mr. Batey

On a point of Order. There are over 20 Amendments on the Order Paper. Are we to understand that all these Amendments are out of order? I wish to direct attention especially to the first Amendment in my name—in line 4 after "of," to insert: re-opening coal mines in the Special Areas and in any areas outside and of. It seems to me to be almost impossible for the Chair to rule that Amendment out of order. The Resolution in line 4 makes provision for enabling the Commissioners, for the purpose of inducing persons to establish industrial undertakings in the Special Areas to do certain things. All I am seeking to do is to include the re-opening of coalmines among the purposes of the Commissioners, and it seems to me that that could be done without contravening the Standing Order.

The Chairman

The hon. Member's Amendment proposes an additional method of expending the money which is outside those covered by the King's Recommendation.

Mr. Batey

I thought, Sir Dennis, that that was what was in your mind, but the Amendment does not do any such thing. No extra cost is involved in this Amendment. As a matter of fact, one or two big collieries have been re-opened in Whitehaven without a penny of expenditure by the Government.

The Chairman

The hon. Member is now proceeding to argue a point which is entirely outside the Ruling I have given. I said that his Amendment proposed expenditure on an object which is not covered by the King's Recommendation. That is the reason why it is out of Order.

Mr. G. Hardie

Paragraph (a) of the Resolution refers to the establishment of industrial undertakings in the Special Areas. Is a mine not an industrial undertaking; and where is it specified in the Resolution that mines are outside the objects which may be undertaken by the Commissioners? Is it your Ruling, Sir Dennis, that a mine is not an industrial undertaking?

The Chairman

I am not called upon to give a Ruling on the point which the hon. Member has raised.

Mr. Ellis Smith

I followed the Debate yesterday, and from it I understood that Amendments would be in order provided they did not cause any additional cost.

The Chairman

I do not know what the hon. Member may have understood from the Debate, but on this point he is to understand that there is a decision of the Chair which I have, I think, stated quite clearly.

Mr. Batey

Do not let us be in too great a hurry about this. Your Ruling on this point, Sir Dennis, is narrower than any Ruling I have ever heard before on these matters, and it is a serious Ruling. It means that we cannot go outside the Money Resolution, that we must accept the purposes set forth in that Resolution, and that we shall have to accept a similar restriction when we discuss the Bill. Some of us who come from the Special Areas are not going to accept that position. We are here to represent the Special Areas and we are going to discuss the Special Areas, and we want the opportunity, either on the Money Resolution or on the Bill, of seeking to increase the purposes for which the Commissioners may use this money. I hope, therefore, Sir Dennis, you are not going to rule as narrowly on this point as you have indicated.

The Chairman

I have given my Ruling in accordance with the well established practice of the House. It is the repetition of a Ruling which I gave at considerably greater length on the Resolution in reference to the Bill of 1934. I cannot do otherwise than repeat that Ruling.

Mr. James Griffiths

In conformity with that Ruling would an Amendment to extend the scheduled areas and to include areas not now scheduled be ruled out of order?

The Chairman

There is no question about it. It would certainly be out of order.

Mr. Griffiths

Is it not possible to extend the areas already scheduled? Would such an Amendment be ruled out of order?

The Chairman

I am sorry that hon. Members do not seem to understand the basis of the Ruling with regard to the King's Recommendation. It is not a question of increasing the charge. Parliament can vote money only on a Recommendation from the Crown and when the Crown recommends the grant of money for a particular purpose, subject to certain conditions, it is outside the Recommendation to say that that money shall be used for other purposes or under other conditions. It is not a question of the charge at all; it is a question whether the Amendment goes outside the Recommendation on which the Resolution is based.

Mr. Griffiths

The Amendment on the Paper in my name referring to one area will not change by one comma the object of the expenditure but will merely change the boundaries of an area. Do you rule that an Amendment to change a boundary is an Amendment to change the purpose of the Bill and is out of order?

The Chairman

A Ruling which was given and accepted by the Committee to that effect was given in 1934—exactly the same Ruling as I am giving now.

Mr. Batey

In December when it was proposed to include the Special Areas Act in the Expiring Laws Continuance Bill we made a strong stand against the proposal, because we come from the Special Areas and we know that nothing has been done. We did expect that we would have a chance of amending the new Bill and of getting something done. Seeing that your Ruling prevents us from doing that and makes this Debate futile, we would do far better as a party by leaving the House altogether. As the Debate will be so futile to us under your Ruling, I beg to ask leave to move "That the Chairman do report Progress and ask leave to sit again," in order that the Government may reconsider the position.

The Chairman

No, I cannot accept a Motion to report Progress as a result of a Ruling which has been given by me and by others in the Chair repeatedly. It is not as if this was a new question at all. I am not in any way responsible for the position in which the hon. Member finds himself. It seems to me to be a question which the hon. Member can raise in Debate. His particular grievance, if I may put it in that way, is not a grievance against the Chair. [HON. MEMBERS: "No, no!"] I am not speaking personally. It is not a grievance for the moment against the procedure of the House. Therefore, it is not a matter to raise on a point of Order with the Chair.

Mr. Dalton

Further to the point of Order. It is a grievance against the Government because of the way they have drafted this Resolution. The very clear Ruling you have now given and which of course we accept, has brought out even more clearly the very restricted and indeed ridiculous scope of the Debate. Is my hon. Friend not in order in making his protest against the way in which the Government have drafted the Resolution?

The Chairman

The hon. Gentleman knows quite well from his experience of the House the object of a Motion to report Progress. In view of the Debate which took place on this matter last night I cannot accept a Motion to report Progress.

Mr. N. Maclean

I wish to ask for guidance for myself and others who had proposed to take part in the Debate. If in a district where in the past coal mining has been the principal industry an effort is made to induce someone either to sink or open a coal mine, do we understand from your Ruling that such an individual will be debarred from participating in any of this Fund?

The Chairman

That again seems to be a matter for Debate and not for the Chair.

Mr. Maclean

That exactly is what the position will be if your Ruling is carried into effect. You have already stated that there is ruled out of Debate any coal mining undertaking that is to receive financial assistance, and now the Amendment of my hon. Friend is ruled out of order and cannot be debated.

The Chairman

The hon. Member is under some misapprehension. The fact that an Amendment is out of order does not mean that the contention of that Amendment, if I may put it in that way, is a thing which cannot be debated. Those matters can be debated on the Resolution, but it is not in order to move Amendments to that effect.

4.9 p.m.

Mr. Garro Jones

Without in any way impugning the impartiality of your Ruling, may I draw your attention to the fact that although this matter was discussed yesterday it is only your very clear Ruling this afternoon which has brought the House up against the extraordinary position that hon. Members are not only not allowed to move Amendments to the finance of this Resolution, but they are not allowed to propose any Amendments which alter in any way the purposes and conditions which are laid down in this Resolution. That being so, although this matter was discussed at great length yesterday, the House quite clearly finds itself in a perfectly ridiculous position, because although these points may be discussed, discussion without Amendment is absolutely futile; it enables the Government to say, in reply to all these proposals, that they are quite useless because they are out of order and that the Government, therefore, are not able to do anything upon them. We are merely wasting our breath if we discuss these things. I submit that although it may bring the Government into a fresh difficulty that is not our object on this occasion. Our only object is to secure adequate discussion of a matter which is of immense import to everyone on these benches. Complaint has been made not only from these benches but by every impartial hon. Member that the Resolution is too restricted. Therefore, without in any way impugning the impartiality of the Ruling you have given, I suggest that it brings the House into an impossible position, and that in order that the House may examine the position in which it finds itself you should accept the Motion to report Progress and ask leave to sit again.

The Chairman

I cannot accept the hon. Member's statement as to the effect of my Ruling. With regard to the rest of what he said, I see no reason to alter the decision that I have given. At this stage I cannot accept a Motion to report Progress. Perhaps I may add, though it is only repeating what I have said in answer to the hon. Member for Govan (Mr. Maclean) that some hon. Members seem to be still under a misapprehension as to the possible scope of the Debate. The Ruling I have given does not limit the scope of the Debate. It does not limit the arguments of hon. Members or the statement of their reasons why the House should not pass the Resolution. I want to make that quite clear.

4.12 p.m.

Mr. J. Griffiths

Suppose that we take part in the Debate and suppose that we put up a convincing case for certain changes to be made and for certain areas to be brought in, will it then be permissible to move our Amendments upon the Bill when it is brought forward, or will the Amendments be governed entirely by this Ruling. Will you give a Ruling as to whether the Amendment in the name of myself and several other hon. Members, on page 1611, calling for the appointment of a Minister of Cabinet rank to take charge of this work, is to be ruled out of order?

The Chairman

The hon. Member's first question was whether if he put forward an absolutely convincing case an Amendment to carry out that upon which he convinced the House could be moved to the Bill. The answer to that question is, "No." I hoped I had already made it clear that if hon. Members convinced the House that this Resolution was not a satisfactory one, they could persuade the House not to pass the Resolution. That is the position. In such circumstances it would be open to the House to pass some other Resolution, but, as the hon. Member knows, such a Resolution could be introduced only by the Government. If the hon. Member were to succeed in convincing the House on the matter the Resolution would presumably be defeated and a new Resolution brought in to carry out what the hon. Member had convinced the House was the right course.

Mr. Grenfell

Assuming that we get the broad freedom of debate that you suggested just now, suppose that the House does not debate the general question but certain points of criticism which the majority of Members are convinced should be embodied in the Financial Resolution on their merits, is it competent then for the Government to withdraw their own Financial Resolution and to introduce an amending Resolution?

The Chairman

Certainly. The hon. Member is only repeating in other words what I have said. If the Committee defeats the Resolution or the expression of opinion is so strong that the Government withdraw the Resolution, of course the Government can then introduce another Resolution. The hon. Member asked another question which I have not answered. He asked me for a Ruling with reference to the Amendment to provide for the appointment of a Minister of Cabinet rank to be directly responsible for the administration of that Act, and for further Measures for the economic development and social improvement of the Special Areas. That Amendment is out of order because of the latter part of it, which prevents me having any doubt on the subject. If the Amendment had stopped at the word "Act," I should have felt no doubt about it, and I should probably not have ruled it out of order.

Mr. J. Griffiths

Will you accept a manuscript Amendment containing the first part and leaving out the latter part?

The Chairman

The hon. Member will perhaps make out the Amendment and hand it in. I would like to see it in writing.

Mr. Lees-Smith

With regard to the Ruling you have given as to your acceptance of a Motion to report Progress. I gather that you cannot accept it arising directly out of a Ruling from the Chair, but if in the course of the Debate it becomes apparent that the Debate is very restricted on account of the circumscribed nature of the Financial Resolution, I would ask you whether the Ruling you have given would necessarily preclude a Motion to report Progress?

The Chairman

That is a hypothetical question. I should never say before a Debate has commenced that I would never accept a Motion to report Progress in the course of the Debate. Indeed, when I refused to accept that Motion a few minutes ago I distinctly used the words, I think, "at this stage" or "at this time." That was before the Debate had commenced.

Mr. Batey

You rather put me in a quandary. You ruled my first Amendment out of order because you said it did not come within the Money Resolution. Now you tell my hon. Friend that he can move the first part of his Amendment although it is not within the Money Resolution. If he can move his Amendment, why should not I be allowed to move mine? We are getting into such a mess with this Resolution that it would be far better to allow us to move our Amendments.

The Chairman

I should be very sorry that the hon. Member should find himself either in a quandary or in a mess, but, as far as I am concerned, I do not find myself in the slightest degree in a mess. I see no reason to alter my rulings. At some later stage I may have an opportunity of explaining them at greater length to the hon. Member, but at the moment I can only say that I have given them as clearly as I can and that I must adhere to them.

Mr. Hardie

The question here is what is to be understood as industrial under-takings—

The Chairman

The hon. Member had better wait until we come to that question.

The Minister of Labour (Mr. Ernest Brown) rose—

4.21 p.m.

Mr. Gallacher

On a point of Order. I should be glad if you can make it clear what will be the position if we convince the Committee on the correctness of an Amendment and that there is a possibility of the Bill being defeated, although it will not be possible to get the House to agree to defeat it. That would mean a defeat of the Government. We might get the House to agree in a general way that the idea that we are putting forward ought to be accepted, but find that the Government insist on getting their Measure through. Does that mean that, however desirable a proposal is, we shall be unable to get it put into the Bill?

The Chairman

The hon. Member is now going into the question of merit, which is outside any point of Order that can be raised at this moment. If there was a point of Order in what he said, it was one which has already been put to me and about which I have already given an answer, namely, that the Amendments which are out of order on the Resolution would be equally out of order on the Bill. It was on that point that I suggested, in reply to another hon. Member, that the only course was to convince the House of the advisability of not passing the Resloution.

Mr. Gallacher

Is it not permissible for me to draw attention to the fact that we are being put in an absolutely impossible position?

The Chairman

It is not permissible for the hon. Member to draw attention at this time to facts which would be more properly dealt with in the Debate.

Mr. Gallacher

I will put it in this way. If it is felt in the House that we have made an exceptionally good case for an Amendment and the Government refuse to do anything but use their Whips in order to insure the carrying through of the Bill, can we have any recourse between now and the coming in of the Bill to get that proposal accepted?

The Chairman

The hon. Member is asking me to reply to him on matters which are entirely outside the duties of the Chair. I really think that I cannot have any further points of order or any more discussion on points on which I have given rulings.

Mr. Garro Jones

The House has found itself, as a result of the discussion in the last few moments, in a fresh difficulty. Hon. Members have asked whether, if a suitable case is made out, the Government themselves will adopt the initiation of the charge proposed by hon. Members on this side. Several right hon. Gentlemen on the Government Front Bench nodded eagerly in acceptance of that proposal. The question I should like to have elucidated is how is the Front Bench to know whether there is a sufficient volume of opinion to warrant them in accepting that new proposal and initiating the necessary charge?

The Chairman

If the hon. Member considers for a moment, he will realise that his question is an abuse of the right—[HON. MEMBERS: "Oh!"]—perhaps hon. Members will allow me to continue—an abuse of the right to raise questions of order. The hon. Member knows perfectly well that when the House has a question before it, it is for the House to decide in the usual way according to its usual procedure. There is no question of order arising in such a matter as that.

Mr. Garro Jones

You have failed to appreciate the force of my point, which I must repeat because it goes to the root of the soundness of the procedure of this House, and the Committee ought not to leave it until the matter is settled. I am asking whether, if proposals are brought forward and a case is made out for them, the Government will adopt them. Members of the Government have indicated by nods that they would adopt them, and I am asking how the Government are to decide whether a case is made out or not if no vote is to be allowed? Is it to be decided by the loudest Member—

The Chairman

Order! Really the hon. Member must allow me to say that that is not a point of Order at all. It is a question the answer to which he must discover if and when he gets the opportunity in the course of the Debate. I certainly cannot give anything in the nature of a Ruling as to what is going to be sufficient to persuade the Government or to persuade hon. Members in any part of the House. Mr. Ernest Brown.

Mr. Hardie rose—

The Chairman

I must now ask the Committee to proceed with the business. I cannot have any repetition of these points of Order. I have given my Rulings and other matters had better be left until they arise in the course of the Debate.

Mr. Hardie

May I ask your guidance why this Financial Resolution is not accompanied by an explanation of the word "factory"?

The Chairman

The hon. Member is asking me a question which has nothing whatever to do with the Chair. It is not the first time he has done it, and I must ask the Committee to proceed.

4.27 p.m.

Mr. E. Brown

I now rise to speak on the Financial Resolution—[HON. MEMBERS: "Take it away."] Its object is to give further aid to the Special Areas and to some areas which are not in the present Act. The Bill which will follow will be almost wholly concerned with financial matters. We are asking the Committee to pass the Resolution so that the Government may bring in a Measure which will have the following aims—to continue all existing arrangements under the Special Areas Act until 31st March, 1939; to give the Commissioner power to encourage new industrial enterprise in the Special Areas; to provide financial assistance for new undertakings in the Special Areas; to enable the Commissioner to assist certain road, street, and field drainage works in the Special Areas; to provide financial assistance for the provision of factories in certain other areas suffering from heavy and prolonged unemployment; and finally to enable the Treasury to provide financial aid to new undertakings both within and without the Special Areas—[Interruption.] Perhaps the hon. Member for Spennymoor (Mr. Batey) will wait until I have stated the case, when he will find that there is more aid than he thinks.

Mr. Logan

On a point of Order. At this stage—I do not really know the procedure of the House—I want to ask, in view of the fact that we will not be able to move Amendments and that we must either reject or accept in toto the Resolution, whether it would be possible to take a vote of the Committee now without any further discussion.

The Chairman

That matter has been dealt with already.

Mr. Logan

But, Sir Dennis—

The Chairman

I must ask the hon. Member to resume his seat. I have refused to deal with his point as a point of Order.

Mr. Logan

I have a right as a Member of this House to ask—

The Chairman

If the hon. Member wishes to put another and quite different question of order to me, which is not one on the subject that I have already dealt with, I will hear him. Although he has a right to rise to points of Order, there is no right to disobey the instructions of the Chair in regard to points of Order.

Mr. Logan

I am not disobeying your instructions. I have listened to your Ruling, and I express no dissension, but in regard to the time of the Committee, and understanding your Ruling, I ask, from the point of view of expedition, which is a different question entirely, is it not possible to save the time of the Committee, seeing that we must accept your Ruling, to put the question to the Committee without further discussion?

The Chairman

Mr. Ernest Brown.

Mr. Brown rose—

Hon. Members

Divide.

The Chairman

I must ask hon. Members at least to give the Minister a chance to state his case.

Mr. Mainwaring

On a point of Order. Since the attitude adopted by the Government renders our presence here this day utterly valueless, are we not in order—

The Chairman

Order.

Mr. Logan rose—

The Chairman

I have already stated that I cannot deal further with other points such as those which have lately been made. [An HON. MEMBER: "I move that the Question be now put."] I am afraid now that it is my duty, in order to do my best to preside over the conduct of this Debate, to say that I must ask hon. Members not to continue to interrupt the Debate by such points as those which have been raised for the last 10 minutes or more. If hon. Members decline—[HON. MEMBERS: "Divide"]—to accept that intimation from the Chair, I am afraid that I shall have to put in force the ordinary powers of the Chair and to ask them to resume their seats.

Mr. Brown rose—

Hon. Members

Divide.

Mr. Logan

On a point of Order—

The Chairman

I must ask the hon. Member for the Scotland Division (Mr. Logan) to remain in his seat.

Mr. Logan

On a point of Order—

The Chairman

I must ask the hon. Member for the Scotland Division to resume his seat.

Mr. Brown rose—

Hon. Members

Divide.

The Chairman

I really want to make an appeal to the Committee at least to allow the Government spokesman—[HON. MEMBERS: "Why?" and "No"]—in the ordinary interests of Debate, to make his speech.

Hon. Members

No.

Mr. Brown rose—

Hon. Members

Divide.

Mr. Denville

On a point of Order—

The Chairman

Is it a new point of Order?

Mr. Denville

I would like to ask for your Ruling whether it is in accordance with the best British traditions to make a noise like that and not listen to the Minister.

Mr. Brown

As Members are aware, during the last two years special efforts have been made in areas scheduled in the Act of 1934, which is known as the Special Areas Act. [HON. MEMBERS: "Divide."] During that time an experiment has been undertaken through two Commissioners, one having the oversight of the Special Areas in England and Wales, the other having the care of the areas scheduled in Scotland. [HON. MEMBERS: "Divide."] The White Paper gives an outline of the measures which are the result of these experiments and figures as to their potential cost. [HON. MEMBERS: "Divide."] It shows how baseless is the assertion continually heard in some quarters that nothing has been done for the Special Areas.

Mr. Buchanan

May I rise to a point of Order? With all due respect, I would say, first of all, that I can hardly hear a single word that the Minister is saying, but I want to ask quite seriously whether it is in order for me not to hear him. Secondly, I understand there is a Ruling against the reading of speeches, and I want to ask, in view of the fact that the speech is being obviously read, what is your Ruling in regard to it.

The Chairman

My Ruling on that is quite obviously that a chance ought certainly to be given to hon. Members to hear the right hon. Gentleman's speech. Though the reading of speeches is forbidden by the Standing Orders, hon. and right hon. Members are permitted to make copious use of notes, and, further to that, it is the recognised practice of the House that members of the Government, when they have important statements to make, should, for greater accuracy, have those statements written out.

Mr. Attlee

On a point of Order. Surely the latter part of your statement refers to definite statements of Government policy and not to a longish speech explaining a Bill, and this House ought not to have long statements read to it, but there ought to be only a use of notes.

The Chairman

Perhaps the right hon. Gentleman will ask me that question again, if there is reason for it, when the right hon. Gentleman has made a long speech.

Mr. Attlee

May I ask you, Sir Dennis, whether the right hon. Gentleman has been making an important statement of Government policy?

The Chairman

That, no doubt, is a matter of opinion, to be judged by those who heard it.

Mr. Brown

I was pointing out that the original criticisms which we have had were not well founded. In the first month after the Act of 1934 was passed it was contended that the total sum available for the Commissioners for this work in the hard-hit areas was £2,000,000, but the White Paper makes it quite clear that that statement was wholly inaccurate, and that the original grant of £2,000,000 was succeeded by one of £3,000,000 in the Vote of 1936, and that has been succeeded again, in the Estimates for 1937, by a sum of £3,500,000. I would also point out that the Commissioner in England and Wales has already entered on commitments to the total amount of £9,000,000, and the Commissioner in Scotland on commitments of about £2,000,000, or a total of nearly £11,000,000. I need not go at length into the measures which are set out in paragraphs 3, 4, 5, and 6 of the White Paper, but the Committee will note that the Government have said from the beginning that the recovery of these areas would only arise in one of three ways, either by a revival of old industries, or by the establishment of new industries, or by the transference of those for whom there was no work available in the areas where they lived to areas where work was available.

Mr. MacLaren

Platitudes.

Mr. Brown

Quite likely, but a platitude is an uncomfortable truth, and it is much easier to press for a general cure for a problem of this extent and gravity than to accept platitudes which are the facts of the situation. The Government have taken steps, with regard to the inducement of new industries to the areas which have long based their economy on one industry, or at the most on two industries. The Special Areas Reconstruction Act was passed last year in order to meet a want which the Commissioner had pointed out, and which other quarters of the House had brought to the knowledge of the Government, and that Act was passed for the purpose of giving financial assistance to small industries to establish themselves in the Special Areas. Although, partly because of the necessity for local organisation and partly because of the time necessarily taken in investigation of original applications, the Association has only been in full operation for four months, it has already agreed to make 54 loans, which, subject to the settlement of details in some cases, amount to £315,100 in total. As the House knows, there is a revolving fund of £1,000,000 provided under this Act.

Let me point out in a sentence the salient facts of what has happened in the matter of Government contracts in the Special Areas and the areas known in the Ministry of Labour as depressed areas. The value of Government contracts given to those areas already amounts to £41,000,000, of which sum £24,000,000 has gone to the Special Areas. That is the latest figure for Government contracts since the establishment of the Act of 1934 for the benefit of the Special Areas.

Mr. S. O. Davies

Can the Minister tell us what proportion this £41,000,000 bears to the total value of the contracts?

Mr. Brown

Not now. If the hon. Member raises the question in Debate later, perhaps I may be able to get him that information. The Defence programme has also played its part in altering the conditions as regards the possibility of providing work in the Special Areas. Perhaps I may give the following summary of what has been decided with respect to Government factories in South Wales, in the North-East Special Areas, in Lancashire and in Scotland. In South Wales there are to be a filling factory, a petrol tin factory, a bomb factory and a mines depot. In the North-East Special Areas there are to be a cartridge factory and a munitions factory. In Lancashire there are to be a filling factory and magazines, a shadow aircraft factory, and a factory for the manufacture of variable-pitch airscrews. A factory for the manufacture of respirators is already in operation. In Scotland there are to be two new explosive factories and an extension of an old one, a petrol tin factory, the extension of a plant for making armour plate, and a torpedo factory. This list shows that in designing the plans for Defence work the Government have had regard to the Special Areas and to areas which have suffered long and continued unemployment.

That does not exhaust the list of possibilities. I notice that a number of Members who treat this lightly are themselves quite keen to get factories in their own areas. I would point out that the Government's Defence programme as it develops is bound to provide further opportunities for locating factories in these areas, and I assure the Committee that full advantage will be taken of all such opportunities, subject always, of course, to the over-riding considerations of strategy on the one hand and the time-factor on the other. In addition to that, the Defence programme is likely to have increasing effect upon the Special Areas, and it may interest the Committee to know that whereas in the Special and depressed areas during the whole of the financial year 1935–36 the orders amounted to £17,000,000, in half the year 1936–1937 the orders have amounted to £19,000,000. [Interruption.] I am pointing out the cumulative efforts on the part of the Government in attacking this problem from many sides.

Before I sit down, I hope to have the opportunity of pointing out that the efforts which have been made in order to induce the heads of private firms to go to the Special Areas is at last beginning to bear fruit. Surely we are entitled first to make the case that there has been a cumulative effort on the part of the Government to attend to the needs of these areas, whether from the point of view of providing finance for small industries or establishing Government factories, or through the orders which have come to them as a result of the defence programme. I should like to add, with regard to the incidence of rates in those areas, though I do not want to discuss it in detail, because it has recently been discussed in the House, that the new block grants which will result in substantial assistance to the local authorities in these areas, are another contribution to aid them in meeting the situation in which they have found themselves in these recent difficult times.

Mr. Shinwell

I am sorry to interrupt the right hon. Gentleman, but he is making a strong point about the block grant, and saying that it is a special contribution by the Government to the solution of the problem.

The Secretary of State for Scotland (Mr. Elliot)

So it is.

Mr. Shinwell

If the Secretary of State for Scotland will restrain himself, perhaps the Minister will make a responsible reply. I ask whether there is any Government money involved in the revision of the block grant?

Mr. Brown

Undoubtedly there is Government money, and, more than that, there are two sides to the situation. First of all there is the amount of Government money involved, and then there is the money which other areas outside these areas might have been entitled to look for in view of the terms of the Act of 1929 but which they have foregone. Therefore, these areas have found sympathy not merely on the Government benches but in Government action as it affects other areas outside.

Mr. A. Jenkins

There is no Government money.

Mr. Brown

I was asked to answer a question and I have given an accurate answer. [HON. MEMBERS: "No."]

In surveying this problem it was clear that there were areas outside the ambit of the Special Areas Act which had a long continued and heavy weight of unemployment. There are areas with a weight of unemployment as high as in the areas inside the Special Areas Act, and some, as a matter of fact, have an even higher weight of unemployment than certain of the areas which are scheduled. We have received a number of representations from all kinds of areas for inclusion within the Special Areas Act. I would point out, however, that some of those who made representations for aid with the primary object of establishing new factories made it very clear that while they desired aid they did not want to be labelled either "distressed," "depressed," or "special," that they would desire to have that aid without inclusion within the Act.

Let us consider the question from the point of view of inclusion in or exclusion from the boundaries of the Special Areas Act. The major issue which those who desired aid but not label raised with us was the need they felt for aid in the acquisition, the clearance and the preparation of sites, or the pulling down of old mills and factories and their replacement by new factories. They said that if aid could be given for this purpose they did not desire inclusion within the Act. We have had many surveys and analyses of this problem since the University Survey in 1931 which, as the House knows, was assisted by the Board of Trade, and I should like to look at the problem inside the areas first and then outside, with at view to establishing the fact that whether they are inside or outside there are no two areas alike in history, in character, in need or in possibilities.

Take the four areas which are now the Special Areas, Cumberland to take the smallest first, the West of Scotland, the North-East Coast, and South Wales. Let me point out the difficulty which is bound to arise through the variety of circumstances to be found in those areas. In Cumberland they have an industrial area which is not a very large one and with not a very large number of unemployed but those unemployed are concentrated in a number of small towns and villages where the problem becomes a heavy and pressing one. It arises from two main causes, first the closing down of collieries there, and second, the ill-fortune which has recently attended certain iron-ore mines in that area. With regard to the collieries, I was able to announce last Thursday that owing to the new arrangements of the Special Areas Reconstruction Act, Lord Nuffield's munificent fund and the Government, together with the Lowther Estates, Limited, and the Coltness Iron Company, it is now proposed to reopen those collieries and in the end to obtain full production.

Mr. Lawson

The right hon. Gentleman is raising an important point here. He claims that the Government and the Special Areas Reconstruction Act are responsible for the re-opening of those collieries. Will he tell us what the Government have done, and what the Special Areas Reconstruction Act has done?

Mr. Brown

We say that the whole arrangement has been the result of discussions which have taken place between the Reconstruction Association, the Nuffield Trustees, the Government and all those concerned. It is a result of long and, indeed, prolonged discussions that this happy state of affairs has occurred. Surely hon. Members in all parts of the House are glad that there is a brighter prospect for this district.

Scotland, on the other hand, has a very different problem. It has a much more uniform experience of unemployment, and I think it will be a fair generalisation to say with regard to Scotland that the Special Areas of Scotland are not so much black as grey. In Scotland there are fewer extremes than are to be found either in Cumberland or Durham or South Wales, and the area adjoining Clydeside has seen a remarkable improvement in the last two years.

Durham, of course, shows a great variety of conditions. On Tyneside, as all Members know, there has been a very great improvement, and other parts of the northern half of Durham are feeling that improvement. But Members who have read the report presented to the Commissioner by Sir Alexander Gibb and Partners will know from that frank report that south-west Durham shows no improvement at all and has a particular problem about which I intend to say something before I close my speech.

Mr. Dalton

I hope the right hon. Gentleman will tell us before he sits down whether or not the Government accept the outline of ideas contained in that Gibb report.

Mr. Brown

If the hon. Member will wait until I come to that part of my speech he will find that I have an announcement which I think will interest him, even if it does not satisfy him.

With regard to South Wales the difficulties are rooted in two problems. The early development of that district began in places on the heights. Towns on the heights, like Merthyr, Tredegar and Blaenavon prospered with charcoal, iron and coal, and flourishing industries grew up. Charcoal has passed away, the industrial centre of gravity has moved from those places on the heights, with the result that the situation is now entirely different. The movement has been down from the heights to nearer to the coast, and in some cases to the coast. The other side of the South Wales problem is that of a sudden, sharp reversal of the fortunes of their wonderful export trade in coal. The result is that South Wales has concentrated a larger number of unemployed in those areas in density, over-all, unexampled, I think, in any other part of Great Britain.

I should like to refresh my mind about an analysis that I have made of the unemployment in the Special Areas. On the North-East Coast and in Northumberland there are 41 Special Areas, in West Cumberland 13, in Scotland 42, and in South Wales 38. I would ask the Committee's close attention to the figures that I am about to give. I have divided those areas according to the unemployment as registered at the Exchanges into three categories: those towns and villages with less than 20 per cent. of unemployment, those with between 20 and 30 per cent. inclusive, and those with more than 30 per cent. of unemployment for the period January to December, 1936. From January to December, 1936, in the 41 districts of the North-East Coast and Northumberland, the districts with under 20 per cent. of unemployed were 10; between 20 and 30 per cent., 15; over 30 per cent., 16. In West Cumberland, of the 13 towns and villages there were two with under 20 per cent. of unemployment, two with between 20 and 30 per cent., and nine with over 30 per cent. of unemployment. In the 42 areas of Scotland there were 20 with under 20 per cent. of unemployment, 13 with from 20 to 30 per cent. of unemployment and 19 with over 30 per cent. of unemployment. In the 38 areas of South Wales there was one with under 20 per cent. of unemployment, five with 20 per cent. and under 30 per cent. of unemployment, and 32 with over 30 per cent. of unemployment.

Those figures bring out very vividly the immense variation there is in the conditions in areas which are inside the Special Areas Act. More than that, they make it perfectly clear that in approaching any Amendment of the Act with regard to adding to the Schedule, any Minister of Labour and any Government ought to be quite sure that in doing that they do not lessen the chances of South Wales of getting new industries.

Mr. J. Griffiths

May I ask the right hon. Gentleman whether he is not aware that every authority and every counsel, including the survey for which the Commissioner is responsible financially, and which was published yesterday, say that to divide South Wales is the utmost folly?

Mr. Brown

That is another matter altogether. Perhaps the hon. Member will bear with me. There is some misunderstanding even there. It does not seem to be understood by some of those who have been criticising the boundaries of South Wales, that the Commissioner under the present Act has power to do things outside the boundary of the Special Areas, providing they will bring results in employment inside the boundaries of the Act. That is a misunderstanding even in the latest report; but seeing that the report was only issued yesterday, I cannot pretend to have read it yet. I have quoted the tables in order to point out that there is inside the Special Areas a very great difference in regard to the density of unemployment.

Let me turn now to the areas outside the present scheduled Special Areas. We have had numerous applications for inclusion, and I want to tell the Committee the kind of places from which the applications have come, either direct or through their Members of Parliament. Applications have come from Glasgow, Liverpool, Cardiff, Swansea, Newport, Hull, and Leith; from a mining area in South Lancashire, a mining area outside Barnsley, in South Yorkshire, a weaving area in North-East Lancashire and a number of smaller places, of which I will mention only two or three in order to bring out the infinite variety of the demand. Applica- tions have come from places like Anglesey and Kidsgrove in Staffordshire. It may startle the Committee to know that we have had applications for inclusion from a town like Bideford in North Devon, and from mining towns like Redruth and Camborne in Cornwall. It will, therefore, be seen that the problem of drawing out a formula and coming to a solution of what was best to be done was not easy.

I would ask the Committee, especially hon. Members from South Wales and the Special Areas, to remember that whatever view they may take of the other operations of the Commissioner, of a social kind, it is clear that there are a number of light industries springing up and that the real problem ahead of us is to see whether we can get a greater diversity of industries in those areas which have too long depended upon one or two industries. It is also true that there are not an unlimited number of these new industries.

Therefore, any Minister of Labour or any Government, faced with demands from more than 100 places so varied as those I have indicated, must have regard to two things; first, whether it was possible to draw up a statistical, scientific, industrial or practical formula which would be workable and fair as between one area and another, and, secondly, if we did that, should we not so dissipate our efforts as to deprive the very worst spots of the aid which the whole Committee would wish them to have? It was considerations of this kind and not considerations such as were urged in yesterday's Debate, that determined the Government to bring in a Financial Resolution designed to do two things: first, to meet the urgent demand, made not only by the Commissioner but by every student of this grave social and industrial problem, for the introduction of new industries, even if the methods adopted were unorthodox; and, secondly, to see whether we could not find a solution which would enable aid to be given to areas not inside the Special Areas without lessening the potential help which is so urgently needed by the Special Areas of South Wales, Durham, West Cumberland and Scotland.

Mr. Logan

If special powers by Act of Parliament are vested in a borough such as the City of Liverpool to attract special industries in regard to sites, would the money be given direct to the municipality, or to whom?

Mr. Brown

The hon. Member cannot expect me to give any judgment in favour or against any area, but the Financial Resolution makes it clear that it must be a public utility company.

Mr. Logan

This is a matter which is interesting the people of Liverpool. There will be two parties who will be able to finance the companies that may go there and I am wondering whether any adjustment can take place to avoid there being two competing parties in one city.

Mr. Brown

Perhaps the hon. Member will allow me to deal with the matter in my own way. It will be more for the convenience of the Committee, and perhaps for his own convenience.

I have spoken of improvement in trade. There is a recovery going on in the Special Areas themselves, although there are some places, of which South West Durham is an outstanding instance, where there is no improvement. Nevertheless, the total figures show a great reduction in unemployment in the last year. The Committee will be interested to know that of the 61,000 drop in the unemployment returns published this morning, 10,143 of that reduction relates to the Special Areas. That shows that the cumulative efforts I have described are really beginning to have effect.

Sir Robert Aske

What proportion of those have been transferred to other areas?

Mr. Brown

The hon. and learned Member cannot expect me to answer a question of that kind off hand, but if he puts the question on the Order Paper we shall be glad to get the information. That reduction of 10,000 is inside one month. I would, however, point out that the amount of new industrial expansion to be achieved in a given time is not unlimited, and we feel that the existing Special Areas have the first call to the greatest practical extent upon whatever expansion there may be. Subject to that, we desire to help local initiative outside the Special Areas. That is the design of the Financial Resolution and of the Bill. Although there are differences of opinion about the policy pursued by the Commissioners, there is general agreement as to the desirability of establishing new industries, with one exception, and that exception is this: that complaints are already being received about the possibility of unfair competition by industries established in the Special Areas, with Government aid, under preferred conditions, with industries established elsewhere under normal economic conditions. The Committee should not overlook that fact in considering the boundaries prescribed by the Act. It is clear that while there is widespread feeling of sympathy in many parts of the country and in industry over the plight of those areas which I have described this afternoon, and which have been much in the public mind, and while I believe there is general agreement that what the Government proposes to do, if we pass the Financial Resolution, is well worth doing from the national point of view, yet if we were to spread this assistance too widely, the favourable atmosphere in industry would change. The Committee will no doubt come to the conclusion that the decision of the Government to do their best by way of maximum of effort for the towns and villages inside the Special Areas, while helping those who show local initiative outside those areas, was a wise and sound policy, and one of real alleviation for the Special Areas.

Trading estates have been established. The Team Valley Trading Estate has received 217 inquiries up to the 4th of this month, of which 66 have proved definitely unfruitful, 151 are still under discussion and 20 have resulted in definite orders. Seeing that this is a new experiment, that is a remarkable beginning. At Treforest—[Interruption.] Hon. Members who wish to put supplementary questions should remember that we have two days' debate, and that the questions can all be dealt with at the end. I am anxious to give the Committee an accurate picture of the situation.

Mr. Logan

How can the Minister do that unless he answers our questions?

Mr. Brown

Questions are not usually put during a speech, except on points of principle. The hon. Gentleman does not know—

Mr. Logan

The hon. Gentleman does know.

Mr. Brown

Perhaps the hon. Member will allow me to put my case. The organisation at Treforest has been in existence for a shorter time, but out of 66 inquiries 46 inquiries have been definitely unfruitful. [Interruption.] Sometimes, when a number of applications are made, it must be remembered that they are not all the kind of application that any wise body would be justified in admitting. The difficulty of this problem is to find new and creditworthy industries likely at the end of the period to be economic industries, so that the districts to which they have been induced to come may not find their last state worse than their first—

Mr. J. Griffiths

As with armaments.

Mr. Brown

Although the hon. Member does not agree with the policy of armaments, he and his friends would prefer to have the work, even though it is only for four or five years, than that that work should go elsewhere. The Government and the organisations which have been set up under the Acts, and through the finance provided by the Government, have begun a real attack upon this problem, not from the point of view of armaments alone, but from that of private new industries. No hon. Member will complain that those responsible for this great experiment should take a little time to make sure that the applications which they are now sifting are likely to prove of lasting good for those areas.

Mr. S. O. Davies rose—

Mr. Brown

If hon. Members did not interrupt me so much, we might get on a little more quickly.

Mr. Davies

The right hon. Gentleman made a statement about Treforest.

Mr. Brown

Hon. Members will admit that they have not made it too easy for me to-day, but I take things as they come. I will give hon. Members, if they will allow me to refresh my memory from the notes, the exact figures. Out of 66 inquiries 46 have been definitely unfruitful and 18 are still under consideration; five of them are in an advanced state of negotiation and agreements have been signed for two factories.

The Government have deliberately designed a policy of tilting the balance in favour of these areas for a temporary period. The Government and the Commissioners, in attempting to establish new industries in the Special Areas and those which are afterwards to be known as the certified areas, fully appreciate the necessity of having regard to the position of the industries concerned throughout the country. Dealing with the applications from intending manufacturers for the Government financial assistance which will be available under the proposals before the House, the Commissioners will have the advice of Lord Portal and his colleagues who are well acquainted with the nature of the problem. In any case in which they require additional information, and in all cases where they think it useful, the advisers will consult the appropriate trade organisation. I have made that statement to ease the path of those who desire to come to the Special Areas and certified areas in pursuance of this experiment.

The developments of policy are therefore three in number. The first is that, to meet the demand of the Commissioner, the Government have dealt with inducements to private industries. Secondly, special financial assistance is to be available where local initiative in appropriate areas outside the Special Areas, is forthcoming. The third development is that the Government are providing a fund of £2,000,000 by way of loan for the gap which it has recently been suggested may be found for industries which are rather above the range of the small industries covered by the Special Areas Reconstruction Act. If the hon. Member for the Scotland Division (Mr. Logan) will look at the Resolution on the Order Paper he will see a provision as to factories in the Special Areas in regard to rent, and it covers a contribution for as long as five years. Rent, rates and Income Tax are included for those inside the Special Areas. The position is that the Commissioner may in the exercise of his own discretion do any or all of the following things: He may purchase a site and let it, or build a factory upon it and let it, or he may pay a larger or smaller proportion of the rent or of the rates or of the Income Tax for the undertaking, for a term of years up to five. Those are important powers. It would not be going too far to say that they are unique powers. So far as my knowledge goes such wide discretion has never before been given to any individual. The Government are prepared to give to the Commissioner this wide power, and that fact should silence once and for all those who say inaccurately that the Government do not mean business about the Special Areas.

There is a limitation on the Loan Fund of £2,000,000, but I would ask hon. Members to notice that no limitation is proposed to the commitments into which the Commissioner may enter, except the limitation implicit in the maximum period of five years, and, of course, the general oversight of the Commissioner's activity provided in the Special Areas Act.

Mr. Dalton

With Treasury sanction.

Mr. Brown

That was mentioned in the Debate yesterday, and I need say no more about it. The Resolution deals with two minor matters, one is the filling up and the bettering of certain streets in the Special Areas. The other is the question of field drainage. In this connection, the Commissioner found a difference in the law on one side of the Solway as against the other. The Commissioner cannot assist field drainage in West Cumberland, but in future he will be able to assist schemes if they are desirable in the interests of the inhabitants of the Special Areas.

Paragraphs (c) and (d) give authority for new measures for the assistance of areas outside the Special Areas as well as for the provision of additional financial facilities for new industrial enterprises both in the Special Areas and outside. Perhaps I might reverse the order of these paragraphs in the Financial Resolution and ask Members to refer to paragraph (d). Under it, the Treasury will be empowered to provide financial assistance up to £2,000,000 in the aggregate by way of loans to new industrial enterprises which establish themselves in the Special Areas or in one of the certified and hard-hit areas outside.

Paragraph 20 of the White Paper explains that the Treasury will help in this new form of financial aid. Hon. Members will doubtless ask what liaison there will be betwen the various organisations. I would point out that it is proposed that the new advisers of the Treasury will be Lord Portal, Sir Nigel Campbell, and Sir Frederick Marquis. Lord Portal is chairman of the Special Areas Association and one of the trustees of the Nuffield Trust. Sir Nigel Campbell is also one of the trustees of the Nuffield Trust. Sir Frederick Marquis is one of the advisers recently appointed by the Commissioner to help him in his industrial policy in the Special Areas. This Committee will be able to provide the liaison to make sure that there is no overlapping.

Mr. Logan

Will the Minister answer a further question? I want to ease the situation and get information. Is it possible for the money to be given through this advisory body, in view of the fact that the municipality itself have given the advance and have already loaned money to other companies, having had special powers to do so.

Mr. Brown

The hon. Member is anticipating my explanation of the manner in which the site companies are to be aided. Paragraph (c) makes provision for the certification of areas of heavy unemployment, and for the establishment of site companies in those areas. The duty is imposed on the Minister of Labour of certifying any area, outside the Special Areas, which desires to take advantage of the benefits of the Act, as an area proper to be helped, and he is to be aided in that by the advice of an advisory committee. The conditions are, first, heavy and prolonged unemployment; secondly, that unless financial assistance is given to the area there is no immediate likelihood of a substantial increase in employment; and, thirdly, the area must be mainly dependent on one or more industries which cannot supply sufficient employment by reason of the general depression in those industries.

Mr. J. Griffiths

With regard to the last condition, may I cite two villages in my division which are dependent upon the steel and tinplate industries? These villages are completely depressed and derelict, but there is no general depression in those industries. Will it, therefore, be impossible to certify these areas because, although they are dependent upon industries in which there is particular depression in those areas, there is no general depression in the industries?

Mr. Brown

The hon. Member will understand that the Resolution has been drawn in this form in order to give flexibility to the matter. [HON. MEMBERS: "Oh!"] Certainly; if the Resolution had been drawn so rigidly that it had no flexibility, surely the complaint of hon. Members opposite would have been against its rigidity. It is impossible for me to say in advance what will happen in the case of any particular village. This is a matter of general definition in a Financial Resolution which is to be followed by a Bill and which lays down the guidance for the Advisory Committee who will consider any application.

Miss Wilkinson

The right hon. Gentleman is simply wrapping up the matter in words. Here is a crucial point, and he will not give an answer upon it.

Mr. Brown

No doubt the hon. Lady will speak later, and the House will be very glad to hear her. I am pointing out that the Resolution has been drawn in a flexible form so that it may provide guidance for the Advisory Committee, and if, inside the terms of that flexible guidance, the conditions are satisfactory to the Advisory Committee, the Minister will certify that particular area. It is not merely that; if there is sufficient local initiative in the area for the establishment of a site company, the grant will be given.

Mr. J. Griffiths

The right hon. Gentleman has not attempted to give a definition of the phrase "general depression." There is no general depression in the steel industry at the moment; the output is going up; but there are places where steel is not produced and never was produced. Will it be impossible to certify these areas because there is no general depression in the industry?

Mr. Brown

The answer, given in advance, is that that would be a matter of the common sense of the Advisory Committee in the light of the local circumstances. Surely that is the correct answer in advance of the investigation of any particular area.

The Commissioner has called attention to the fact of the excessive growth of London, and has expressed the opinion that further extension of industry in Greater London should be controlled, as a means of securing more even distribution of production, in which, he hopes, the Special Areas will share. This extension is occurring, not merely in London, but in other great cities, and it gives rise to grave problems, not merely of industry, but of health, communications, vulnerability from the air, and other problems that go far beyond the issue raised by Sir Malcolm Stewart. The Government feel that these wider issues deserve authoritative and comprehensive study, and they propose to appoint a Royal Commission for this purpose. [HON. MEMBERS: "Oh!"] The greater the importance that is attached by Members in various parts of the House to this grave problem, the more they ought to welcome a thorough investigation before any hasty action is taken. The terms of reference for such a Commission are now under consideration, and will be announced in due course, together with the names of those appointed to serve on it.

Another question is one, not of growth, but of decay. That is the problem of the decay of South-West Durham, to which special attention has been drawn in an expert report. I have already made it clear to the House that neither the Government nor the Commissioner necessarily agrees with the conclusions of that report, but it is at any rate the result of an objective, expert and frank examination of the problems in that area.

Mr. Dalton

Who were its authors?

Mr. Brown

They were appointed by the Commissioner for this purpose, and they represented one of the greatest firms of engineers in this country. I have no doubt that those who nave read the report and know the area will welcome the announcement that I am now going to make. I am happy to announce that it has been decided to set up a small executive board, consisting probably of three members, to be known as the South-West Durham Improvement Association. The duties of this body will be to investigate the economic possibilities of the area, to undertake a certain amount of site clearance, and to improve the general appearance of the district by the removal of derelict buildings and other measures. They will also give special consideration to the problem created by the existence of small and relatively isolated villages where there is little prospect of industrial development. This body will work in close co-operation with the local Development Council, the North-Eastern Trading Estates Company, and the North-Eastern Housing Association, and the necessary finance will be found by the Commissioner out of the Special Areas Fund. This is a decision which I am sure will on reflection give great satisfaction to hon. Members opposite who know the area, and to the area itself.

The clearance of sites for new factories is a matter to which the late Commissioner attached great importance in certain areas. In particular he was interested in the problem of Tyneside improvement, and the Government have decided to authorise the Commissioner to proceed with the clearance of a number of sites on the banks of the Tyne, where, in the words of the late Commissioner: The ruins of old factories are not merely hideous to the eye, but must have a deterrent effect on those who are thinking of starting new enterprises on the banks of this great river. The work will be carried out by the Tyne Improvement Commission with the assistance of a 100 per cent. grant from the Commissioner. As was indicated in the Third Report of Sir Malcolm Stewart, a comprehensive scheme for the development of East Gateshead has been drawn up by a firm of consulting engineers, and the Government have adopted the scheme, which is designed to make an important contribution to the industrial development of the area. It is proposed that the work should be carried out by the North-Eastern Trading Estates, Limited. With regard to Western Cumberland, the Government have come to the conclusion that this is not an area suitable for a trading estate, but they have had regard to the local circumstances, and have decided to set up a company, not trading for profit, to be known as the West Cumberland Industrial Sites Company, to provide factory accommodation for firms desiring to establish themselves in that area. It is intended that the company should clear sites and build factories to order, but, naturally, if a demand arises from a certain number of firms for factories in the same district, there is no reason why these factories should not be grouped if a suitable site is available. The capital for this company will be provided by means of loans from the Special Areas Fund, as in the case of the Trading Estate Companies.

My right hon. Friend the Member for Hillhead (Sir R. Horne) has raised the question of the possibility of an export subsidy for stimulating the coal trade. I understand that this matter has been for some time under consideration by the joint Standing Consultative Committee for the coal industry. I am informed that the upshot of the careful examination that has been given to this proposal, in the light of the internal and external demand for coal, is that, having regard to that demand, the Consultative Committee have asked the Government to suspend consideration of the matter for the time being, on the understanding that the Consultative Committee will desire to reopen the matter when the situation in the export trade appears to them to call for further consideration of the situation. In view of that authoritative expression of opinion from a body representing both the Mining Association and the Miners' Federation, I should have thought that the laughter of the hon. Member for Bishop Auckland (Mr. Dalton) was ill-timed. I will say nothing about the point raised by the Commissioner with regard to the manufacture of calcium carbide in South Wales, because the House will be discussing to-morrow a Bill dealing with that question, and therefore will have to make up its own mind on the issue.

I have one other thing to say, and that is with regard to private factories and the progress that is being made in that direction. I said in the earlier part of my speech that definite results were being achieved. As the Committee may know, Lord Portal, as Chairman of the Special Areas Reconstruction Association, the Nuffield Trustees, and the Government themselves, have been making great efforts to induce industrialists to go with new industries to the Special Areas, and in South Wales, Messrs. Pilkington Brothers Limited are arranging to set up a glass factory and Messrs. George Weston Foods Limited a biscuit factory. A sewing machine factory at Merthyr Tydfil, an engineering works at Aberdare, and a reinforced concrete factory at Port Talbot, have also been arranged for. Negotiations have also been proceeding between the Government, the trustees of the Nuffield Trust, and Low Temperature Carbonisation Limited, for the establishment of a "coalite" low temperature carbonisation plant on the southern outcrop of the South Wales coalfield. I am pleased to be able to state that these negotiations have reached a point which will enable a large plant to be erected by co-operation between the three parties I have mentioned, provided that legislative sanction is given to the present proposals. The total capital involved in these six new undertakings in South Wales will be in the region of £1,500,000.

Turning to Tyneside, hon. Members will be glad to know that while the Team Valley Estate is making a very great contribution in the North-Eastern area, financial arrangements have also been made for an extension of the engineering works of Messrs. John Spencer and Sons, and for the establishment of a metal working factory. As regards West Cumberland, the Whitehaven Collieries are to be reopened after having been closed for nearly 18 months. Finally, in the case of Scotland an engineering works and a brickworks have been already arranged for. Since these results have been achieved in three or four months, I think I am justified in saying that this concrete contribution to the problem is of far more value to the men and women who have suffered so long in these areas through heavy unemployment than a great deal of the talk that we have had in Debates in this House.

5.46 p.m.

Mr. Dalton

The Minister ended his speech with the claim that certain factories were to be established in certain parts of the Special Areas. I hope we shall be informed before the Debate ends how many persons are likely to be employed, approximately at any rate, in the undertakings to which he has referred. It might well be that, although there may be some dozen new factories, the employment afforded will be negligible. On the other hand, if some of these are substantial, it might be very large. I am sure he would not wish the Committee to remain in ignorance as to the total achievement, in terms of new employment, likely to be yielded by the facts cited in his peroration. Therefore, I ask that we shall be given some estimate, even though it may be at this stage provisional.

It was strongly felt at the beginning of the Debate, and indeed, it was strongly felt yesterday, that we are conducting this discussion under a procedure which is open, from the point of view of my hon. Friends, to the very gravest objection. A large number of very important matters have been referred to in the Minister's speech, and others will be raised from these benches, but, although they may be discussed to-day and on Friday, it is going to be impossible to take the judgment of the Committee or the House upon them in the form of Amendments. My hon. Friends regard this as a grotesque procedure, for which they hold the Chair in no way responsible. You, Sir, naturally give your Rulings on the situation created for you by the Government. My hon. Friends feel that the Government are not treating the House in proper fashion in thus limiting our rights and our power of taking the opinion of the House or the Committee on Amendments dealing with these matters.

We feel particularly strongly on the limitation imposed on any Amendments for extending the scope, as distinct from increasing the charge, involved in this Resolution. We accept the general principle that private Members should not be permitted to move Amendments which would increase the charge upon the taxpayer, but a very large number of questions which we seek to raise are ruled out from discussion in the form of Amendments, not by reason of increasing the charge, but on the ground that they extend the scope of the Resolution, and on that I once more make a protest. The hon. and gallant Gentleman the Member for Chelmsford (Captain Macnamara), who made an exceedingly interesting speech yesterday, said, with very great truth, that here in London we are a long way from the Special Areas, and certainly the kind of performance which has been staged by the Minister to-day would have been considerably less successful had it been staged in any of the Special Areas, where the emptiness of many of his claims and his failure to grapple with a large number of the issues that have been raised would have been patent.

I hope to touch in the course of my remarks upon several matters, on which we are debarred from moving Amendments, but which, in the opinion of my hon. Friends, are of the very greatest importance. I will begin with the question of the location of industry and the Government's responsibility therefor. The Minister announced that a Royal Commission is to be appointed, although the Government are not yet in a position to announce the terms of reference or the personnel. A Royal Commission is a well-known device for postponing decisions. It has been employed by all Governments, including, no doubt, the two Labour Governments, with that object. We appointed a Royal Commission on the drink traffic. The right hon. Gentleman is not to be congratulated upon this delaying decision. It appears to me to be one of the most deplorable statements in the whole of his speech. Sir Malcolm Stewart, in his very able third report, his swan song before, exhausted by a struggle against unequal odds, that combination of the Treasury and the Ministry of Labour, he threw in his hand. All credit to him for what he did in difficult circumstances, continually cribbed, cabined and confined by the Chancellor of the Exchequer and the right hon. Gentleman while he held that thankless office. He dealt in the most vivid and remarkable language with this question of the growth of London. I wish to say a word or two upon it from the point of view of defence. The problem of the location of industry has two sides. There is the question of the life of the Special Areas and there is the question of the life of these ever-growing and expanding urban aggregations of which London is the most glaring, and Birmingham the next most glaring example. Sir Malcolm Stewart some months ago now struck a note of urgency with regard to this matter, and among other observations of his I quote this: From the strategic point of view the position is one of the greatest possible dangers. Reference has already been made to the concentration of population and wealth in this small area"— he was referring to Greater London— dependent on an extremely complicated mechanical organisation. It would take little in the way of systematic attack to destroy the most vital part of this organisation, with the result that the feeding of the population would become impossible. Finally, he points out, London is not only open to attack from the air but could be bombarded from the Continental ports on the other side of the Straits of Dover should those be in enemy hands. Every month and every year during which this Royal Commission will be sitting the stream of population from the rest of the country is to be allowed to continue to flow to London, a stream of persons, some refugees from the Special Areas, some youngsters torn away from their families and planted down here in occupations of a sweated and precarious character, some under the most deplor- able conditions, to swell this great mass of ever growing Greater London, while this precious Royal Commission is slowly examining witnesses and ponderously going on its way. Birmingham is in little less perilous case and you have, therefore, this dual situation. On the one hand, you will continue to have the life blood drained away from the Special Areas and, on the other, you will have this enormous, swelling target continually being augmented while your Royal Commission is sitting on the question. May I quote one more authority, the military correspondent of the "Times," one of the most brilliant of our military authorities, commenting upon the general situation presented by the growth of great towns. In a book to be published on the nth of this month, of which he has been kind enough to send me an advance copy—"Europe in Arms," Captain Liddell Hart says: Military wisdom now lies, not in amassing armies, but in diminishing national vulnerability. This is a compound of factors. Centralisation of industry may counteract the growth of industry from a military point of view, and every means of reducing and dispersing targets, and also of decreasing their sensitiveness, should be studied and sought. But you are accumulating targets for our opponents in a war in the future. This Government is acting, in regard to the concentration of industry and population, exactly as if it was in league with the King's enemies in a future war. You are going straight against the dictates both of common sense and expert opinion on military questions and, at the same time, by the same action, you are leaving the Special Areas to be drained of their life blood. They will continue to be desiccated as the result of your policy during the indefinite period during which your Royal Commission will slowly rumble towards its conclusions. That is the contribution that you are making to the Special Areas and to the defence of the country. In my judgment, and in that of a number of my hon. Friends, there is only one, and that a very simple mode of dealing with the problem of location. That is to lay it down that the State has a responsibility for the location of industry, a responsibility which, both on economic and health grounds and on grounds of military defence, it can no longer refuse to accept. The simplest, and I believe the most effective of all modes of approach to the problem is to lay it down that from this time on no new industrial establishment of any size should be erected on any particular site unless permission is obtained from some public authority. Those who desire to see a Minister of Cabinet rank appointed to take charge of all these problems of the Special Areas believe that the best plan would be for this Minister to have power to require that new establishment to be started either by Englishmen, or by foreigners who come here under licence, should be placed in some part or other of the Special Areas, unless a case can be shown—as sometimes it could—for this establishment to be placed somewhere else.

We believe that there should be a definite pressure imposed upon new industries. They should show cause why they should not go to some part of the Special Areas. In some cases they will show it, sometimes easily, sometimes with difficulty, but in other cases it is to the Special Areas that they should be required to go. By some curious chance of fate the Special Areas have, from the point of view of vulnerability, very great advantages over London, Birming ham and the Eastern side of this island. West Cumberland is, I suggest, one of the least vulnerable parts of the country to air attack. On the Western seaboard, beyond the Pennines, it is so situated that any hostile aircraft would have to fly a considerable distance both there and back over land, in addition to encountering the difficulties of air pockets, and so on, in crossing the hills. West Cumberland is ideally situated from the strategical and defence point of view for the establishment not only of factories for munitions, but also for any other factories or establishments which the Government wish to tuck out of harm's way. The same is true, for the obvious geographical reasons, of South Wales. It is true also of Western Scotland, which is the most depressed part of Scotland. And it is not untrue of the South-West Durham area, which is further in from the coast than the rest of the North-Eastern area, and where also there are difficulties for air navigation owing to the lie of the land in Weardale and Teesdale. Therefore, it comes about that these Special Areas, as at present defined, are also special in respect of their vulnerability, and upon defence grounds there is everything to be said for the Government seeking to place new industries, and, in particular, industries connected with the defence of the country, in these areas.

I pass to the question of a Minister of Cabinet rank, whom we desire to see given general charge of the distressed areas. In our view it has been abundantly proved that the device of Area Commissioners, as we have experienced it, is not satisfactory. The Commissioner is always subject to Treasury sanction. The Minister admitted that. He said that the Commissioner will have power to make grants to this and that undertaking, but always subject to an overruling Treasury veto. He needs not only a Treasury sanction, but a Ministry of Labour sanction, and there are many cases in which the Ministry of Health or the Ministry of Transport also exercise vetoes of varying degrees of stringency. The Commissioner, in other words, has to square, or get one or other Minister to square, a large number of separate departmental interests before he can undertake even a very modest development and make use of the money allotted to him. It is an open secret that Sir Malcolm Stewart was continually held up by long delays owing to departmental jealousies and inter-departmental correspondence, both on paper and by word of mouth. It is high time that some Minister should be appointed who would take general charge of these problems and fight out these quarrels with his colleagues in the Cabinet on behalf of these areas, rather than permit these immense delays to accumulate, as they have done under the existing system.

Moreover, in this House there should be some one Minister who can be called to account for policy dealing with these matters. Even had we been dissatisfied with Sir Malcolm Stewart—and I here put it on record that we believe that Sir Malcolm Stewart, though obstructed and hamstrung by the Government and by various Ministers, did his utmost in very difficult circumstances—we could not have called him to account across the Floor of this House. Nor is it possible for us to deal with the Minister of Labour who can be vetoed sometimes by the Ministry of Health and sometimes by the Ministry of Transport. Surely we should have one Minister here in order to focus re- sponsibility upon a single person for the general conduct of these policies relating to the Special Areas. We feel very strongly upon this matter. Your predecessor in the Chair, Captain Bourne, early this afternoon did not give a definite Ruling on this point. He said that this was a matter he would have to look into more closely. But we consider that it will indeed illustrate in the most extreme way the grotesque and cramping procedure which the Government have chosen to force upon the House, if it should turn out, in the judgment of the Chair, that it is not even in order for an Amendment to be moved calling for such a Minister of Cabinet rank to be appointed. So much for administration.

We also believe that such a Minister should be furnished with a substantial sum of money, which he should be free to spend at his own discretion, without needing Treasury sanction for every pound, shilling and penny. You should trust whoever is appointed to such a post with reasonable discretion in spending a substantial sum of money for the general benefit of the areas for which he would be responsible. There should be flexibility with regard to his expenditure, and there should be, in a number of other directions, more flexibility also. The Minister has stated—and he will correct me if I misunderstood him—that there is no relaxation, under this new Resolution and under the Bill which is to be founded upon it, of the rigid rule of which Sir Malcolm Stewart has made bitter complaint, namely, that the Commissioner is forbidden to make any grant of money to any object if it is within the power of any Government Department to make a grant for that same object, even although no grant is, in fact, being made by any Government Department.

The Minister will again correct me if I am wrong, but we understand that he has been engaged in long and difficult battles with his colleagues on this point. Perhaps the Minister has been overruled by the Chancellor of the Exchequer on this point as on others, if rumour be true. But the Minister will correct me if I am wrong in stating that this crippling procedure of which Sir Malcolm Stewart complained still remains in force, and that Sir George Gillett, and Sir David Hay, in Scotland, are equally Lnable to grant a penny of the funds put at their disposal for any object which can be subsidised, even if, in fact, it has not been subsidised by any Government Department. That is admitted. The Treasury view has prevailed once more. The Chancellor of the Exchequer wears his habitual happy smile. He is witnessing still one more triumph over conflicting doctrines. And, of course, the Chancellor of the Exchequer has never believed that it was possible to do anything much for the distressed areas. He has always been sceptical and pessimistic in this matter, and he is only too delighted at having been able to force his views, with the help of his very able and equally sceptical officials, upon the relatively exuberant Ministry of Labour staff.

I will pass to the question of the local rates for a few moments. A great deal has been said about the block grant, about these niggling adjustments of the block grant under which the rates in Merthyr Tydvil, in spite of the much advertised relief, are to remain at 22s. in the pound. [Interruption.] At least that; that is only an illustration. The rates in Merthyr are to remain well over 20s. in the pound after this niggling relief has been given, and the rates of prosperous areas are going to remain at only 7s. or 8s. in the pound. I will not multiply illustrations, as they were raised in the Debate the other day, but it still remains true that, with this very minor adjustment through the block grant, the Special Areas are to continue to carry an enormously heavy burden of local rates imposed upon impoverished communities, largely due to the fact that these communities have to pay for their own public assistance out of rates which are enormously above the average prevailing for the country as a whole.

In the view of my hon. Friends, the only adequate solution of this matter is for the public assistance rate, at least, to be levelled as far as the Special Areas are concerned, over and above these niggling adjustments of the block grant, by an amount equal to the excess in any particular local authority area of their present public assistance rate over the average public assistance rate for the country as a whole. Until that is done, there will be no approach towards equality of opportunities—and I would put it in this form —for industrialists desirous to settle in these areas. This must be qualified, and I will proceed to qualify it, in the light of what the right hon. Gentleman tells us about the new powers of the Commissioner to make grants in respect of Income Tax, rates and rent.

I will examine that for the moment. It was generally imagined up to now that the way any such relief would he operated would be according to some general formula. It has been suggested, for example, that any new undertaking setting up in any of the Special Areas, should be entitled to some uniform reduction according to some proportion of the local rates over a period of years. There is a good deal to be said—although I think that it is possible to exaggerate its importance—for some such general relief. But I am very doubtful about this kind of relief in which everything is left to the discretion of the Commissioner dealing with the particular cases, with the advice of one of the many new committees which the right hon. Gentleman has announced this afternoon.

You are throwing a very great and invidious burden upon Sir George Gillett and Sir David Hay in making them say, "We will give to this industrialist the equivalent of £x,000 a year, and to this the equivalent of only 50o a year, and to this man nothing at all." You are throwing upon them an invidious choice, and, further than that, you are leaving it to be imagined, even though the suspicion tnay be quite groundless, that personal influence may exercise an undue effect in determining how much a particular man is to get. It is, of course, a pure coincidence—I am sure that the right hon. Gentleman will agree with this—that one of the new armament factories is being established—I am sure it is a very suitable location, and is a pure coincidence—in the constituency of the right hon. Gentleman the Member for Chorley (Mr. Hacking), who is also the Chairman of the Conservative party organisation. It is a pure coincidence, of course, that that is the same constituency in regard to which my hon. Friend the Member for Westhoughton (Mr. Rhys Davies) elicited the fact that the Employment Exchange has been moved into the local Conservative club. But you see how suspicions may arise, and this arrangement of the right hon. Gentleman whereby the Commissioner is to choose people for assistance—to give much to one, little to another, and nothing to a third, is, I think, open to objection. It would have been very much better to give whatever relief is proposed in some straightforward way to all new industries setting up in these Special Areas, so that they could share equally.

There is one point about which the right hon. Gentleman did not say anything at all, and I want to ask him a question. Does he or does he not agree with the "Times" in this assertion?

Although nothing is said on the point in the White Paper, there ought to be an assurance that undertakings that start with State assistance shall maintain fair conditions of employment. There is nothing about that in the White Paper. As the right hon. Gentleman knows, I have travelled round most of these Special Areas with various colleagues in the last month or two, and when I was in the North East I did hear complaints about the conditions of employment in some of these new factories to be established in the Team Valley Trading Estate. A complaint was made by some of those whom I saw, that the Government were not enforcing, through the Public Utility Company, the condition that trade union rates of wages should be paid, and that trade union conditions should be respected by these industrialists who were getting some very cheap factories.

Mr. Magnay

The hon. Member has referred to my constituency and to the new trading estate there. No work has yet been started by that trading estate.

Mr. Dalton

I am aware of that. I had the pleasure of calling on Colonel Appleyard, who was kind enough to show me the plans. The point I am making is that, although nothing has yet been started, a number of firms have been in communication with the company and in some cases arrangements have been made by particular firms to take over a factory when it is built.

Mr. Magnay

But who was complaining?

Mr. Dalton

I do not think the hon. Member and I are in any disagreement. If we are, then I am right; because I am only reporting what was said to me. I was told that the firms who have bought factories on the Team Valley estate were not required to give any undertaking that they would pay trade union wages and maintain trade union conditions. They are getting a very good bargain and my contention is the same as that of the "Times," that there should be some assurance that people who are getting these advantages by way of public money should give an assurance that they will pay proper wages and observe proper conditions. I wonder whether the right hon. Gentleman can tell us whether the Government are going to do anything to see that proper conditions of labour are observed by employers who are getting all the advantages which he so glowingly described? The right hon. Gentleman was delighted that consideration of the question of the coal export subsidy should be suspended. I am sure that suited him very well, and it would suit him if consideration of a number of these other matters were suspended. But, so far as the internal market of the coal industry is concerned, I want to ask him for more particulars as to what is going on.

He said that in South Wales there was to be set up, with some element of State assistance, a new works for low temperature carbonisation. Apart from the size of the establishment and the amount of employment it will give, I want to ask whether this is absolutely all that the Government are going to do in the development of oil from coal? If one factory in South Wales is to be all, then it is a most miserable achievement. At a time when the Government are taking power to spend £1,500,000,000 on making munitions of war they are taking no steps whatever, except in the case of this one establishment, to see that if war comes we are not wholly dependent on overseas sources of supply for oil. It has been stated that 98 per cent. of peace-time consumption of the Defence Forces by way of oil comes from overseas, and that only 2 per cent. are produced in this island. Are the Government really going to do nothing more than this in order to stimulate the creation in these relatively invulnerable areas of additional sources of oil supply to meet the needs of a critical situation? Ninety-eight per cent. is a staggering percentage, and although it is not a practical proposition to make ourselves wholly independent of overseas supplies, yet I should hope that as a measure of military precaution a big effort would be made to increase substantially the output of oil from our own country, not only from the Defence point of view, but having regard to our national economy and to bring back into employment some of our unemployed miners and to reopen some of the pits which are now closed. What is being done in that matter?

Cumberland has been mentioned in the course of the Debate, but the right hon. Gentleman said nothing about the development of the harbours on the west coast of the county. I have visited that terribly derelict harbour at Maryport. Sir Malcolm Stewart specifically recommended, quite apart from the commercial and economic arguments for the reopening of Maryport Harbour in view of the coal mines in the vicinity, that there was also a tremendous strategic argument for keeping the harbour in good order.

Mr. E. Brown

The hon. Member knows that the Commissioner in his second report covered a very large field and put up a very large scheme in connection with Maryport Harbour costing £70,000. There is an inquiry taking place into that matter.

Mr. Dalton

Another inquiry—another preliminary inquiry. Inquiries and inquiries and inquiries fill up our little lives from day to day. That is almost a quotation from Shakespeare. Now let me deal with the question of communications. As we have drawn from the right hon. Gentleman the fact that a preliminary inquiry is to take place into the question of Mary-port Harbour we may be able to get a similar assurance if I go on to mention one or two other burning questions. The matter of communications has been dealt with by Sir Malcolm Stewart. In West Cumberland rail and road communications are a disgrace to those responsible, and it has been frequently urged—it was recommended by Sir Malcolm Stewart—that a good West Coast Road should be constructed, and that a road and rail bridge should be thrown over the Duddon estuary. Is there to be an inquiry into that? I gather there is not, not even a preliminary inquiry. Sir Malcolm Stewart also reported emphatically in favour of a bridge over the Severn. The arguments are well known. Is there to be any preliminary inquiry into the Severn Bridge? Apparently not. No doubt some of my hon. Friends will deal with the improvement of communications by rail and road within the Special Areas and also between these areas and the rest of the country.

Let me say one word on the Treasury loan of £2,000,000. The Chancellor of the Exchequer is just painfully keeping pace with Lord Nuffield. I suppose if Lord Nuffield had just put in £500,000, the Chancellor of the Exchequer would have felt satisfied if he also had put in £500,000. What a pity that Lord Nuffield did not put in another £1,000,000, and then we might have had another £1,000,000 from the Government. But is it not a little derogatory for the Government only to put down pound for pound of the amount given by a charitably-disposed millionaire to help these areas and to carry out obligations which should be national obligations? We are deeply dissatisfied with this small sum of money, and we cannot believe that it will go far in the creation of new industries on any scale. The right hon. Gentleman made a reference to the Gibb report on the position in South-West Durham, and said that the Government did not necessarily agree with the recommendations or the general conclusions in that report. I suppose that means that the Government do not know whether they agree with them or not.

They are going to have another preliminary inquiry which is to be carried out by a body called the South-West Durham Improvement Committee. I do not know whether I have got the title right, but this committee is to make another inquiry. Is it going to do anything more? Is it going to have any power to do anything more than conduct further inquiries? Hon. Members from South-West Durham are anxious and want to be reassured on this matter. Can the right hon. Gentleman tell us who is to compose this body? Will he give us the names later in the Debate? I can claim some local knowledge here, and other hon. Members who are well acquainted with the south-west part of Durham entirely refuse to accept the general conclusions of this so-called expert report. We do not believe that this area is unsuited for industrial development. It has within its area the London and North Eastern Railway Company's railway shops at Shildon, which are working better than for years past. And there are a number of manufacturing firms, at Bishop Auckland and elsewhere, which during the years of depression have triumphed over obstacles and have made profits on a moderate scale in spite of the shrinkage of the local market. Therefore, we do not accept the view that this area is unsuited for further industrial development.

It appears that the chief remedy proposed in the Gibb Report is to drive the people out of the villages and then pull the houses down behind them so that there would be no chance of their going back. The ancestors of some of the more aristocratic associates of the right hon. Gentleman did that with the Highland crofters. They drove them out and then pulled their houses down behind them. The representatives of the southwestern area of Durham do not for a moment accept the programme implied in this deliberate depopulation of the area. There is a good deal to be said, and it will be developed by my hon. Friends from this area, to show that there is an opportunity for many forms of development, industrial and agricultural, including afforestation, within the area. We do not for one moment accept the view that there is nothing to be done here except to shut up shop and go away.

Before concluding. I wish to draw attention to one further matter which looms very large in the White Paper. Great credit is taken by the Government for Their armaments programme in relation to the Special Areas. I accept the view put forward by the right hon. Gentleman that if armaments are to be made, it is well that the factories which make them should be established in those places which combine relative invulnerability with heavy unemployment. But what is the further outlook for these areas? There is this great piling up of armaments. Either a war will come or not, but in either case what is the outlook for these areas? If a war comes, it is hardly necessary to imagine the consequences: For these areas it will be Death in the Mass, as for many other areas neither "certified" nor classified as "Special."

If a war does not come, if somehow or another we muddle through and if after a year or two we are able gradually to reduce armaments expenditure again from the dizzy heights to which it has risen, what will happen? There will be a collapse of industrial activity precisely in those areas in which, by the artificial stimulant of armaments, it has been built up. Therefore, there will be the same areas still distressed—exceptionally distressed—in proportion as there has been concentrated in them the exceptional armaments production of these years. The Government are simply asking for this problem to be repeated again in a more critical and acute form a few years from now. The right hon. Gentleman must realise that what is necessary is a basis which is more permanent and more diversified with regard to the occupations and livelihood of the people than can be formed by merely pumping in armaments work at the present time.

I have gone through some of the points raised in the right hon. Gentleman's statement and I have expressed the view that the Government's policy is inadequate and that it does not go to the root of the matter. A large number of positive measures which ought to be adopted in the Special Areas have been deliberately set aside. The Government are embarking upon most perilous and most discreditable courses of further delay. There is no decision and no bold action here; there are only a few trivial expedients and there are still the same restrictions imposed on the agents of the Government's policy—those unfortunate new Commissioners—as were imposed upon Sir Malcolm Stewart. Therefore, we have no hope that any substantial transformation of this dark scene will take place.

The right hon. Gentleman and the Government must not be surprised at the signs of indignation that were manifested from the benches behind me this afternoon. The right hon. Gentleman the Minister of Labour sits for a pretty dark area, and he ought to have a certain amount of sympathy with my hon. Friends who come from areas even worse hit than Leith. We suffer deep disappointment in face of this most inadequate and slow-moving programme which the Government have put before the Committee. Finally, I repeat—and this is the core of our criticism as far as procedure is concerned —that we deeply resent the fact that the Government have chosen so to frame this Financial Resolution and so to predetermine the proceedings on the Committee stage of the Bill that on practically all the matters on which I have touched in my speech—and whether or not what I have said carries conviction, at any rate, it cannot be denied that these are matters which are important and highly relevant to the problems of the Special Areas—no Amendments will be in order when we come to the Committee stage of the Bill.

6.36 p.m.

Miss Lloyd George

If it was not clear before, I think the Minister has made it abundantly clear this afternoon that the Financial Resolution now before the Committee does not provide a policy to lift the Special Areas out of their depression. With one exception, the Financial Resolution in all important respects is the same as the old Bill. It is really a sop thrown out to quieten public clamour and the noble Lord the Member for Aldershot (Viscount Wolmer) and his friends. I do not know what effect it may have on the Noble Lord, but I have a pretty good idea of what effect it will have on the public outside. I would like to improve the version of the quotation given by the hon. Member for Bishop Auckland (Mr. Dalton) by giving the quotation itself, for I cannot help feeling that it adequately represents the policy of the Government: To-morrow, and to-morrow, aid tomorrow, Creeps in this petty pace from day to day. In listening to the successive speeches of Ministers on this question, I think we cannot help coming to feel that there are always excellent statesmanlike reasons why something adequate should not be done for these areas. I believe that hon. and right hon. Gentleman opposite are just as sincere in their sympathy towards those who live in these areas as we are on this side of the House, but I have also come to believe that there are many hon. and right hon. Gentlemen opposite, among them the Chancellor of the Exchequer, who are quite sincerely convinced that there is no real solution to the problem. They have accepted the old Calvinist doctrine that they are predestined to be doomed and that there is nothing to be done about it. Had the Government exhausted every experiment, or every group of experiments—had they given a fair trial to all these experiments—there might have been some justification for this defeatism, but I can only say that I wish their policy of non-intervention had been as effective elsewhere as it has been in the Special Areas.

We have only to measure the Government's proposals by the proposals of the Commissioner himself to realise how inadequate they are. There are a great many of us who believe that the Commissioner's report did not go far enough, but if his proposals are measured by these proposals, they are revolutionary. The one proposal of any substance that has been made by the Government relates to the establishment of new industries, and the inducements the Government are going to offer to industries go to these areas. There is to be what amounts, I think, to an extension of the Special Areas Reconstruction Association. I am very glad that the right hon. Gentleman is going to extend it to areas outside the scheduled areas. [An HON. MEMBER: " Do not be too sure."] I hope he will do so, otherwise this provision means nothing. But I still believe that this is not a just or a proper definition of distressed areas. I believe and hope that my constituency will qualify for some assistance. It ought to do so, according to the provisions laid down in this Financial Resolution. It has 49 per cent. of the men insured in the town unemployed, it is dependent upon one industry, and that industry has been in a state of depression for many years.

In the case of a comparatively small community such as that, the establishment of a new industry will make a great difference, but what is likely to be the extent of it over a considerable area? We were told in the White Paper that up to date 48 loans had been made, and the Minister now tells us that 54 loans have been made. But those 48 loans were for £280,000, that is to say, something less than £6,000 each, although £1,000,000 has been set aside. The right hon. Gentleman omitted to give any estimate of the employment that has been given as a result of these loans. A sum of £2,000,000 is now to be given to cover an area which is far greater than the Special Areas. This afternoon the right hon. Gentleman told us of factories that have been established or are about to be established in South Wales, but again, curiously enough, he omitted to give any estimate of the em- ployment that was likely to be given, and that, after all, must be the test in this instance. Moreover, we do not know how much is to be spent in remission of rates, rents and Income Tax, but unless the Government have completely revised their estimate of the whole problem of the Special Areas, I think it will not be very effective.

I would like to say a word or two about new industries. With trade on the up-grade, with concerns more prosperous here and in other countries, and therefore more opportunities for development both here and abroad, this should be the most propitious moment to start new industries, but in fact it is the least advantageous moment, because of a shortage of skilled labour, a shortage of materials which is likely to become more serious, and because the energies of the nation are concentrated at this time on the armaments programme. The right hon. Gentleman the Minister for the Coordination of Defence said that there is to be no uncontrolled interference by the Government's rearmament programme with the normal trade of the country, and he said that that would be both foolish and disastrous. But the interference has already begun; it has already been felt. Within a month of the announcement of this programme, there is a very serious shortage of steel, and it has become obvious that a great many trades, including the building trade, which gives a great deal of employment, are to be very seriously prejudiced. That is happening within a short time of the announcement of this programme.

If that is the reaction on normal trades, the programme will certainly prejudice very seriously any new developments. The right hon. Gentleman the Minister of Labour said that the Government will give facilities for new industries and will do all in their power to assist them—I am sorry that their power is so limited—but the right hon. Gentleman the Minister for the Co-ordination of Defence said that in present circumstances it would be no bad thing if some orders were postponed two or three years perhaps, so that the Government would not be handicapped in the completion of their programme. I should have thought that that was hardly the spirit in which to encourage new industries. The Minister said afterwards that at the end of five years there will be a flow of remunerative contracts and that it will be possible to take advantage of them; but if we cannot take up orders now, other people will take them up, and we shall find that they are going elsewhere with their orders, as they did during the War. It seems to me that now is the time, or now should be the time, to take the tide at the flood. The Unemployment Assistance Board is prepared for a figure of over 2,000,000 when unemployment comes round again and Sir William Beveridge says that he expects a " land-slide " within three years, and so we should be well in the doldrums by the time the five years are up. The establishment of new industries at this most unpropritious moment is the mainstay of the Government's proposals or, at any rate, they would have us believe that it is. I believe that it is a broken reed.

I do not think, however, that the Government expect great things from this proposal. The truth is that they are relying upon their armament proposals to rehabilitate these areas. But is that the real solution? Some areas, no doubt, will benefit much by the armaments programme. Others will benefit a little, but some will not even be touched by it. That is becoming clear even at this early stage. It seems to me that the Government by relying upon their armaments programme are perpetuating the state of the distressed areas, because certain areas will become dependent upon an industry which we must all hope, for the sake of our civilisation, will not be in a state of boom for ever. What is to happen at the end of these five years? Even if we pursue the foreign policy of the present Government I cannot believe that at the end of five years we shall have to rebuild our Fleet completely. We shall require replacements but whatever we may feel about the inevitability of armaments, we shall not have to make up the lee-way that we have had to make up by this programme, and unless that worst of all imaginable contingencies arises and we are involved in another conflict, it is inevitable that the programme of armaments must be slowed up.

The White Paper tell us that we have not yet realised the cumulative effect of the Government's proposals to deal with these areas. I think that at the end of five years we shall begin to realise the cumulative effect of these proposals. The Government are again putting off until tomorrow what they ought to have done yesterday. For good or ill, we are committed to this vast loan for armaments but is that any reason why we should not at the same time help national development. Germany, Italy and Russia have been spending vast sums on armaments in recent years, but, side by side with that policy, they have been re-organising industries settling people on the land, draining the land and in every way improving their estates and they have not the resources of this country. The right hon. Gentleman the Member for Hillhead (Sir R. Horne) said that we could take this great loan in our stride. Therefore, it is not a question of finance, and I do not believe it is a question of lack of schemes. To begin with, there are the schemes of the Commissioners. Then there is the short-term policy which was brought out only yesterday by the Labour party. There is the new report on South-West Durham. There is the second industrial report on South Wales which came out a few days ago. There are all those schemes and many more which should be considered by the Government in a very different spirit from that in which they have examined such proposals in the past.

I would like to see the Government summon an all-party conference of responsible leaders to see whether it is not possible to produce a policy to lift these areas out of their depression. It is a national problem and it concerns us all. Hon. Members may say that what I suggest would be impossible, and that among so many conflicting views, agreement could never be reached. A short time ago, the Welsh Parliamentary party in this House, a very important body, including Members of all parties, and indeed including every Member who represents a Welsh constituency, came together to see whether it was not possible to get a practical policy for the distressed area of South Wales. Very controversial matters were discussed; each party had its own definite views and its still more definite reservations about the ideas of the others, but in the end the lion of Ebbw Vale lay down with the lamb of Carnarvon, and it was possible to frame a policy of concrete and practical proposals. They were put before the Prime Minister and the Government but they were not accepted. If hon. Members had entered that conference armed with statistics and with only one idea, wondering how they could prove the ideas of others to be completely useless, that conference would have been of no avail. But the chief anxiety of those who took part in it was to get something done, and done immediately, to assist their fellow-countrymen. That was their paramount consideration. I appeal to the Government to see whether it is not possible to call together some conference of that kind. Here would be an opportunity to show the world that this democratic country can tackle its problems with as single-minded a purpose as any autocracy in Europe.

6.53 p.m.

Mr. Peat

I find myself largely in agreement with many of the statements of the hon. Lady who has just spoken. She has, I think, expressed views and principles which are in the minds of a great many hon. Members. But when she complains that nothing has been done I would point to one passage in the White Paper which has not been referred to yet. It is on page 8 and it shows the reduction of unemployment in the Special Areas. Between 1935 and 1937 the unemployment figure in those areas has been reduced from 450,000 to 335,000. That is to say, 120,000 people have returned to work in the Special Areas, between January, 1935, and January, 1937. That appears to me a very great achievement, though it is not completely satisfactory because of the 330,000 people who remain unemployed in those areas.

Mr. E. J. Williams

Is the hon. Member certain that this number has been employed? Have they not been transferred?

Mr. Peat

I understand that 20,000 have been transferred, and I presume that they have found employment somewhere. If a man can find employment outside the Special Areas, I do not see any reason why he should not go and get it, and I feel that the prejudice against transference is very much overdone. My own family were yeoman farmers in Scotland, but only one son could take the farm and the others had to go. They did so for generations, and I do not see why young men in the distressed areas should not do the same thing. The provisions of the White Paper to a large extent make it possible to re-industrialise the Special Areas. A great many of the earlier difficulties and shortcomings and restrictions on the Commissioners have been done away with, and the field is clear for the re-industrialisation of these areas. No policy for dealing with these areas is satisfactory which does not take a very long view, and it has already been said that we do not want to do things now which, later, may plunge the distressed areas once more into a condition of depression, and possibly create other distressed areas in other parts of England.

The present position of industry is, to a certain extent, alarming. We have this great armaments expenditure which is taking place. Thousands of millions are being spent in all parts of the world on armaments, and the conditions are almost those which would exist if we were at war. There is an international shortage of steel and certain metal prices are soaring. The position is difficult indeed because of two main factors—one that of prices and the other that of the reckless expansion of productive plant. As regards prices, they must be controlled because uncontrolled prices soaring higher and higher without relation to cost and based purely on speculation, will reduce the comparative boom which we are enjoying gradually to a condition of depression. I see no reason why prices should be allowed to hamper our efforts to "iron out "—if I may use an American expression—the trade cycle. In the steel industry prices are regulated by the Import Duties Advisory Committee who ask for the costs of the products, and these audited costs not only show the cost of production but include a provision for depreciation and obsolescence, and also a reasonable return on the capital invested. Is there any reason why the great basic industries of this country should not be controlled as to prices in the same way? Is there any reason why great Government Departments and the great consuming industries should not get into touch with their suppliers and demand like conditions? I believe that if they did, this prosperity which we are enjoying to-day could be maintained.

The other factor to which I want to refer is the expansion of productive equipment. At the present moment in an almost hysterical manner we are being asked to put down factories here, and factories there, very largely from the point of view of mitigating the condition of the distressed areas without very often great relation to the economic effects. We must be very careful and self-controlled in this matter of the expansion of equipment, because if we are not careful we shall find ourselves in four or five years time with plants put down in all sorts of uneconomic places, with communities got together which are employed in these works, and when the contraction comes —and there must be a contraction—these places will not be able to stand up to that contraction, and will become derelict as the years go by. Whereas if we control the expansion of our productive equipment, we shall be able to stand up against a moderate contraction of our markets, because, after all, if you put your new works adjacent to your old ones on an economic basis, and have your industries properly organised, you can treat them as stand-by plant, and they are not left standing on their own, isolated and doomed. This, again, is being done by the iron and steel industry. They are trying to control expansion of plant.

This leads me on to the position with regard to rationing the deliveries of our products where there is at present a shortage. A world shortage exists in iron and steel. The Government are calling, or will call, for great quantities of steel on urgent delivery. I suggest that in that case and others like it, instead of a mad expansion of equipment, there should be a careful rationing of deliveries, and some of the more luxury things should wait awhile. You should not put up cinemas if it is going to be at the expense of bridges. That is the sort of example I should like to leave with the House, because I believe that by doing that and making expansion in the right places, we can get through this difficult period which lies ahead without sacrificing the position as it will exist in the years to come. I think that few of us can possibly accept the statement which is so often made—"When the slump comes." It is our duty in this House to see that that slump does not come again. All our efforts ought to be bent in that direction and I think that our end can be achieved if we see the danger ahead and do not, as some people do, great economists and others, accept as a matter of course that in three years, five years, or eight years time we shall be down again in the depths, at the bottom of this hideous vortex out of which we have just climbed after years of sacrifice. After all, who is it that suffers most from this trade cycle?

The Deputy-Chairman (Captain Bourne)

It is quite understood that the Debate on this Resolution should be very wide, but so far not one single word which the hon. Gentleman has said appears to me to have had any relation to the Resolution.

Mr. Peat

I must apologise for having taken the Debate too broadly, but I did it because I felt that these rather broad considerations which I have been putting forward are absolutely inherent in any attempt to tackle the problem of the distressed areas, and particularly as we find that these areas are to be extended in certain directions. Perhaps I should have prefaced my remarks by saying that I do not think any treatment of the distressed areas can be isolated. It must be of a national, and almost of an international character. My final word on that point is that the people who are going to suffer from the uncurbed reactions of a trade cycle are the working classes in those areas. They suffer first and they suffer last, and Members on this side of the House stand equally sincerely for helping these classes, and I, for one, want to stress the importance of getting away from this trade cycle. As I see it at the present moment, there are about 340,000 men and women and young people who have been unemployed for 12 months and more. Of that number, approximately 200,000 are between the ages of 35 and 64, and I presume that a large percentage of that 200,000 are married people.

I think one can see, therefore, that the main problem attaches to these 200,000 people. They represent probably somewhere near 1, 000,000 citizens, and they are the great problem which we have to attempt to solve. One of the great difficulties with regard to these people is that many of them are unskilled. Secondly, owing to the lapse of time they have become, to a certain extent, physically and mentally degenerate. It cannot be helped. They are soft from the point of view of labour, and mentally they are depressed. To deal with the first point, perhaps an hon. Member opposite who sits for a Welsh constituency will put me right on this. Is it a fact that a miner who has been out of employment for a number of years is regarded as a dangerous person to take down a pit? [HON. MEMBERS: "No."]

Mr. George Hall

May I put the hon. Member right? He is not regarded as a dangerous subject, but if he has been away from the pit from four to five years, it is almost impossible, if he is 45 years or over, for him to regain that standard of physique which will enable him to do the heavy manual work which he previously did.

Mr. Peat

I am most grateful to the hon. Gentleman. That is what in essence I had in mind—the difficulty for a man to get back to employment if he has been out a long time and is over a certain age. A man of 35 to 64 who has been living in a certain district with his family is not the sort of person you can move about the countryside. It is difficult to take him and put him on a road job Too miles away. I have enormous sympathy with these people in their immobility, whereas I have no sympathy with the young people in their desire to remain at home with their parents. The hon. Member for West Fife (Mr. Gallacher) is laughing at me.

Mr. Gallacher

It is not a bad desire, to remain at home with their own people.

Mr. Peat

It is a bad thing if they continue to be dependent on them.

Mr. Gallacher

Give them a job.

Mr. Peat

The problem with regard to these 200,000 people is that unless we take quite separate and individual action with them they are going to become the lost legion of our generation. Every day, every week, every year that goes by makes their position more difficult. If you look at it from the point of view of 200,000 families, it is not such a big problem to deal with as that of the whole of the unemployed or the whole of the distressed areas, and I would recommend with all the power I have that these people should be dealt with individually, family by family, constantly under supervision. I am very glad to see that the Unemployment Insurance Committee are advising their representatives that it is not good enough just to pay out money. You have got to do something else. Not one moment should be allowed to elapse while these people are allowed to drift. You have got to keep them fit. There are reconditioning camps at present in existence, but very seldom does a man who goes to a reconditioning camp for three months get a job, and there is a good deal of disappointment in that fact. That should be changed. If you get these men reconditioned and fit, you should see that they get a job of one sort or another afterwards.

With regard to public works, unless they mean the utilisation of a great deal 'of raw materials wanted in other directions, now is the time to put them in band. A large number of public works -want doing at the very doors of the Special Areas. There are roads to be built—national roads. There are rivers to be cleaned. These polluted rivers in the part of the world where I come from are an absolute standing disgrace. Beautiful rivers which used to be clean and wholesome are now open sewers, and they run practically through the distressed areas, within easy reach of these people. Then there is the other side, the more spiritual side, the voluntary, work by which the neighbour gets to work on these people. I am glad to think that in County Durham there are at least 10,000 out of the 39,000 in receipt of public assistance who are in contact with these voluntary associations, which give them something to think about, and something to do. We have to keep these people always under our closest watch. We have got to give them friendship, and this they are getting through the voluntary associations. We have to give them work where it is possible, but that may not always be possible.

There is one other thing. I understand that in some cases in some of the big Employment Exchanges, particularly in North London, the staffs are inadequate to cope with the work of finding the right man his right job. There is a tremendous delay in getting these jobs for the men. A young Scotsman who went into one of the North London Exchanges had taken every trouble to qualify himself for various trades. He was very persistent, but nothing happened for five months. Finally, he was sent to a friend of mine who was doing voluntary work, who got the man a job in a fortnight. The Employment Exchange had been pegging away at that man for five months, but with this touch of personal help he got a job in a fortnight, his brother-in-law and the rest of the family came to London, and they got jobs easily. I hope that the Minister will look at that question and see if there is anything in the complaint I have made. I appreciate that Members have not the information which is in the hands of the Minister, and we speak rather in the dark, but what I have said to-night is what I believe most intensely, and after great consideration I think that within it there is the solution of this difficulty. I hope that some notice will be taken of it.

7.16 p.m.

Miss Wilkinson

I hope that the hon. Member for Darlington (Mr. Peat) will not mind if I do not follow him into some of the more general questions that he has raised. I will deal with his remarks on steel before I have finished. I would like to call the attention of the Parliamentary Secretary to the Ministry of Labour to the fact that while his Minister has been one of the foremost in talking about prosperity, and while his Premier tries to suggest that all we are having to deal with are the black spots, the Minister has to-day admitted that over xoo districts have applied for inclusion in the Special Areas scheme in addition to a large number who would like to be included but who do not want to be given the name of Special Area. On looking it up, I find that 47 per cent. of our industrial population are either already in the areas scheduled as Special, or are in areas asking to be scheduled or which have similar unemployment figures. That is the other side of the Government's talk about prosperity.

When we have a problem like that, what is the use of suggesting that transfer is any real solution to this problem? Where are the people to be transferred? Are they to continue transferring to London while the Government sit idly by and let them come to this area which is so vulnerable that it is a standing invitation to somebody to bomb it when any question of war appears on the horizon? People talk about transferring as though once the unemployed get out of the Special Areas they are quite comfortable and nobody need bother any more. A stream of people come from my constituency—and other hon. Mem- bers have the same experience—to this House begging for the price of a night's lodging because they get into this area and have nowhere to go when they get here.

There is a serious part of this problem for which those of us who come from the Special Areas find it difficult to see a solution. In the whole of his speech the Minister concentrated on these suggestions for new trading sites and the building up of new industries—presumably small industries, because by the definition they have to be unable to provide sufficient employment by reason of the general depression in those industries. They are, therefore, not the main industries. The Minister talked about these new industries, which he has discussed in every speech I have heard him make in this Parliament, but which, so far, have failed to be realised, but he does not say a word about the opportunities that are being lost by this Government to use the power that they have. I do not know whether the hon. Member for Darlington realised the depth of cynicism in his remarks about the iron and steel industry. They sounded very nice in the hon. Gentleman's delightful and polite voice and gentle manner, but what did they actually amount to? They amounted to a plea that the iron and steel trade in this country should be in close co-operation with the firms that already own them, and that, in order to meet the complete breakdown that is coming, they should have a rationing scheme in order that their plants should not be further extended, that their profits should be maintained, that the orders should be there! when the armament pool is open. As the hon. Member for Anglesey (Miss Lloyd George) said, these orders do not wait to be pigeon-holed. The opportunity the Government have lost is so to plan the great steel industry that it would have been possible to have a rationing scheme, not in order to support somebody's profits, but in order to serve the interests of the country. It is no good talking about restricting prices when we have people buying anything now in order to get the stuff. The President of the Board of Trade could have had the power from the House any time he liked to ask for it, so that he could ration and plan, and it is dodging the issue for him to say, "We have not the power."

Mr. Peat

I want to make three statements in answer to what the hon. Member has said. I did not suggest that all the new plants should be made to depend on the present plants. If I used any words that gave her that impression let me withdraw them. What I had in mind was that any extension should be on the best economic lines. There is a world shortage of steel to-day, and however much people clamour for it it cannot be produced and must be rationed. From the point of view of expansion, the hon. Member must rest assured that the steel industry for the last two or three years has been expanding to the best of its ability to meet the demand for steel. Because a new steelworks has not been built in Jarrow, it does not mean that the industry has been doing nothing in other parts of the country.

Miss Wilkinson

The first two points of the hon. Member give me my case, and the third is not true. We know that extensions ought to be done as an economic proposition, but is it economic to patch up some of the plants that are being expanded in order hastily to meet the demand when it could have been planned for beforehand? I am not altogether blaming the iron and steel trade in this matter. The figures they placed before the President of the Board of Trade were unduly pessimistic. I am not saying this in regard to Jarrow only, for the steel industry is a much bigger question even that the question of Jarrow. The President of the Board of Trade has admitted these figures to be hopelessly wrong, but who was in a position to know that they were wrong? The Government themselves. The Government cannot pretend to say that they started thinking about disarmament only after the Prime Minister made that speech in which he said he tricked the lot of us in order to get the power to rearm. When he was deciding to do it he must have known that there would be this overwhelming demand for steel. Yet, two years ago, when the plans were being suggested, the President of the Board of Trade sat absolutely quiet and let the whole thing go by, and then threw up his hands and said, "There is an opportunity we have missed, and we have to face the situation as it is."

This is only symptomatic of what we are having from this Government all the time. They miss the big opportunities of planning on a big scale. They will not look ahead. Even when they had the information that this rearmament is coming on they did not look ahead. They just sit still and do nothing and then we have the spectacle of the Minister of Labour coming forward with the present proposals. I am sorry for him, if I ever was sorry for a man, having to get up and speak about these pettifogging schemes which, even if they come to anything like fruition, will take years to do so. I could have sympathised with him if he had said, "We are in the middle of this rearmament boom and we know what the situation is, but what we are planning in the Special Areas Bill is something that will take the place of the boom afterwards."

It is not only the question of steel. There is the question of Government factories. North-Eastern Members have had before them the careful statement of the North-East Development Board, who point out that when considering the employment given by the armament programme it must be remembered that, while a great deal of work had come and would come to shipping yards and munition works on the Tyneside, no Government factories had been started in the district. All the Government's shadow factories for the manufacture of aeroplane parts were also to be started outside the Special Areas. That is to say, the Government go to manufacturers and say, "You ought to start industries in the Special Areas and we will arrange a beautiful trading site for you," yet the Government themselves do not take the lead and set an example. They will go anywhere except to a Special Area. They will rip up Maidenhead and some of the loveliest valleys in Pembrokeshire, and will go anywhere to put up factories except to the Special Areas.

Mr. Magnay

If the hon. Member will read the White Paper again, she will find that on the margin of Gateshead there are to be munition works.

Miss Wilkinson

The hon. Member for Gateshead (Mr. Magnay) must not tell me what is going to happen on Tyneside. What I am saying is that the Government put forward such things as we have heard from the Minister of Labour, but when it comes to anything really big in the way of shadow factories and important works, the Government give no lead. How can the Government expect private employers to do it, unless they are to be spoonfed to such a degree that other employers will begin to protest? When I come to my own constituency, really it is almost impossible to speak patiently of the way in which the Government have treated that area. I do not want to be merely a voice saying, "Jarrow, Jarrow," but the conditions there are so dreadful, and when the Government try to say what they have done, what have they done for that area? They have amalgamated the figures of unemployment between Jarrow and Hebburn and so made it utterly impossible to find out what the situation in Jarrow really is, and they call that a means of solving the unemployment problem. As to transference, if you take away all the young people, what on earth will you have left?

I want to ask whether we can get something definite from the Parliamentary Secretary, when he replies, on this question. We have had deputation after deputation to the President of the Board of Trade and to every single Minister whom we could get to agree to listen to us, and now we are faced with a number of hints that there is something being done, that there is something in the wind. The hon. Member for Guildford (Sir J. Jarvis), who spoke very bitterly and with some knowledge a few days ago, did not sound too hopeful, but there is a very great deal of hope in the area, because of certain hints that have been passed that at last something is being done. If ever there was a town of which it was true that "hope deferred maketh the heart sick," it is this town of Jarrow, and I want to ask the Parliamentary Secretary whether it is possible now to give us any assurance that we are not being pushed on and pushed on, month after month after month, just as we were with the iron and steel scheme, or whether the Government are really prepared to do anything at all for this area, except to organise propaganda.

I am very interested to see the way in which it is being said that there are no skilled men there, and so on, and, therefore, that there is really nothing to be done. You cannot go on like this with areas such as Jarrow. Jarrow is one area, but other areas are just the same, and we come here asking the Government at least to tell us the truth. That would be so much better than having vague hints thrown out all over the place. If they really mean that there is no hope for these areas, except what they can get out of this rearmament programme—and you are only going to give them driblets at that—then at least say so, but these hints thrown out here and there, so that nobody quite knows what is happening, and the only thing that we do know is that for these unemployed men nothing seems to be happening, are too cruel. If we could only get from the Parliamentary Secretary something definite, it would at least let us know whether we have to hope or whether the Government just mean to let these areas sink into the mud that the capitalist system has produced.

7.34 p.m.

Viscount Wolmer

Yesterday we had from the Leader of the Opposition a very moderate House of Commons speech on a problem with which we are all equally concerned, and I think his speech evoked a great deal of sympathy on this side of the House. I am very sorry that the hon. Member for Bishop Auckland (Mr. Dalton), when he spoke on a subject which equally concerns all Members of the House, adopted a different attitude and really used the Special Areas to deliver a pure, party attack. I regret that approach to the question very much indeed, and, if I may say so, I think the hon. Gentleman's speech was further marred by disgraceful insinuations in regard to the location of the munition works at Chorley, insinuations which he had absolutely no right to make. Of all forms of allegation, an insinuation, where the speaker does not commit himself to a definite statement on which he can be pinned down, is the most contemptible. Three-quarters of these factories, if not more, are going to be put up in the constituencies of hon. Members opposite, and to insinuate that, because a particular constituency is not represented by the Socialist party, therefore there has beeen some political jobbery, is altogether unworthy.

Mr. W. A. Robinson

Does the Noble Lord suggest that the sites have been picked in the constituencies of hon. Members on this side more than any others?

Viscount Wolmer

I am not making any insinuations at all. I am quite certain that all these sites have been chosen on their merits and that hon. Members opposite have not used their influence in the matter any more than any influence was used in the matter to which the hon. Member for Bishop Auckland referred. I am not making any insinuations; I am merely protesting against insinuations of this sort being brought into this discussion.

Mr. Tinker

I have heard in Lancashire that these factories are going into the constituencies of Conservatives, and I think it is well that it ought to be known to-day whether there is any truth in that or not.

Viscount Wolmer

If the hon. Member has any evidence for that allegation, he ought to make it across the Floor of this House, and he ought to submit that evidence for examination and cross-examination in debate. If the hon. Member has not got any evidence of that, I say that he ought not to make the allegation. I must also add that it is very unfortunate that when the Minister of Labour read out an encouraging and important list of new factories, for the establishment of which the Government has been able to arrange, there was not a single cheer from the benches opposite. The faces of hon. Members opposite denoted nothing but profound gloom at the prospect of thousands of men getting employment.

Mr. Logan

Is the Noble Lord not aware that the statement was definitely made that about 14 or 15 were under consideration, but definitely that only two were in operation?

Viscount Wolmer

Not at all. The Minister of Labour read out a new list, which I should have thought would have been greeted with cheers in every quarter of the House, and I can assure hon. Members opposite that if they would only approach this problem in a non-party spirit, they would get a great deal more sympathy from all quarters of the House than by the tactics adopted by the hon. Member for Bishop Auckland. Certainly some of us were disappointed by what we read in the White Paper, which seemed only to cover four or five of the recommendations that Sir Malcolm Stewart made in his third report, but the Minister of Labour this afternoon has added a number of important decisions of the Government, which did not appear in the White Paper. I hope very much that they do not indicate the high-water mark of the Government's activities in this matter, but that more announcements of this sort will follow as soon as ever the Government are in a position to make them.

I, for one, certainly want to pay a tribute to what the Government have done in tackling the Special Areas problem. Those of us who have ventured on occasion to make suggestions and criticisms certainly are not unmindful of what has been achieved, and I venture to say that it is no insignificant record that is set forth in the White Paper. Hon. Members opposite are not doing a service to the cause in trying to belittle what is really a constructive, creditable, and helpful achievement; and the suggestions which the Government have now brought forward are new and bold ones. They may not go the full length that some of us would desire, but nobody can possibly deny that they are entirely novel expedients which the Government have had the courage to adopt, and I, personally, should like to thank them for doing so. It must also be remembered that the very success that the Chancellor of the Exchequer has achieved in restoring industrial prosperity in other parts of the country has thrown the Special Areas into sharp relief. It is most unjust to contrast the state of the Special Areas with that of the rest of England without giving the Government credit for having brought about the very noticeable improvement in the rest of England which they have achieved during the last five years.

Mr. E. J. Williams

Is the Noble Lord aware that the Government have abstracted from the Special Areas, by way of the application of the means test, 10 times as much as they have poured in under any of their schemes?

Viscount Wolmer

I do not in the least accept the hon. Member's figures, and I do not think they are relevant to the Financial Resolution now under discussion. Having said so much, I want to enter a plea that the Government should go on and go farther in tackling this great, new, difficult, and unprecedented problem. I am quite sure that the Minister of Labour is right in concentrating on trying to foster light industries. One of the chief causes of the plight of the Special Areas has been that they were in many cases dependent on a single great industry, and I am sure the Government are right in trying to have as big a diversity of industries as they can. That is one of the best insurances which you can get against a recrudescence of this situation in the future.

To my mind, the most important avenue which the Government have not yet fully explored is that of the location of industry. The Minister of Labour, speaking to-day, reminded us that there is not an unlimited supply of new industries. That is a truism which we must not forget, and it makes this problem of the location of industry all the more urgent. I do not in the least regard the appointment of a Royal Commission as a delaying move. There are Royal Commissions and Royal Commissions. We do not want a Royal Commission of the character which the hon. Member for Bishop Auckland boasted his Government had appointed, the Royal Commission on drink, which he confessed or almost boasted had simply been appointed in order to shelve the question, and in order that some other Government would have to deal with their report. We do not want a Royal Commission of that sort, and I am sure that we are not going to get it. I hope we shall get a small Commission and that its members will be men of constructive minds who will be able to bring forth in a very few months, or even weeks, an interim report on which the Government can act, because I am sure that this question is urgent.

It came to my knowledge in the course of business only a few days ago that a builder claimed to have contracts for 23 factories in the West End of London, and that shows the extent to which these new small factories are being run up in the London area, which I am sure, for the reasons which the hon. Member for Bishop Auckland gave and for the other reasons which Sir Malcolm Stewart gave, it is not the right policy for this country to allow to continue uncontrolled. If the Government say that they require more information before they can embark on this admittedly drastic scheme of national town planning, we cannot possibly deny them that request. But while this Royal Commission is sitting it seems to me there is a practical step the Government could take which would be helpful. An authoritative announcement should be made by some leading Member of the Government that they are very much concerned with this question and they should make an appeal or issue a warning to local authorities in the areas round about London and Birmingham and such places not to peg out claims for new factories pending the report of the Royal Commission.

I understand that one of the problems with which the Government will be faced in tackling the question of the location of industry is the large sums of money which local authorities in the vicinity of London and Birmingham have spent in preparing ground for factory sites. If that is so, a warning from the Government that any local authority which continues to peg out a claim of that nature does so at its peril, might possibly have a deterrent effect, and I hope that my right hon. Friends will give that matter their consideration. It is not only local authorities which are doing this. One hears of issues being made by public companies and of the formation of private companies which are buying land round London and raising money in order to develop those areas for factory sites during the next 10 or 20 years. That is going on every day; a big scheme came to my knowledge only a few weeks ago. Again, I think that an announcement from the Government that people who embark on such schemes will from this day forth do so at their peril would be a helpful step, and a perfectly reasonable and just step to take. All plans of that sort ought to be kept in abeyance pending the report of this Royal Commission; othenvise, we may find that we have lost considerable opportunities in connection with new factories.

The other matter to which I should like the Government to give their close attention is the appointment of a Minister for the co-ordination of special area problems. I associate myself with the hon. Member for Bishop Auckland in that desire, though the reasons why I think such a Minister is required differ in many respects from those which he put forward. Everyone has seen the good work which the Minister for the Coordination of Defence has been able to achieve during the few short months lie has been at work. Surely similar work of a very important character could be performed if one of the members of the Cabinet, or some new Minister, were given the duty of co-ordinating Government activities in regard to Special Area problems. If there had been such a Minister installed a few months ago, surely we should not have had the fiasco of the Maidenhead Aircraft factory, to give only one example.

A very important suggestion was made in the Press a few weeks ago by the hon. Lady the Member for Wallsend (Miss Ward) that there should be a survey of new industries required in this country for the purposes of national Defence or national self-sufficiency. I am not aware that any such survey has ever been undertaken. It is a survey which would cover practically every trade and every branch of industry, and it may well be that if properly undertaken it would make out a case for the establishment of some 20, 30 or 40 new types of light industry; and that case having been established, the Government might offer facilities to those who were prepared to take the risk of establishing those industries in this country, and offer such facilities as are set forth in the White Paper for putting the factories in the Special Areas. That also seems to be work which a Minister for the co-ordination of Special Area problems would be able to achieve.

Then there is the question of coal. The right hon. Member for Hillhead (Sir R. Horne), speaking here some months ago, said very truly that the whole Special Areas problem was to a large extent the problem of coal, but since he spoke the situation has undoubtedly changed, and now, although there are something like 200,000 coal miners on the unemployment register, there is a shortage of miners in many pits and a great shortage of coal at the present time.

Mr. J. Griffiths

I am sure the noble Lord does not want it to go out from this House that he has suggested that there is a shortage of miners.

Viscount Wolmer

In some areas.

Mr. J. Griffiths

May I ask where are the areas in which there is a shortage of miners?

Viscount Wolmer

I have been informed that there is a shortage of miners both in Lancashire and in Warwickshire —that statement has been made—and there certainly is a very great shortage of coal there. But I do not intend to go into that question, and I hope I am wrong. The point is that the Minister of Labour is undoubtedly justified in postponing consideration of the proposal for an export subsidy for coal at the present juncture. But this state of affairs- will not always remain, and there is a longterm policy to be undertaken in regard to coal as well as the short-term policy. This is the sort of problem I should like to see somebody in the Government considering. Perhaps the right hon. Gentleman who is going to reply to-night will tell me whether it is being considered and, if so, who is considering it.

Then there is the question of oil-burning and coal-burning merchant ships. The Government are, very rightly, giving a subsidy to our merchant shipping. Would it not be possible to weight that subsidy so that in future all the shipping that is to be built should, as far as possible, be built for coal-burning rather than oil-burning? It seems to me that the Government might tilt the scale by means of their subsidy, and also by other means, so that they definitely gave an encouragement to our merchant shipping to use coal instead of oil. It would be of permanent assistance to the coal trade. That is just the sort of thing which a Minister for the co-ordination of Special Area problems might be able to think out and bring to the notice of the Cabinet as a whole.

Then, of course, there are questions like the Caledonian power scheme, about which we are going to hear a great deal to-morrow. A matter of that sort is so intimately concerned with this Special Areas problem that it would have been helpful if the Minister of Labour had felt justified in announcing to-day the policy of the Government on that particular scheme. The point I am trying to make is that this Special Areas problem has to be considered as a whole, and that while it touches a dozen different Departments the problem itself is a whole. Therefore, there is a good case for some Minister of the Crown who is in touch not only with the Ministry of Labour but with the Board of Trade, the Ministry of Health, the Scottish Office and the Ministry of Agriculture, to co-ordinate the efforts of all those Departments towards the solution of this problem. I believe that is a better and wiser method of tackling the problem than proceeding by the method of special commissioners, which, although it was perfectly right when it was started, ought not to be regarded as a permanent method. One of the evils of the system of special commissioners is that it has a tendency to put the problem in a pigeon-hole where Members of Parliament and Members of the Government are apt to overlook it. We want the whole problem to be in charge of a Minister who is in daily contact with his colleagues here.

I would make an appeal to the Government to increase the energy with which these good works have been pursued and are going to be pursued. I will give an instance of what I have in mind. I have been informed, and I shall be glad if my right hon. Friend whom I see taking notes on the Treasury Bench will correct me if I am wrong, that Sir George Gillett is not giving his whole time to this question. It seems to me to be absolutely wrong that the Special Commissioner for England should not give the whole of his time to this problem. If I am wrong in that statement I hope that my right hon. Friend will correct me. As he does not correct me I am afraid there must be some truth in it. If that is so, surely that is tackling the problem with your left hand, and we need to have a man of the utmost energy who is prepared to give his whole time to the job. I would pay him a fair and proper salary in order that he might devote his whole time to it.

There is another question I should like to ask the Government. When the Secretary of State for Scotland speaks I hope he will tell us what is the attitude of the Government in regard to certain of the recommendations of Sir Malcolm Stewart. In his Third Report last October Sir Malcolm Stewart made 20 recommendations. So far as I can make out the Government has given effect in its own form to something like seven or eight of those recommendations, and there are To or a dozen which have not been adopted. It will be helpful to us if the attitude of the Government in regard to those remaining recommendations can be indicated. I do not suggest that it would be reasonable to expect the Government to be able to bring in proposals at once to deal with all these 20 recommendations, because some of them do not admit of that sort of treatment, but at least it would be helpful if the Government could tell us what their attitude is towards some of them. In particular, I should like to know their attitude regarding recommendation i8, which is— That attendance at instructional centres on the part of young unemployed men in the Special Areas should no longer remain on a voluntary basis but be subject to an approved measure of compulsion. The Committee will remember that Sir Malcolm Stewart wrote three very strong paragraphs in his report on that question. This is a matter which the House and the Government ought not to shirk. Do the Government accept Sir Malcolm Stewart's statement that there are a very large number of young men who refuse to attend the instructional centres but who are drawing full benefit of unemployment relief? If so, what do the Government propose to do about it? It is wrong from the point of view of these young men and also from the point of view of the State that that matter should be left where it was when Sir Malcolm Stewart wrote of it. If the Government are tackling the Special Areas problem from every angle that they can think of, that is one of the angles that demands action.

Finally, let us not forget that the period of rearmament is a godsend to us so far as the problem of the Special Areas is concerned. It gives temporarily a very valuable fillip and assistance but it will not last long, and it is necessary that during the three years while the height of rearmament employment continues, the Government should be able to develop other more permanent sources of employment and to replan so that when the rearmament movement comes to an end there will be something to take its place. It is for that reason that we want to see this matter more energetically handled in the future than it has been in the past.

8.3 p.m.

Mr. F. Anderson

I do not intend to follow the noble Lord into the whole of the aspects of his speech, but there are two items to which I would refer. One is in regard to the factory that is being built at Euxton Junction, near Chorley. Whatever the Noble Lord may think, there is a feeling abroad, rightly or wrongly, that the strategical position has been the only factor in the decision to build this factory near Chorley. Within 30 miles of that place during the last War Zeppelins came. Is that not a factor that should have been taken into account? Moreover, some of the nicest countryside between Preston and Chorley is being brought to book for the purpose of establishing that factory there. Surely, it was within the means of the Department concerned to establish the factory somewhere in a position that would be more strategic.

Perhaps the Noble Lord is not aware that this junction is a bottle-neck junction. All the trains that pass to the west from north and south must pass through that junction. They also pass the bottle-neck at Preston, and the whole of the train services must cross the Ribble. Therefore, we have a river that can be followed from the air and a series of railway lines that can be followed from the air. Those lines serve East Lancashire and Yorkshire, and the main lines serve the principal districts of West Lancashire, and also London. Consequently, the establishment of the factory at Euxton Junction has created a smell in certain quarters. Moreover, the whole of the labour for the construction of the factory has to be imported from several miles away. Leyland and Chorley are not depressed areas as depressed areas are understood. The Leyland motor works is doing more than full time. Consequently, apart from what was said by the hon. Member for Bishop Auckland (Mr. Dalton), I can say without doubt that there are more opinions than one as to why that factory is being put up at Chorley.

The next point was in regard to the shortage of miners. I happen to represent a mining constituency and I am interested in this subject. If there is a shortage of miners, where does the machinery of the Ministry of Labour come in? I understood that we had a machine that could operate and find work in places where the work was required. If there is a shortage of miners in some areas, why does not the Minister of Labour solve the difficulty? That is a fair question to ask, because when these statements are made they create the impression that the miner is a person who is not prepared to do his fair share at the proper time. From my division there have been scores of miners transferred to the Kent coalfields; they have been compelled to go. Therefore, the argument adduced by the Noble Lord does not bear examination.

The hon. Member for Darlington (Mr. Peat) made reference to transfers. A large number of young people have been transferred from my division to other parts of the country, and we are now faced with a problem, seeing that the Whitehaven mines are to reopen. The cry from that part of the country from the older miners is that they require the assistance of the younger miners to make efficient pit workings. What is the problem going to be? Is it common sense to transfer your young people to other districts and then expect them to come back when the industries that are being revived find themselves in a serious difficulty, in that the pits have to be worked by the older men? That aspect of transfer is a serious question. I have had instances of three and four being transferred from one family to other areas. That is a serious matter for the homes of those people. We are told that it does not matter, that so long as there is work in the other areas they ought to be transferred. We say that the work should come to our areas instead of our people having to go away.

The Minister of Labour referred to the reopening of the Whitehaven mines. I am prepared to give all credit where it is due for the creating of the feeling in the town that at last something good is to take place, but there is a moral to be drawn from the reopening of the White-haven mines. When those mines were closed they were under private ownership. Had the mines been publicly owned they would not have been closed down for a single day. Consequently, I submit that there has been no real merit to the Government so far as the reopening of the mines is concerned. Up to a certain point the Government have had to rely upon the fund promoted by Lord Nuffield. However, the reopening of the mines is welcome news to Whitehaven. In the course of further remarks the Minister was not able to tell us that any new industries had been established in the West Cumberland Special Area. I cannot understand why a factory like the one that is being built at Chorley could not have come to West Cumberland, where no airship came during the last War.

We can safely claim that the Government have not succeeded in bringing any new industry to the West Cumberland area. Some weeks ago application was made to S.A.R.A. and sanction was given for a certain industry, but the people concerned are still having to try to find cash in order to be allowed to come into the Special Area. If industries are to be brought into the Special Areas something real and effective will have to be done for the small man who desires to undertake something real to bring new industries to those areas. If the Government mean business they will have to speed up their procedure for the examination of proposals for new industries. I have had brought to my notice several cases where the delay that has taken place in the examination of the proposals has discouraged people from taking steps to come into the Special Areas.

The Government ought to set up some kind of investigation department for the benefit of people who are bringing out new patents, and who at the moment have to spend practically the whole of their spare cash in getting them on to the market. In the machinery that the Government are setting up they ought to find ways and means whereby persons who have patents which could be worked should have special consideration, and thus avoid their having to go to all the expense that they have to incur at the present time.

The Minister mentioned that trade organisations will be consulted. That is a very serious step to take. I wonder if that expression means the trade unions as well as the employers' organisations. If certain trade organisations desire to stop new industries going to those areas, what is the use of asking them for advice? They will reply that there is no need for new industries to be established. Workers' organisations ought to be consulted as well. I would like to turn to the question of iron ore. The proposals in the Financial Resolution do not go far enough. I would like to know how, under these proposals, iron ore can be brought to the surface. What proposals are the Government prepared to make? The private employer candidly says that it is too expensive for him to get ore from mines that have been closed down. That matter should receive consideration at the hands of the Government, especially as iron ore is so important to the iron and steel industry. Cannot machinery be set up for locating ore and sinking shafts? Those operations are so expensive that the Government should find means whereby this raw material can be found as early as possible and put to the best use. The proposals in the Resolution will not allow that to take place. I do not think the Commission have the power to adopt the course which I am suggesting.

In regard to local government services, I would point out that water is required in the Special Areas as in other areas, but in two of my districts they have been told that the fund for water purposes is already exhausted. There have been serious reports as to the condition of the water, but the local authorities are not able to put any scheme into operation. They have to wait some time before they can do so. If the proposals on the Paper were widened in scope, this matter would undoubtedly receive favourable consideration. Special Areas should not be at a disadvantage as compared with other areas. Large blocks of houses in some of the Special Areas have not hot and cold water, let alone other services that are usually supplied in more prosperous places. Those authorities desire to carry through proposals which will find labour for unemployed people in their districts.

In regard to slum clearance, in one or two of my districts clearance schemes have had to be held up because the authorities could not afford to carry them out. They have to delay them as long as possible, and housing associations are having to be formed. If the local authorities have done their best to build houses why should not the same financial assistance be given to them as is given to housing associations? In regard to roads, which are very important for attracting new industries, special proposals have been made for a West Coast road. I would ask what is actually taking place in that connection. A West Coast road is very important from the point of view of Defence. By going to the west side you avoid the terrible conditions with which you have to contend on the Shap road, as we understand it in our part of the country. With regard to the Duddon Estuary, I should like to ask what is happening to the scheme, which has been put forward by responsible people. The local authorities, because of their special difficulties, are not able to take their full share of responsibility. Sir Malcolm Stewart said that he was prevented by the Special Areas Act from offering assistance to local authorities for the provision of roads or bridges. If that is one of the difficulties that are stopping the development of a district, why should not the Minister come forward with suitable proposals that will help to remove those difficulties? Undoubtedly that would help the Special Areas very materially in securing new industries.

Sir Henry Fildes

The hon. Member is doubtless aware that grants are to be provided by the Ministry of Transport for the making of new roads and new bridges. It is not possible to have it both ways.

Mr. Anderson

I am aware that sums of money have been provided for roads and bridges, but the hon. Member should also be aware that the Special Areas have not been able to do what they required to do, because they were not wealthy enough to carry out the proposals. Is that any reason why the Special Areas should not have added facilities, but only what the other areas have already got? Surely they ought not to be put to inconvenience because they happen to be poorer, because their rates do not bring in so much in the pound as those of other districts. Surely, seeing that the effort is being made to bring these new industries to them, they have a right to claim that their transport facilities shall be as good as those of other districts.

The Minister has announced that West Cumberland is at last to be one of those districts that are going to have what are termed site factories. That proposal is rather belated, but, nevertheless, I am glad to welcome it, because I think it will help very materially the coming of new industries into the district. Another proposal that has been touched upon is the extraction of oil from coal. I am wondering why, while proposals can be made for the production of oil from coal in one part of the country, proposals for its production in another part of the country are turned down. A proposal was made for the establishment of a low-temperature carbonisation plant in the West Cumberland area, but it was turned down. Was that as a result of consulting trade organisations? I should like to know why, if a plant can be established in one area, it cannot be established in another area when application is made through the usual channels. I have been informed that technically it would be in every way a commercial proposition to produce oil from coal in the West Cumberland area, and, moreover, if that could have been done, it would have been possible to try out another proposal of Sir Malcolm Stewart's with regard to the storage of oil in those districts where its storage might be regarded as reasonable. That could have been done in the West Cumberland area.

Another question to which the Government ought to pay more attention is that of food production, particularly in regard to canning factories If it is possible to produce aeroplanes in Government factories, why should it not be possible for the Government to put down their own factories for the production of canned goods, so that they might be stored in case of emergency? I cannot understand whole areas waiting to be considered from the standpoint of food production, while at the same time we have hundreds of men out of work who would be prepared to do what they could to make the production of food an economic proposition. At the same time the matter is important from the standpoint of defence, and it would be possible to store that food ready for any emergency.

My last point is with regard to the location of industry. Is it not possible for the Government to experiment in this direction, and to exercise some pressure with people who might desire to establish industries outside the Special Areas? Let me take an example. Supposing that I wanted to establish a new industry, say in London, I should have to find a site. Is it not possible to ask for the assistance of the local authorities in notifying the Government Departments concerned, so that they might use a kind of persuasive pressure to get those industries into the Special Areas? If that were done it would help very considerably some of the Special Areas which are in urgent need of new industries to-day. Can the Government tell us, can the Minister tell us, why that persuasion cannot be used? I see that Sir Malcolm Stewart has done what he can by asking the Federation of British Industries, but I should like to see the matter carried a step further, so that, when applications are made for sites, the local authorities might be asked to notify the Government Departments, who might exercise their machinery of persuasion in asking those responsible for such industries to take them into the Special Areas. The Government have here a great scope and a great opportunity, if they would only take it, because, if location were brought about, it would help to solve part of the difficulties with which we are faced.

8.34 p.m.

Major Herbert

I was interested to hear the speech of the hon. Member for White-haven (Mr. F. Anderson), who made many fertile suggestions which I think will be appreciated by the Committee and by the Minister. They show that there should be great collaboration between the Commissioner for the Special Areas and the local authorities, and they also show what a tremendous amount the Government and the country are doing for the Special Areas. The hon. Member asked, what can the Government do to help those areas which are now distressed; and that is a question which we should consider seriously, not on party lines, but on the lines of the broader issues which may face the country whatever party may be in power. It seems to me that the subsidisation of local authorities means that the local authorities become too dependent upon the central authority, that is to say, the Government. They depend entirely upon Government assistance for their solvency, and they depend on the Commissioner for other help. We know that each local authority wants the best that it can possibly obtain—each clamouring for assistance. I think the House will be faced with a realisation of the enormous work that the Government have been doing in these areas. But the Commissioner's first task is to prepare sites and prepare trading estates, and he should be careful not to usurp the functions of local government, otherwise local authorities may begin to be dependent and not be able to function in the best way. I think the Commissioner's tendency has been rather to usurp those functions. He has taken over maternity services, he has built hospitals, he has built and subsidised to a large extent sewerage schemes, which must be a charge upon the local authorities. They are so dependent upon that subsidy that I think they are losing their independence in the proper sense. We who come from highly-rated counties are all grateful for the recently passed Local Government Bill, with its new formula, which will give great assistance to the rates, but it is quite possible that no formula will, in fact, be able to help those areas. It is possible that completely new districts will grow up around the site-companies which we are envisaging setting up in this Bill, and, therefore, something extra may be required in the future.

There is always the question whether the areas should be extended or contracted. Near where I live there are two small townships next door to each other, one in one parish and one in another. The first parish is in a rural district which is a Special Area. The works in that area are subsidised and the rates are, therefore, a good deal lower than in the neighbouring rural district. There the rates are extremely high, because it is within an administrative county containing Special Areas, which adds to the incidence of the rates, and, because the council does not wish merely to cry for more subsidy but wishes to be independent, it feels that it cannot carry out work that it would like to carry out because it would be adding too much to the rates, and would be going beyond its obligations. It would mean depopulation of the district. Another annoyance to the district is that, if work is being carried out though a highly-rated district, but not a Special Area, by the Commission for Special Areas, 85 per cent. of the labour is brought from the Special Area, though there is plenty of labour available already. This shows the way the Bill operates. I should add that I have written to the Minister about it. It seems to me that the great question is whether the areas should be extended or whether the work of the Commissioners should be still more concentrated on the Special Areas.

The hon. Member for Bishop Auckland (Mr. Dalton) talked about the levelling of public assistance, and there is much to be said for it. In certain areas where everyone is impoverished and where there is a demand for some compensation for members of public assistance committees, I am rather wondering whether the question should not eventually be faced whether the work would not be carried out as well, and more humanely, by civil servants acting as specialists. I think if we spread the high rates of public assistance and special services, like the Goschen loan, throughout the area, we should be spreading the distress far further than the Special Area itself, creating more distress, stopping industry in those areas, stopping everything going on, and it might eventually lead to further ruin. The local authorities of these areas ask that the burden should be carried on the broad shoulders of the nation. They send deputations to see Ministers. The travelling expenses of certain councils have become very high, and they are sometimes accused of not running their affairs as they should. In this respect I should like to say what commendable work has been carried out in my part of South Wales by two Members of the party opposite. Their councils are in great difficulty and are sometimes rather apt to lose their sense of financial responsibility. There is much to be said about what the hon. Member for Neath (Sir W. Jenkins) and the hon. Member for Pontypool (Mr. A. Jenkins) have done in keeping those authorities going. That does not mean that all is well with those authorities, nor that sometimes some notice should not be taken of what goes on. If an authority is so bankrupt that it depends entirely upon subsidy, it is inclined to lose its financial sense, and that is a great danger which, I think, the House should face. If local authorities are dependent upon subsidies, a certain lack of resilliency is induced. The Government have been doing much to help these authorities but, if that were changed, it is possible that there would be a crash which would go right through the country, creating even greater distress.

Hon. Members opposite desire more compulsion in the location of industry. I can quite understand that, because if a firm was compelled to go to a certain area and failed, they would say that the Government would be responsible for running that firm. In other words, the firm would be nationalised, which would suit a certain political point of view very well. If the firm were nationalised, what about its competitors in other districts, who would be killed by the running of the one firm by Government aid? For these reasons I welcome the Government's plan to have a Royal Commission to consider limitation of expansion in certain areas. The Opposition suggestion that there should be no new factory without permission would cause great delay. There is only one thing that I would like to add to reinforce what the Noble Lord the Member for Aldershot (Viscount Wolmer) said, and that is, that if Bills are considered in this House to set up works in certain places which are not distressed areas, I hope that the Government will be in favour of setting up those works in the distressed areas, and not elsewhere.

We should realise that the Commissioner has a specific task to carry out. The first Commissioner was sent to find the distressed areas, like a dove from the Ark, and the next task of the Commissioner then appointed was to concentrate upon preparing those areas for the advent of trade, to prepare the sites and to improve amenities by the provision of clubs, etc., in those areas. Paragraph (b) of the Financial Resolution is a clearing up of that proviso, so that the Minister should be able to subsidise the improvement of streets which could not be subsidised by the Minister of Transport, and is a good addition, as are also the other provisions of the Resolution, particularly that in paragraph (a) which goes beyond Sir Malcolm Stewart's report and adds rent, in addition to rates and taxes, to be subsidised by the Government. The encouragement to estate companies outside the area I particularly welcome. I may be old-fashioned, but there is one thing I would like to see in connection with the setting up of site factories. I hope that it will not prevent that feeling of helping each other which should exist in industry between employer and employé. The employer is responsible to a great extent for the working conditions and the wages, and for the housing of his workmen. If a firm comes to a trading estate or to a new factory site built by the Government and owned by the Government, there is a danger, unless the Commissioner steps in between, that the employer will merely treat his men as machines, and that the men will cease to have the same interest in the firm as in the days of old. That is a danger which might go very far and be a great hindrance to industry on those lines in future.

As to the loan provisions of the Bill, the most important part that the Government can play is the preparing of the site and the urging of industry to come to those sites, and the preparing of localities and the urging of industries to come to those localities. If a man wants to borrow money and he goes to a lender who is a private individual, or a bank, or a financial corporation or the Government, surely the security required by the lender is always greater in proportion to the public responsibility of the lender. One often finds that when a Government Department is lending money it is far more difficult to deal with than a private company. In the "Evening Standard" the other day I saw an advertisement of a company offering to lend money for factory sites. There is, however, one link missing in the connection of the two. We have in this country now great confidence in the future, and that confidence is enabling industry to expand and firms to be set up which might come to the distressed areas.

I do not quite understand what happens supposing a firm wishes to come to a Special Area. The procedure is rather difficult, and I am not quite clear on that point. It would not only have to approach, as now, the different development companies in different areas, but would also deal with Government Departments. There should be some central authority, preferably in London, to give full details of the site and of the labour available, and that same authority should have the authority to lend the money if necessary. Otherwise, if a firm had to go to the Treasury for money, and to somebody else to find out about the site, the firm would be apt to lose interest, or possibly a competitor might step in. If we could deter industry setting up in certain places, and if it were possible for industry to obtain fuller details of the places to which the Government would like them to go, it would be a great step in advance. The Government policy should be Cabinet policy, and there should be much greater cohesion between the Cabinet, the industry and the place to which the Government policy required that industry to go. The Ministry of Labour is responsible for the Special Areas as a labour problem, but they are so inter-related that I wonder whether consideration might not be given to setting up some other machinery to bring them together, as the bringing in of new industries is most important if these areas are to be developed.

I will not deal specifically with other questions, except to say that in South Wales, naturally, coal is the great product of that district. Anything that can be done for the development of the coal trade should be gone into, and I cannot understand the statement which I saw in the paper on Friday that there is not enough coal for home use in South Wales. There should be an inquiry as to why we cannot obtain sufficient supplies and why orders cannot be met. One suggestion at to how the Government could help the Welsh coal trade is by using more smokeless coal themselves. I asked a question the other day, and the answer which I received from the Office of Works was that they burnt 40,000 tons of smokeless fuel, 105,000 tons of coke and 125,000 tons of other fuel in the course of last year. The Smoke Abatement Society and other bodies are entreating us to take steps to preserve the ancient buildings of this country, and so I make the plea, which many hon. Members will appreciate, for greater use of smokeless fuel and South Wales coal. I wonder if it is possible to initiate some sort of inquiry as to what we can manufacture in this country which we at present import. The Noble Lord suggested a commission to consider what we could manufacture in the way of arms that we are importing. But I would like to go a step further and consider the manufacture of some of the goods we now import. By preventing the import of certain goods which we might manufacture at home, by the encouragement of industry in this country, and especially through this Act the Government will do much to help the Special Areas, and to bring industry to areas of distress.

8.55 p.m.

Mr. Tinker

I want to make one or two remarks on the Financial Resolution, although it is a little difficult to do so when you find that point after point which you had intended to bring before the Committee has already been made by other speakers. The right hon. Member for Aldershot (Viscount Wolmer) dealt with a remark made by the hon. Member for Bishop Auckland (Mr. Dalton) and said that it was not a statement in keeping with the traditions of the House. It was the statement which the hon. Member for Bishop Auckland made in regard to the factories which are to be put up in Lancashire, particularly the factory to be put up near Chorley. I should like to bear out the feeling there is in Lancashire on this point. There is a feeling there that the Government are looking after their friends, their political representatives in this House, and that all the factories to be put up in Lancashire are being put up in the vicinity of constituencies of hon. Members opposite. One prominent politician in Lancashire, not a member of this House although he hoped to be one, made a statement in a speech that there was no hope of any Labour Member getting anything from the Tory Government.

Mr. Storey

Is the hon. Member aware that the trading estate on the North-East coast has been put in the constituency of the hon. Member for Chester-le-Street (Mr. Lawson).

Mr. Batey

No, it has not.

Mr. Tinker

I am speaking of Lancashire. The hon. Member for Wigan (Mr. Parkinson) and the hon. Member for Westhoughton (Mr. R. Davies) represent districts in Lancashire which are the hardest hit, but nothing is to be done for them. I understand that the next factory is to be in the vicinity of Bolton. That seems to bear out the contention that Labour Members in the House of Commons will not get much from the Government. We may be wrong, but that is the view which is held, and if it is wrong the Government should remove the impression by giving us the reasons why factories have been put up in these particular places. I do not agree with the hon. Member for Whitehaven (Mr. F. Anderson) on the matter of vulnerability. That question ought not to enter into the matter at all, because modern science has made it possible for airships to go all over the country in a few minutes. There is no question at all of tactical positions in this small island. I would fix on a site which was suitable having regard to the requirements of these Special Areas.

Then the noble Lord the right hon. Member for Aldershot made a reference to coal mines, and said that he understood there was a shortage of miners in Lancashire and in Warwickshire. Ten years ago we had over 100,000 miners working in Lancashire, at the present time only 50,000. In any part of Lancashire you can come across unemployed miners who would be only too ready to take any position in a mine. In fact, one of my complaints is that a number of collieries have been closed down in Lancashire recently and that the Government have not done anything to keep them going. The Minister of Labour said that what happened during the course of the Debate did not make it very easy for him. I can assure the right hon. Gentleman that we have no personal feeling against him. I believe he is trying to do his best in his position. Our protest is against the Government to which he belongs, and particularly the Cabinet. We believe he is not getting very much of his own way, and our resentment is very bitter against the party with which he is mixing. If we shout him down I hope he will realise why it is being done. Hon. Members opposite must not take it either that there is not a great deal of feeling behind our outbursts. There is a deep feeling in regard to what is happening in these distressed areas. There are black spots in Lancashire which ought to be dealt with, and I am pleased that the Minister under this Money Resolution says that he can bring in parts of Lancashire which are not termed Special Areas and that they will be able to receive some consideration which was not given to them before.

There are one or two things which should be brought to the notice of the Minister. There are in certain parts of the country works being closed down. I think the causes should be examined immediately. It is not right for the House of Commons to wait until the blow falls. This afternoon we are dealing with the effects of something which everybody feels should be removed, but we are making no attempt to get at the sources of the disease. We wait until the disease has got a hold and then try to cure it. The Minister of Labour has intimated that a Royal Commission is to be set up. I was not able to follow exactly what he meant, probably because we were guilty of not allowing him to explain fully and clearly, and probably because he talks so fast—that may be a virtue or a weakness. But I want to know whether the Royal Commission is for the purposes of looking ahead, of finding out the causes of this distress. I want to know whether the Commission will be able, if there are any signs of a breakdown in any part of the country, to investigate the causes and prevent, for instance, a mine closing down. Six months ago a number of collieries were closed down in Westhoughton. In my constituency, it was for some economic reason with which I cannot deal now, and in Westhoughton it was because of the flooding of the mines. Will the purpose of this Royal Commission be to watch such things and to instruct the Government on these dislocations of trade? Unless that is the purpose of the Royal Commission, it will fail in its duty.

Everyody realises that in manufacturing armaments we are creating a position which in a few years time may react upon us. Many of us welcome armaments because they bring some employment, but if the danger of war recedes, it will mean chat the arms will no longer be necessary and the factories established to manufacture them will be required for some other purpose. If what has happened in the past happens again, the Government of the day will not pay any attention to the men who are thrown out of work in that way until they have been unemployed for months or even years, and all over the country distressed and Special Areas will be created in the places that have been manufacturing armaments. Unless the Royal Commission is to deal with such matters, we shall simply be hiding our heads in the sand, and not doing anything to meet future probabilities.

There was another remark made by the right hon. Gentleman which I thought was rather ill-timed. He said that the people who are crying out against armaments are hoping to get factories in their areas. That was the effect of his remark In distress men turn anywhere, and people in areas where there is a great deal of unemployment, when they know the Government have to establish these factories for armaments, are urging their Members to try to get the ear of the Government in order to have a factory in their area. I was asked by the town council to make an appeal for a factory to be set up in the vicinity of Leigh. I told them that we were not as badly hit as some other places and that we ought not to make such an appeal, but they said that other places were doing it, so why should we not do it? Reluctantly I did so, feeling that I had no right to do so, but knowing also that everybody else was doing so. In our distress we are driven to that, and in an effort to get work for his people, everybody is sinking his principles, as it were, and trying to get a factory in his area. The House of Commons should try to remove that sort of thing.

Surely, if we are preparing our Defence Forces to meet a possible invader, it is not too much for us to prepare for the economic future of our country. It is our job to do that, and not to allow things to slide until we get Special Areas, where men and women have been suffering year after year, and no attempt has been made to help them. The House of Commons ought to be ready to meet these emergencies, and I appeal to the Minister to try to set up some sort of system such as I have advocated to the Prime Minister several times, in order to deal with this matter. Not long ago I urged the creation of a Minister whose job it would be to watch for signs of a breakdown of trade in any area. If the Government would do something on those lines, we might at some time or other be in a position in which we would not have Debates such as that which we are having to-day and would not have such feelings created on this side of the House against the other side. I am not saying that hon. Members opposite have not as good intentions as we have, but they do not see the matter in the same light. Almost every week we go among our people, and I do not think hon. Members opposite do that as often as we do. I do not think they see the problem as vividly as we do. I hope that as a result of this Debate the Government will realise that unless they do something very different from what they are now doing, such scenes as we had this afternoon will become more frequent.

9.12 p.m.

Mr. Magnay

It happens that to-day I have received two letters concerning the factory on the new estate in my constituency. The only time I can give to that matter is Thursday morning at Newcastle and Friday at Darlington. Consequently I shall not be able to be in the House on Friday, and I consider myself fortunate in having caught your eye, Sir, thus being enabled to make a few re- marks in this Debate. I am sorry that the hon. Member for Bishop Auckland (Mr. Dalton) is not in his place, because I am going to suggest that his whole argument was based on the failure of the Government to do anything, whereas all the opposition of his hon. Friends yesterday and to-day resolves itself into a complaint that the Special Areas scheduled could not be extended and the financial benefits increased. I suggest to hon. Members opposite that if they would, in the words of the hon. Member for Bishop Auckland, institute a preliminary inquiry into the White Paper and pay some attention to its contents, their speeches would be altogether different. In my simplicity, I had supposed that we were discussing the Financial Resolution, which states in plain language: It is expedient to continue the Special Areas (Development and Improvement) Act, 1934, until the 31st March, 1939, and to make further statutory provisions. I understood that was the text, but I have never heard so many speeches so far away from the text as I have heard this afternoon. The discussion has certainly not been upon what I, in my simplicity, understood was the subject under discussion. Speaking not only for myself, but as secretary for the Northern Group, I ought to say, in the first place, that we welcome these proposals as the furthest advance we have yet seen in regard to legislation for the Special Areas. As a Member representing a Special Area, I propose broadly to give some of the reasons why the 1934 Act should be continued, as is the purpose of the Financial Resolution, and the reasons why I welcome the further benefits which will accrue to the North-Eastern area in general and to my constituency in particular. My reasons are the best of all reasons—that, in fact, the 1934 Act has been of immense benefit to the North-East Coast and to my constituents.

For purposes of clarity and cogency I take some of the provisions contained in the White Paper, though I do not propose to bore the Committee by going through them all. Paragraph 2 of the White Paper states in general what the Commissioner has done, and I wish to draw attention in particular to what has been done in my own constituency. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite may think that I am the exception which proves the rule, but is not that all the more reason why I should express my thanks? Would I not be ungracious and ungrateful if I did not express the thanks which I feel to be due? I had something to do with the question of the old Imperial Chemicals Industry site at East Gateshead. While other folk were deriding the powers of the Commissioner I went to see him. I did not ask anybody's leave. I thought it was my job to do so, and, frankly, I went to see him and persuaded him to look at the site. He did so and we bought the site with the generous assistance of the Imperial Chemicals organisation. My friend the mayor of that time, Alderman Armstrong, saw him too, and persuaded him to buy the land near the Tyne in the neighbourhood of the Pipewellgate Road, and the consequence is that in those two respects alone, under the 1934 Act and the powers given therein, almost £100,000 of benefit has accrued, with great advantage, to Gateshead.

This afternoon the Minister has told us that the corporation which had charge of the levelling of the old site has turned it over as part of the trading estate on the water front. In these respects I suggest there are very solid grounds for satisfaction on Tyneside. Under paragraph (a) of the Financial Resolution the first point is that it waives, within certain limits, the prohibition which was imposed on the Commissioner in the 1934 Act against assisting undertakings 'carried on for gain. I imagine that few have realised the significance of that provision. For the first time the Commissioner has not that estoppel to thwart him in his efforts. I appreciate what the North-Eastern Development Board suggested when they advocated the appointment of a Minister who would be directly responsible for the Special Areas, but what could Sir Malcolm Stewart not have done if he had possessed this special power which is now being granted? It is an amazing extension of the powers of the Commissioners. The power to contribute towards Income Tax and rates was recommended by Sir Malcolm Stewart in his third report, but this proposal is wider in its scope. The power to contribute towards rent is additional to the inducements recommended by Sir Malcolm Stewart. It is true that he suggested a period of seven years and that in this case the period is five years, but altogether the extensions of the powers of the Commissioner are immense and I do not imagine that anything but good can result from the freedom which the present Commissioner will enjoy compared with the previous Commissioner.

In regard to paragraph (b), under the 1934 Act the Commissioner was prohibited from making grants to local authorities for works in respect of which grant is payable by a Government Department. I hope that my old colleague, Sir George Gillett, who is in Wales to-day, will read this Debate and particularly what I am going to say now. I tried to persuade the Commissioner in the past, that the Pipewellgate Road, on the level of the river, should be extended another mile and a half in the direction of the new estate. This would make transport easy. It would be on the river level, avoiding the necessity of going up narrow precipitous, tortuous and dangerous ways, and I suggested that it should be kept on the one level on the waterfront and that this would enable the trading estate to be used with the greatest effect. But I was met by the fact that the Commissioner could not recommend any grant in regard to a public road. I then pointed out that the road was only half made and was a cul-de-sac and was not a public road within the ordinary meaning of the term. I was reminded of Thomas Hardy's story in "Under the Greenwood Tree" of the stillborn child. The father used to say, "If Jimmie had lived, he would have been 21 years old to-day." I suggested that there was no use talking about a public road if it had not yet been made. As I say, I hope that my old colleague the present Commissioner will not allow any lawyer or Treasury official to stand in the way of using the discretionary powers that are now available and deciding that this is a street within the terms of this Financial Resolution.

Mr. Logan

Are we to understand that the hon. Member first approached one gentleman and got a concession from him and that he is now proposing to intimidate another? Is that how he goes about business?

Mr. Magnay

In Liverpool it may be called intimidation, but I call it persuasive eloquence. I believe in lathering a man before you shave him. Some folk call that tact and others call it discretion, but very few people like a dry shave, and the proper thing is to lather them and lather them well before the operation. With regard to the North-Eastern Housing Association some Corporations have agreed to work with it. I am glad to say that my own Corporation, although with a Labour majority, has agreed to accept it. South Shields has refused, but North Shields has agreed. I can only say that they are putting up hundreds of houses in Gateshead and doing it very quickly to the great advantage of the town in health and every other respect. On 24th February last, 250 houses were completed and 3,163 in course of construction, while 689 schemes had been prepared, 2,478 schemes were in course of detailed preparation and 6,508 further schemes were being placed before the authorities, a total of 13,086 which, when completed will represent £1,000,000 in capital value.

Mr. E. Dunn

On a point of Order. Am I to understand the hon. Member to say—

The Chairman

The hon. Member must not attempt to raise what he calls a point of Order for the purpose of interrupting the speech of the hon. Member for Gateshead (Mr. Magnay) and arguing with him. A point of Order is a point in connection with the procedure of the Committee, and it is not in order to interrupt an hon. Member's speech unless that hon. Member is prepared to give way.

Mr. Magnay

I do not mind giving way if I have not made any point clear.

Mr. E. Dunn

May I put a question to the hon. Member? Do I understand him to say that on the estates to which he was referring there have been 689 schemes approved?

Mr. Magnay

I am sorry if I have not made myself clear. I was talking about the total building in the distressed areas. I have spent two days getting out the figures for this speech and they are foolproof; they are indubitably true. I have got information from the Commissioner, and I have not the slightest doubt it is correct. If the hon. Member will check them in to-morrow's OFFICIAL REPORT, and make any inquiries he cares, he will find that they are correct. It is an amazing thing to me to recall the time when I was practically the only Member who asked the Government to persevere with the trading estate, not knowing then whether it was going to Gateshead or not, and how the idea was decried and derided by hon. Members on that side who now are complaining, and asking that they might have a trading estate or a site within their constituencies. It was a wise decision to concentrate on one good estate rather than to have two half-empty ones.

In paragraph 5 of the White Paper particulars of the North-East Trading Estate are given. Where is the trading estate? [HON. MEMBERS: "Gateshead."] That shows that with a little application even hon. Members may learn some geography. May I ask them to persevere in their studies? In the lap of the hills between Ravensworth Park and the hill on which the town of Gateshead is centred this estate is situated.

In 1920 I tried to buy this place as a housing estate. There were three other friends associated with me, Mr. Aneurin Williams, Mr. Gerald France, and Major Harry Barnes, and we and the son of Lord Ravensworth of that time agreed to form a public utility company to use this site as a housing estate, but because of the law of entail it could not be so used. The site can be seen by everyone travelling from Scotland to England. It will be noticed I put them in proper order. It is bigger than the acreage of Hyde Park and Kensington Gardens combined. There is room for 400 factories, and in due course employment will be given to 40,000 men and women. Already 20 factories are booked. These proposals in the Financial Resolution might result in a sound scheme of borrowing money, securing ordinary share subscriptions from the Nuffield Trust, for leasing a factory on the site which in the first five years might get a subsidy which would cover the whole of the rent, rates and taxes. I commend it to any Scotsman or Yorkshireman in the House to think about.

The concentration of new light industries round London is a psychological matter. If there is a big factory started on the Great West Road, such as a cement works, someone says, "This is an excellent site; we will go there, too." A trading estate, well built and a model for all the country to see, backed by the financial help of the Commissioner, should be a real inducement to get new industries to come to the North. Now as regards paragraph 8, the Special Areas Reconstruction Act, we learn that it has been going only four months, and with the assistance of these proposals and the great help of the Nuffield Trust, the engine can be quickened up and the Association can put their foot on the accelerator without any danger of big-end trouble. As regards Government contracts, paragraph 9, we learn that £41,000,000 worth of orders has been given by the Defence Department, and that £24,000,000 worth has gone to the Special Areas in the 18 months ended November, 1936, and Tyneside has had its share.

Regarding Government establishments, paragraph 11, we learn that Britley is to have a munition factory at a cost of £400,000. When the hon. Member for Jarrow (Miss Wilkinson) said that nothing was going into the North-East Special Area, I challenged her with regard to those armament works. They are in the Chester-le-Street area, close to the borders of my constituency. Again, I say that there could not be a better place. We have the men, we have the money, and we will deliver the goods. As regards the extension of existing works, I would like to sound a note of warning about the closing down of the Scotswood engine works for amalgamation with Vickers-Armstrong for armament purposes. It may be that these engine works would have been closed in any event, but it is a serious thing if such works, where apprentices can learn the skilled trade of an engineer, are closed down, for then we shall be in the position when the armament boom is over that we were in after the War. I want to give that warning to the powers-that-be, so that they may see to it that something can be done to retain skilled craftsmen on Tyneside.

As regards paragraph 14, assistance to the rates by Government grants, the hon. Member for Spennymoor (Mr. Batey) said the other day that Durham County had lost by derating and the discontinuance of certain grants. I am sure he did not intend to mislead the House, but under the block grant Durham County received £1,750,000, and under the new formula a further grant of £258,000, has been made. I have it on the best authority, it is in a speaker's handbook for the county council elections last week, which was sent to me for some reason in a confidential envelope. Gateshead has received nearly 3s. in the pound more, or £72,000 more. After the White Paper was issued the borough treasurer of Gateshead received a letter from the Assistant Accountant-General of the Ministry of Health saying that there had been such a marked improvement in the position of the North-Eastern areas, and Gateshead in particular, that the grant was down from £183,000 to £178,000, or £5,000 less. I felt like two gentlemen of a certain persuasion who, seeing a fire brigade go alon the street, said "Interfering beggars!" I felt very much like that with regard to this letter. They might have found that out months ago instead of now. However, we shall have 3s. off our rates, which are a great deal better than the 23s. 10d. at which they stood when the Labour party were in power in Gateshead some years ago.

With regard to the reduction of unemployment as referred to in paragraph 13 of the White Paper, it has been most gratifying generally, although not nearly enough. It has amounted to 30 per cent. in the last two years in Durham and Tyneside. In Gateshead in January, 1935, there were 12,800 unemployed, or 45 per cent. of the insured population. In January, 1936, the number was 11,300, and in January, 1937, it was 8,900—or 3,90o fewer in two years. Again, I am grateful for that, but I would like to think that the increase in employment was in the same ratio as the decrease in unemployment. It is difficult to obtain accurate figures, but on a rough estimate I have made by deducting the known figures of unemployed from the total numbers of insured persons as recorded last July, I have calculated that 2,000 more persons are in employment as compared with two years ago. It is not nearly enough, but I am thankful that the trend is upwards, and I suggest that the Committee has no alternative certainly I have no alternative—but to support the Government heartily and gratefully in what they are doing.

9.39 p.m.

Mr. Burke

I cannot promise to emulate the hon. Member for Gateshead (Mr. Magnay), because I have never had as much practice as he apparently has had at testimony-making. He informed us that he took two days to prepare his speech,, and I hope it is not going to be a case of "Love's labour's lost." He is, at all events, grateful to the Government for what they have done for his part of the country, and I suppose he would agree with me that his gratitude is a lively sense of favours still to come. If I may pass him a word of advice, I would suggest that while he said he believes in lathering a man before he shaved him, it is as well to remember that friends are like fiddlesticks, they must not be screwed over-tight. He told us where his factory is in Gateshead, but he did not enlighten the Committee where Gateshead is. It reminds me of another Member of the House many years ago who was trying to find the Land of Goshen. When he was told it was in Exodus, he said, "I know that, but where is Exodus?"

Mr. Magnay

May I tell the hon. Member—

The Deputy-Chairman (Captain Bourne)

There are many Hon. Members who want to speak, and each interruption only lengthens a speech.

Mr. Burke

The hon. Member seems to have been very successful in his application to the Commissioner, and the substance of his speech may be summed up in an adaptation of the words that "Sweet are the uses of adversity." I hope I may refer to a part of the country in which I am interested, and to consider it under paragraph (c) of the Resolution. There has been a good deal of talk about the Special Areas as they have been defined, but I am concerned with those parts of the country, and particularly that part of Lancashire, which is not a Special Area as such, but is one of those areas which we have always regarded as being so depressed and as having so much unemployment, that it ought to have had some special consideration. There are many people in Lancashire who do not like to use the term "depressed area" or even "distressed area." That is not because we are snobbish or want to hide the distress in those areas. It is because we feel it might have a wrong psychological effect. I do not know that the use of the term "certified" will alter the position very much. I do not know that anybody will want to consider themselves as certified by the Minister of Labour. We are not concerned so much about the name, however. The Minister of Labour said that the question of name interested a certain deputation, but I am afraid he missed the whole point. What the deputation really wanted was aid, some financial assistance that would enable them to get rid of the large pools of unemployment that existed in those areas.

Reference has been made to-night to the mining industry, and I understand that in Lancashire there are 100,000 unemployed miners. Paragraph (c) says that help will be given to those areas where there has been long continued unemployment in an industry on which the country is mainly or largely dependent. In Lancashire there have been many more unemployed among the cotton operatives for many years past. Before the War there were 600,000 persons engaged in the cotton trade, and that number has gone so low that there are only 350,000 engaged to-day. I am trying to interest the Ministry of Labour in the north-eastern part of Lancashire, the weaving area, which seems to have been neglected over and over again. I do not want to enter into the competition for a munitions factory in that part of the world. I do not know whether the Minister of Labour saw the statement of the Chairman of a large firm of engineers in Manchester a short time ago, in which he said they were not anxious to get war work and make munitions. What they were anxious to get was a steady flow of work which came by peaceful avocations. That is what we want in North-East Lancashire, where we have a large residue of people unemployed —adult labour.

Much has been said about transference, but transference has been distinctly harmful to the cotton trade. There is now—and I think it is likely to grow—a shortage of young labour in certain sections of the cotton trade, partly because the cotton industry in the past fell so low that young people were not attracted to it, and partly because they have been taken from these areas and transferred into other areas. That presents a very grave social problem. It is altering the balance of your social life, causing a wrong distribution of the age limits and levels in various localities, and presenting problems of a very far-reaching nature in all those localities from which young people are being transferred. A very much better method of doing the job would be, not to transfer young people from those areas, but rather to find ways and means of bringing industry back to them.

The Minister says that there is a limit to the number of new industries that can be found. We agree, and because there is a limit, you will have a scramble for those few that can be found. We do not want a scramble, and our suggestion is that the whole scheme of national development ought to be surveyed and that, on some definite national plan, industries ought to be located all over the country according to the needs, not of one area alone, but of other areas as well, because we have a scramble now between the particular areas and localities. It is a good many months since I had the privilege of moving in this House a Resolution on the location of industry. There was so much support for that Resolution that the Government withdrew their Amendment and accepted it. It is true that they accepted it, not with the principle of compulsion which they thought was in the Resolution, but rather by promising that they would give inducements for industry to go into particular localities. This White Paper suggests the kind of inducements that the Government have in mind, and we feel that they are totally inadequate to deal with the problem that we have, for instance, in North-East Lancashire. A few years ago in my own constituency there were 100,000 looms—there was roughly one loom for every member of the population—but to-day the number of looms has gone down to 48,000. Even if the cotton industry gains some of its former prestige and weight, it is obvious that you cannot employ again half the number of looms, that smaller number being made necessary, because you are working more looms per week.

There is no help for the cotton industry, as far as I can see, in the proposals contained in this White Paper. If the Government had said, "We have no proposals to offer you, but we hope that you will be satisfied, because we are going to take a much firmer hand in regard to trade agreements, or we are going to see to it that you get a better share of trade outside," we might have been satisfied, but there is no indication anywhere that the Government propose to come to the help of this very great industry. Some time ago the Government said that they were going to deal with this problem of locating industry. They now suggest a Royal Commission, the purpose of which, I believe—the Minister will correct me if I am wrong—is to inquire into this problem of the location of industry. If that is so, I wonder how long it will be before we can expect any real planning of the industries of this country so as to do justice between area and area and locality and locality. I do not see why a Royal Commission is necessary. We have had surveys of all these areas. We have had university surveys and surveys made by the Board of Trade, and all the information is in Government Departments now if there is any desire to act upon it.

I think I am not misunderstanding the Minister when I say that he said, to those who pour scorn upon the fact that the armaments programme of the Government will only provide work for four or five years, "Well, is it not very much better to have work for four or five years than to have no work at all?" But surely those are not the alternatives. It surely ought not to be an alternative between having work connected with war and no work at all. What we suggest is that the Government ought to have given us something else instead of the possibility of getting work through an armaments programme for these areas, and I hope that the Minister will go further and indicate to us that behind this scheme there is some really big proposal, some imaginative proposal, which will establish in those industries work which will last during times when the war fever has passed, or else that they will put down definite proposals for reviving those older industries which at one time enabled large numbers of our people to live in these areas. I hope the Minister will give us an assurance that these statements in the White Paper are not the last word for Lancashire, and at all events that he will consider that part of the county connected with the weaving industry for which apparently no provision has been made so far.

9.52 p.m.

Major Oscar Guest

It is with considerable diffidence that I rise to speak in this Debate, as I am not connected with any Special Area and do not claim any special knowledge, but as an industrialist I have visited most of these areas from the point of view of considering how one could set up works in any of them. I must own, as a stranger going to these districts, that the prospects of setting up a factory there are not very encouraging. You are shown places where factories might be built, but then there is no road to them, and gas, water, and electric light are problematical and not laid on. It seems to me that if you are going to attract industry to these Special Areas, where unemployment is acute, you must have something to offer the industrialist who is looking for such sites. That is why I think the trading estates are a most valuable contribution towards that effort. I have visited most of the trading estates this year. It is true that at present they are not in a very advanced stage. In fact, on the one in South Wales on the day when I was there they had started to break down fences only two days before. Industrialists who want to find factory sites do not ask for a great deal, but they do not want to be shown a field with nothing in it and no way of getting there, and I do not believe that it needs large sums of money to make some preparation—

Miss Ward

I wonder where are the areas which the hon. and gallant Member has been shown. There are many places in my part of the country where he could be shown excellent factory sites.

Major Guest

I have visited a number of sites. I went to Bishop Auckland, for instance, where we drove out to a reasonably level field which was difficult of approach. If the Commissioners had had powers to make a decent approach to that field and to lay on water and electric light there would have been much more inducement for an industrialist to go there. I feel sure that it is by the extension of the trading estates system that we shall get light industries of various kinds to go to districts where they are wanted, and that is why I welcome the reference in paragraph (a) of the Resolution to the letting of factories. I think that light industry can work reasonably well regardless of locality. I cannot see why a light factory should not work as well in West Durham as on any other site, provided that the land is flat and that you can get to it by road and rail.

I would proffer the suggestion that the people on the spot who are working at this problem should have more power to carry out the plans which they make, without the need for constant reference to London, which makes things difficult for them. I think we shall receive assistance in this problem of getting industries to the distressed areas from the shortage of labour in places such as London, Birmingham and Manchester. There will be an inducement to manufacturers to look farther afield to find labour as the labour problem grows more acute. Therefore, if we can make sure that when industrialists look for factory sites in these areas they are invariably shown them, I feel certain there will be a great increase in the movement of factories to them.

In conclusion, I should like to say that I believe the planning of industry has to come, and in that planning we shall have to consider not only the Special Areas but the prosperous areas. We have to even out the work which the country has to do among the population which there is to do it, and it is surely more economical to move the factories to the workers than to try to move workers about the country to the factories. I very much welcome the news we have been given this evening that a Royal Commission is to be set up for this purpose, and I believe the result of the planning of industry will be far-reaching.

9.58 p.m.

Mr. G. Hall

From the speeches delivered by hon. Members opposite it would seem that the Government have, at very little cost, stifled the revolt which was expected from some of their backbench Members, because almost every hon. Member opposite who has spoken appears to be quite satisfied with the proposals for which provision is being made in the Financial Resolution. I was surprised to hear the statement of the hon. and gallant Member for North-West Camberwell (Major O. Guest). He suggested that he had visited almost all the Special Areas but could not find a suitable site for a factory. May I ask whether he has ever heard of Merthyr Tydvil, and whether he has visited Merthyr Tydvil, Dowlais and other areas in South Wales which were so well known to ancestors of his?

Major Guest

Yes, I was there within the last three weeks. My point was not that those places could not be visited, but that you ought to find it comparatively easy to set up a factory, and the trading estate at Treforest is the only thing in that line. It is very hard to find a site in Dowlais.

Mr. Hall

There would be no difficulty in finding a site in Merthyr Tydvil. The site of the old iron works there covers many acres, and there is no shortage of water or scarcity of electricity, which can be provided at very reasonable cost. If there is one place in the country which should receive assistance and consideration from the hon. and gallant Member, if I may say so quite respectfully, it is Merthyr or Dowlais, and I wish that he would look again in that district and make inquiries not only with regard to sites but with regard to the amenities there. I think he would find it a suitable area for him or for one of the companies with which he is associated to establish works in.

The White Paper indicates that even yet the Government do not recognise the magnitude of the problem of the Special Areas. The Minister of Labour gave figures of the unemployed still in those areas. He said that in South Wales there are no fewer than 32 employment exchange areas with more than 30 per cent. of the men unemployed. He could have gone very much further, and could have stated that there were some areas there, very large areas, in which more than 50 per cent. of the insured persons are unemployed. The same observation would apply to some of the other Special Areas. That is an indication that, whatever may have been done, there is much more to be done. There have been a number of visitors to those areas, some even making pilgrimages. Some have rendered very valuable assistance, and some carry away with them sights which have not only oppressed them but worried them considerably. I wish that the Minister of Labour could have portrayed the sites at Dowlais and Merthyr when he visited them in the presence of someone else in October of last year. I think the sight of all the derelict buildings, not only factories but houses, and the hopelessness expressed in the faces of the men, women and children, would be sufficient to indicate that all is not well in those districts.

I say quite respectfully to the Prime Minister, the Chancellor of the Exchequer and some other leading Members of the Cabinet that before this legislation is finally decided upon they should not only send Commissioners or Committees to these Special Areas but should themselves pay them a visit. The Prime Minister himself was no stranger to South Wales in past days, but if he went there now he would see a very different South Wales from what he remembered before the War, especially in those centres where, year after year, there used to be a big production of iron and steel. Those districts are now nothing but centres of misery and hopelessness and helplessness. I think it is necessary to indicate to the House how the people there have suffered long years of unemployment and how it has caused a deepening of poverty, despair and helplessness. The patience of those people is enormous, but let the Government realise that it is not everlasting. Things cannot get worse, but they can certainly be made better, and the Government should see that that is done.

All those people were intensely interested in the plans which they expected the Government to divulge in the publication of this White Paper. They have been greatly disappointed. Their claims have been ignored. Whatever may be said by representatives of the Conservative party opposite, they do not indicate the feelings of leading Conservatives in the Special Areas. There is very keen disappointment over these proposals not only among Socialists and Liberals but among supporters of the Government. I daresay that the Prime Minister has heard of the "Western Mail," in South Wales. There is no greater supporter of this Government and of the Conservative party than that paper. It has been a consistent supporter. When the White Paper was published the "Western Mail" came out with a leading article, in which it said: South Wales is certainly not promised what was expected in the Government's White Paper on Special Areas. There is no hint of the bold policy which by general consent was recognised as necessary to aid the recovery of this district … The White Paper provides for no more than the minimum, excessively cautious, safe-at-any-price Amendment of the existing Act. It appears that the Cabinet has decided to do as little as possible. Not only is that the expression of a provincial newspaper, but some of the London papers, including the "Morning Post," came out with huge headings, "Not enough!" Those opinions are shared by every hon. Member on this side of the House. The proposals of the Government are not enough. They will not touch the fringe of the problem with which these districts are confronted. It can truly be said that the general opinion is that the White Paper represents the views of the Chancellor of the Exchequer and of the Treasury but not that of the Ministry of Labour. It is money, money, and money is the important thing. The White Paper indicates that from December, 1934, until the end of last year, £2,900,000 has been spent in the Special Areas—less than £1,500,000 a year, and the White Paper indicates that we are going to spend £2,000,000. What a contrast to the generosity with which the Government are dealing with the Defence programme. £1,500,000,000 to defend this nation against an enemy from outside and £2,000,000 to defend or protect our people from the enemy of unemployment in this country. In other words, £750 is to be spent on Defence for every £1 which is to be spent on the Special Areas. No wonder that the people living in the Special Areas are very dissatisfied with the proposals of the Government.

I wonder whether the Prime Minister and the Government realise what these areas cost in money at the present time. The Special Areas alone, as far as I have been able to ascertain, receive in unemployment benefit and assistance something between £20,000,000 and £25,000,000 a year. Last year Monmouth and Glamorgan received in unemployment benefit and assistance £8,500,000. That sum of money went to those two counties in one year. From 1925 to the end of last year those two counties received £71,500,000. The Government are quite content to spend this money on unemployment benefit and assistance. Why could not that sum of money have been used for the purpose of putting these people into employment? These huge sums of money have not provided one pennyworth of labour in return. Nothing has been contributed to the common weal, and hundreds of thousands of people are living in dire poverty and deteriorating in physique. Despite their characteristic steadiness they are rapidly losing their moral. Let the Government give one thought to the great contributions that have been made by these people in the earlier years, contributions which cannot really be estimated, and once that recognition is given there can be no question that instead of having unemployment benefit, it is work they want, if work is available. If they can be engaged in useful employment, that is what 99½ per cent. of these men require.

A whole lot of munition works are to be established. It is suggested that the construction of these works will in itself give a large amount of employment, that their establishment will be a contribution to the permanent well-being of these areas, and will afford a measure of continuous employment. It must, however, be remembered that in the next paragraph of the White Paper we are warned that some of these establishments are not intended for operation to meet even the present Defence programme but only to serve in a reserve capacity to meet war demands in the event of emergency. The labour required at the present time will be very small. Many of the Special Areas will benefit very little and chronic unemployment will not be relieved as a result of the establishment of sonic of these factories.

Can the Secretary of State for Scotland give us any information as to which of these factories are to be used during the Defence programme and how many are to kept idle waiting for the emergency to come? What is likely to be the position of the factory which is to be established at Bridgend? Is that factory to be used when it is constructed or is it to be one of the factories which will be erected and equipped with machinery and then remain waiting for the emergency? A definite statement ought to be made by the Government not only in regard to the factory at Bridgend, but in regard to every other factory which is to be established we ought to be told whether those factories are to be used, and the number of men who are likely to be employed in them. One of the most dangerous things that could happen would be to buoy people up with hope that there will be work available when it is not likely to be available in those districts. The Government have come out with a very large programme and we have been told that a factory is to be established at Bridgend which will cost several millions of pounds. We heard of that over 12 months ago, but I do not think there is a single man employed in clearing the ground. Certainly no building has been erected. May we hear how far negotiations have proceeded in regard to other factories? Have the other areas to wait as long as Bridgend has had to wait before any factory is established?

In the list is a number of factories, which have been referred to. It is impossible to state their cost or their location. One is a factory to be established in the Special Area of South Wales, at a cost of £160,000. Can we ascertain from the Government whether Merthyr Tydvil is likely to have that, factory? A good deal has been said about it, and no end of confidence would be given to the people in that area if the Government could make up their mind as to the location of works of that kind. I would ask a question about the mine depot which, the Minister of Labour told us, was to be established at Pembroke. Is that the mine depot which was to be established by the Board of Admiralty? This mine depot was partly provided for as far back as five years ago, and if that is the same depot the Government are unfair in stating that, in accordance with their present programme, that mine depot is to be established. They should he more frank about their intentions.

The present proposals consist of very few of the recommendations of the Commissioner. When the first inquiry was made by the Secretary to the Overseas Trade Department, Lord Portal and others, we were warned that financial inducement would be the only magnet which would attract industrialists into these areas. It is now proposed to empower the Commissioner to contribute towards the rates and rent of industrial establishments in those areas, and to give concessions with regard to Income Tax. Speaking for myself, meagre as those concessions are, I welcome them. They are a start, although they are belated. When the reports of the Secretary to the Overseas Trade Department, Lord Portal and the Chancellor of the Duchy of Lancaster were published, they dealt with those points three years ago. Valuable time has been lost. The gentlemen who conducted those inquiries did not do so for fun. They did not give their time or make their reports for the sake of putting those reports in the pigeon-holes of the Treasury. They were serious, but the Government at that time took no note of what they suggested. It was a relief to hear the announcement by the Minister that works other than munition works are to be established, and I was gratified to hear that a factory was to be established in my own area. While I am very grateful for that, it must not hide the general problem from me. The Special Areas are wider than Aberdare or South Wales; they cover the whole country.

I do not know any better person than Lord Portal to occupy the position of chairman of the new advisory committee which has been set up. He understands the problems of the Special Areas. I do not want to speak in too flattering terms, but in the very short time that he spent in South Wales inquiring into this question he was able to gain the confidence of all sections of the community, and from that day until the present time he has retained that confidence. Apart from the appointment of a Cabinet Minister to look after conditions in the Special Areas, I am sure that no one could be more sympathetic than Lord Portal or more desirous of bringing about a speedy improvement in those conditions. The Minister of Labour, in the course of his speech, referred to the reduction in the number of unemployed in the Special Areas, and the White Paper also deals with that question. But when the Minister was asked whether this reduction meant that 10,000 men had been placed in employment, he could not reply. We know that the reduction which has taken place in the number of men unemployed in the Special Areas has been caused almost entirely by the transference of these men from those areas. The Noble Lord shakes his head—

Viscount Wolmer

The figures are given in the White Paper.

Mr. Hall

The figures are given, but the numbers transferred are not given. If the Noble Lord will ascertain the number of unemployed in 1934, and the number unemployed at the present time, he will find that in January of this year there was a reduction of 106,000 as compared with January, 1934; but if he will look up the Ministry of Labour Gazette for February he will find that no fewer than 90,000 youths have been transferred from the Special Areas during those three years.

Viscount Wolmer

My hon. Friend is surely aware that the figures show that there was only a fall of 20,000 in the total insured population of the Special Areas.

Mr. Hall

The figures given in the White Paper show the number of persons unemployed—

Viscount Wolmer

At the bottom of page 8 of the White Paper it is stated that: The reduction in the total insured population of the areas in the period amounted only to about 20,000 as compared with a fall of nearly 120,000 in the number of unemployed.

Mr. Hall

If the Noble Lord takes the actual figures of the number of men unemployed in January of this year as compared with January, 1934, he will find that there has been a reduction of 106,000 in the number unemployed in the Special Areas; and if he will look up the Ministry of Labour Gazette he will find that during those three years, 1934, 1935 and t936, 90,000 youths have been transferred from the Special Areas. I have checked the figures, and I think the Noble Lord may take my statement as accurate. The actual provision for employment in the Special Areas in January of this year, as compared with January, 1934, means that no more than 16,000 persons have been placed in employment, and transference has been carried out to such an extent in the Special Areas that it has become a real menace to the future of industry. The present Commissioner, speaking at Cardiff only yesterday, referred to this policy as a policy of despair, and the Minister of Labour, if he will inquire of industrialists in the Special Areas, will find that they view with alarm the continuance of transference. There is considerable difficulty at the present time in securing the necessary suitable labour of young people to carry out work in the Special Areas, and, if a long view is taken of industry in those areas, such as a number of industrialists take—because they have begun to realise that labour is a most valuable asset—it gives ground for great apprehension as to the future of industry in those areas.

I want to put to the Minister who is going to reply one or two questions. The first is with regard to the grants that are to be given for the repair of streets. It is in paragraph (b) of the Resolution enabling the Commissioners to make grants towards expenses occurred by local authorities in the repair or improvement of streets in any Special Area which are certified by the Minister of Transport. Does that mean the carrying out of private street works, or are ordinary highways which have been taken over by municipalities to be assisted? In many Special Areas the municipalities have been too poor to look after their roads. Where rates are 24s., 25s. or 28s. in the pound they have had to save money, and the roads have had to suffer. The White Paper holds out great hope of the Special Areas Reconstruction Association, and the Government must know that much criticism has been levelled against the limited powers of this Association owing to the fact that the articles of association are much too rigid. Many applications for assistance have been notified and, after loans have been granted, they have refused them owing to the conditions that are applied. Will the Minister inform the Committee whether the articles of association are to be amended to obviate much of the criticism that has been made in the past?

Then, with reference to rate assistance, do I understand from the White Paper that the Government are quite content with the assistance that has been given to very heavily rated areas as the result of the revision of the block grant and that they cannot look for any further assistance in the matter? I take it that the relief of rates mentioned in the White Paper is simply to industrialists who establish factories in those areas. Again I do not minimise the advantages that are given to certain areas with regard to the revision of the block grants, but Merthyr Tydvil has had an increase in the grant allowing for a 5s. reduction, but still the rates will be 24s. in the pound after the 5s. has been allowed for. The county of Glamorgan has benefited to the extent of a 2s. rate, but the whole of the increase is eaten up with the increased cost of public assistance and with the refund to the railway. While there has been some concession given to Special Areas with regard to these rates, it is all eaten up.

I would that the Government had done something more than is being done on a very large scale to indicate their sincerity in dealing with this problem of the Special Areas. The coal industry is very largely the key to the problem of the Special Areas. I was very pleased to hear that a low temperature carbonisation works is to be established in Glamorgan-shire. I do not think the Government are paying the attention that should be paid to the oil problem. It is very well for the Chancellor of the Exchequer to smile, but 96 per cent. of the oil used for all purposes has to be imported. I wish the Government would pay as much attention to the home production of oil as other countries have done. It appears that they are not yet seized of the importance of research in this matter.

Why have we to wait for a process to be tried out in Germany before ever we hear anything of it in this country? Germany must not only apply the knowledge of her scientists, paid for largely by the State; they must put up a plant, try it out, prove it and, once it has been proved, the Government of this country is quite prepared to pick the brains of foreign scientists instead of applying themselves to the problem. The two great processes of producing petrol from coal which are being used and talked about in this country are German processes. Where is the British process? Is it that scientists in this country are not as clever as are the scientists in Germany or other countries, or is it that the Government are not prepared to spend the money to enable the scientists in this country to apply their knowledge? There is nothing which would give greater heart to the miners of this country and nothing that would relieve unemployment in the mining areas more than the establishment of a few of these plants.

I am not so much concerned about the economic position. Does the question of economics come into consideration when we talk of spending £1,500,000,000 on the fighting services? The cost of one battleship would enable two plants under the Fischer system or the Bergius system. Two plants of that kind erected in the mining areas of this country would, for 18 months during erection, provide employment for 20,000 people who are now unemployed, and after they have been erected and put into full production, they would provide permanent employment for from 8,000 to 10,000 people. While it may be necessary to keep up reserves of oil in the event of the emergency for which these reserves of oil are set aside, and while the Government would, in case of emergency, be prepared to spend not 10,000,000 or £20,000,000, but hundreds of millions to establish oil from coal plants in this country, they should do it now. They should pay more attention to the matter, and they would then give heart to the people living in the Special Areas.

I beg the Government to do something big and not to be niggardly. The Government have the power if they have the will. They can get the money, if they want the money. Do not let the men —and the women and children—who have suffered not for two or three years, but for 10 years, gradually deteriorating and losing their physique and moral, look in vain to the Government who have the power and the financial resources to turn on the tap at any time. Let the gates of plenty be opened not only for these instruments of defence, necessary as they may be in the opinion of the Government, but so that the great social scourge of unemployment in this country can be cured. Let the Government spend money as lavishly upon that as they are prepared to spend it upon their Defence plans.

10.34 p.m.

Mr. Elliot

The Debate has followed a very interesting course, and not the least interesting feature has been that, starting in rather a high temperature, the temperature has fallen as the Debate has proceeded and the Committee has become cooler and has devoted itself more closely to the problem under review. That is a most hopeful omen for the future in these Debates, and indeed for the solution of the great question we are met here to discuss this evening. We have all been struck by the sincere and thoughtful speech of the hon. Gentleman the Member for Aberdare (Mr. G. Hall). He has had a long experience of these problems and these areas, and he speaks with an intimate acquaintance of the problems of his people which will always obtain the sympathetic attention of the House of Commons. I was wondering whether his heart had not run away with his head at the end of his speech, when he said that the Government had power to turn on the tap of plenty—let it spend money as lavishly on peace as on war. Surely the hon. Member must recognise that the money for peaceful development must depend on the continuance of cheap money, on the capital which can be floated in these new industries, and if the Government begins to spend lavishly it would produce a rise in the rate which might make it impossible to finance these new developments, and thus defeat the very object we all have so closely at heart.

Mr. Buchanan

Why not spend the money?

Mr. Elliot

The hon. Member will see that if we spend £1,500,000,000 for the needs of Defence and another £1,500,000,000 for developments in peace we shall double the effect of what otherwise would have taken place, and it might well be a shock to the economy of the country. We must keep closely in mind the fact that the Special Areas are part of the nation, and that their problem will be largely influenced and may be almost entirely solved by a development in the commercial prosperity of the nation as a whole. Only by looking at it in that way shall we get a proper view of the problem which concerns us to-night, a problem not only of the Special Areas but of the resources of the nation. I say that as one who has spent much of his political life either in a Special Area or in areas adjacent to a Special Area. As a Member for the County of Lanarkshire I have had a lot of acquaintance with the problem, and as a Member for the City of Glasgow I have come into close connection with it. No Member for Glasgow can be other than deeply touched by a Debate on Special Areas.

The hon. Member for Aberdare asked a question as to the location of new factories, and he had a short passage with the hon. and gallant Member for the Camberwell, North, Division (Major Guest), The hon. Member for Aberdare, with a sense of the historic, invited the hon. and gallant Member for Camberwell to visit Dowlais; the Special Commissioner has arranged that the Dowlais site shall be cleared by the South Wales Trading Estates Company with a view to making it suitable for new developments. The hon. Member also asked about the location of certain other factories and in particular—I think this is characteristic of the demands which democracies make upon their servants—where the War Office and the Admiralty factories are to be located, and which are to be kept in full occupation and which are riot. That is the sort of information which, if it is asked for, is certainly not given in any dictator country. It might well be that to the Army chiefs it would be very embarrassing if there were given out at this Box not merely the exact location of all the factories, but the conditions in which they were running, which we intend to be shadow factories and which we intend for permanent activities. I will go as far as I can, but I cannot give the hon. Member all the information for which he asked. The explosives and filling factory at Bridgend is in replacement of certain filling factories at Woolwich. It will run up to a peak and then slacken off a little, but it will in fact be in more or less permanent activity. There are certain factories in Scotland, but I will not refer to their location, because the hon. Member was more particularly concerned with South Wales.

Mr. E. J. Williams

May I ask the Minister for something far more precise about Bridgend? It is in my constituency, and I am anxious to know something much more precise than the information which lie has given.

Mr. Elliot

I sympathise with the hon. Member, but I am sure he will realise that to give details about the factories at Bridgend and elsewhere would do exactly that which for public reasons it would not be in the interests of the nation or in the interests of Bridgend to do. I beg the hon. Member to be satisfied with the information I have given. I think I have gone as far as it is safe for a Minister speaking at this Box to go.

Mr. Williams

This matter has been so largely magnified at Bridgend that I am sure the inhabitants will suffer ultimately unless something decisive is said on the matter. Already the rents are inflated as though something tremendous were likely to be done in the near future.

Mr. Elliot

I beg the hon. Member to ponder over the answer I have given, and to consider whether it would be safe for me to say more. Certainly I could not give more information to-night, and I beg him to consider whether he can press a Minister of any Government to go farther than I have gone. As to the other factories, the Royal Air Force Depot is to be placed in Glamorgan. The Pembroke factory is, in fact, the Naval Mines Depot. The hon. Member for Aberdare said that this is merely deluding the people, because five years ago they were told that a Mines Depot was to be placed in Pembroke. Surely the hon. Member misses the point. It is to carry out the programmes which have been foreshadowed for years past, but for which we have not been able to get the money, that we are spending these sums now. It is of no use saying the people heard about the Mines Depot five years ago. If they heard about it for another five years and nothing were done in Pembroke, it would not improve the unemployment situation there. Work is about to commence, and it is for that reason that the Chancellor of the Exchequer has to find these tremendous sums. Do not let the hon. Member say that nothing has been done, because something was promised five years ago. I thought the hon. Member's objection was that promises had gone on for too long, and that it was time they were being translated into action.

Mr. G. Hall

Does the right hon. Gentleman understand that provision was partly made for this Mines Depot in the Naval Estimates as long ago as five years and that it is not something which the Government are providing in connection with their programme?

Mr. Elliot

Money may have been provided, but then, by what a former Chancellor of the Exchequer described as a process of clawing back from the Departments money which had already been voted to them, money has been saved and used to relieve the general burden of taxation. There is no hidden fund out of Estimates voted in past years. As the hon. Gentleman, who has himself been a Member of a Government, knows very well, money not spent by a Department is a very present help to the Administration in time of trouble. For five years we have talked, and now we are going to act, and it is that which the people of Pembroke want to know, and not whether money was or was not provided in Naval Estimates in the past. As for the factories in South Wales, the War Office factory is to be located at Llandarcy and the Air Ministry factory is to be at Cardiff. Extensions of private works in various parts of the country I cannot give in more detail, and, as to the other factories mentioned by the Minister of Labour, such as the glass factory and the biscuit factory, I cannot give the sites because they are still under negotiation.

I think I have dealt with the main questions which the hon. Member put specifically to me. I was glad that he welcomed the concessions which are being made. He also asked what was meant by the reference in the White Paper to the repair of streets. In the past the Commissioners had the power to make grants for the repair of private streets, but not grants for public highways. This Resolution will give that power and that I think is the answer which the hon. Member would desire. He said that the assistance which was being given in rates was not enough and asked whether the Government themselves were content with the proposed relief. He suggested that more energetic steps should be taken to get the rates down. Surely, the most energetic step which can be taken is the attraction of rateable value into the areas. That will be of greater assistance to an area than the increases of grants for relief of rates which are being made. I admired the hon. Member's arithmetic by which he sought to show that a relief of 4s. or 5s. in the pound was practically nothing. There are areas which would be glad to have it.

Mr. G. Hall

I simply said that it would still leave 24s. in the pound.

Mr. Elliot

I only say that considerable sums have gone towards these reliefs. The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) spoke of them as niggardly and paltry reliefs. A relief of £250,000 a year to the county of Durham may be regarded as niggardly but it is more than that county has got from other Governments. A relief of £98,000 a year to the county of Lanark is something which, as a former Member for that county, I am glad to see going there, and a relief of £525,000 a year to the City of Glasgow is a relief which as a Glasgow Member I am very glad to see going there.

Mr. Buchanan

Has the City Treasurer thanked you?

Mr. Elliot

The Treasurer of the City is effusive in his appreciation. Hon. Members spoke of the coal industry as the key to this problem, and I am sure that is true. The figures given by my right hon. Friend the Minister of Labour proved conclusively that the black areas, the really difficult spots, were those areas in the mining counties from which employment has ebbed away. There is great difficulty in establishing new industries there. Those areas remain the obstinate hard core of the problem and every effort must be made to deal with them. The suggestion about oil from coal is an important one. It will not solve the whole of the problem. To some extent the solution which has been proposed in rather blunt form by Sir George Gibb in the Durham report is a solution which is being adopted in other parts of the country. My Scottish colleagues will know of the interesting experiment which is being made in Stirlingshire where the village of Standburn is being completely evacuated and the population moved to the village of West Quarter. I wish hon. Members could see the photographs of that development, and if they wish I shall have them put up in the Tea Room. I think they will convince everyone of the desirability of such transferences where they can be carried out. I am sure it is greatly to the advantage of the health and morale of a population to be taken out of some of these areas and moved to other areas where they can enjoy good air and reasonable amenities in new surroundings.

Mr. Grenfell

Within the same county?

Mr. Elliot

The criticism against the proposal was a criticism against moving people at all, and there was some bitter and unjust criticism of what was called "knocking the villages down behind the people," which seems to me a misstatement of an idea which at bottom was sound, and which I am willing to illustrate with photographs of a development in my own country and which hon. Members opposite have repeatedly begged me to push further still. The hon. Member was not in in the more febrile portion of the Debate, and his speech reflected a little the rosy-tongued nature of the advance copy which he was good enough to send us of the "Programme of immediate action." He was able to give the whole of the proposals in the form of a speech, but I am sure that no Member of the Opposition would suggest that they would form any reasonable set of Amendments to this Resolution. Nobody would suggest that they did not form an increased charge.

Further, the second part of the hon. Gentleman's speech was entirely destructive of the first. He began by explaining to us that the powers should be wider and bolder, that greater sums of money should be given to some gentleman who would have power to spend them, but in the concluding paragraphs he smote us hip and thigh because we had not tied up more tightly the proposals we were making. I wonder what the Financial Resolution would have been like if he had had the drawing of it. If this one is a tight coat his would have been a strait jacket. He said it was a coincidence, which seemed to have a certain sinister meaning in his mind, that a certain factory had been established in the constituency of a Conservative Member. I wonder if his suspicions would have been removed if it had been the constituency of a Conservative Minister. I wonder if anything we could do would remove his suspicion. One reads in the Proverbs in Holy Writ how if you brayed men with a mortar and pestle their leading characteristics would not depart from them. There are characteristics in the mind of the hon. Gentleman which a similar drastic process would not remove. He cannot have it both ways. He cannot have greater latitude in the spending of public money and then condemn us for not tying tightly enough the reliefs we propose to give.

Mr. Dalton

I asked whether the right hon. Member could give us the approximate amount of employment likely to be afforded by the group of new factories which the Minister of Labour mentioned at the end of his speech.

Mr. Elliot

I am obliged to the hon. Member for reminding me of that. The figure of 3,000 at present would be employed in that group. That is a beginning, and we may look for further developments. My right hon. Friend the Member for Aldershot (Viscount Wolmer) read a list of the recommendations of the Special Commissioner. I think I can say they have practically all been dealt with in one way or another. There are one or two we could not possibly accept at present. One of them is exactly the recommendation, to which he drew attention, as to whether we should make com- pulsory instead of voluntary the attendance at instructional centres on the part of unemployed men. I think that that would be a step which hon. Members in all parts of the House would look upon with uneasiness. The essence of instruction is an element of agreement between the teacher and the taught, and there would be a danger, especially just now, in imparting a type of compulsion into these instructional centres. If my right hon. Friend will allow me, I will give him a complete list of the recommendations, because I have them here, and it is merely for want of time that I do not quote them now.

My right hon. Friend referred to the case of Sir George Gillett and asked whether he was on a full-time basis. He is giving all the time necessary for the full purpose of his duty, and he is attending to it with the greatest assiduity. He has paid half a dozen visits or more to the Special Areas, and the Government and the Special Areas are fortunate in having a Commissioner with such wide experience who is so generously giving his services in this particular work. It is a little difficult to say what a part-time basis means. It generally means that you take a very busy man who is earning a large income in his own occupation and put a voluntary burden on his back which takes him entirely away from his own occupation. I do not know whether we should get more if we put that in statutory form, and paid him a handsome salary for the exchange. In fact, I think we get practically whole-time service from this Commissioner as we got from the others.

I do not wish to complain because the Debate is so wide that no single speech could possibly cover all the points which have been raised. I would like to say a word in conclusion on a matter which was mentioned by the hon. Member for Bishop Auckland and some other hon. Members, namely, the question of a special Minister. I do not know that the solution of a special Minister is so attractive as it seems to hon. Members opposite. I am in a way a general Minister for the Co-ordination of Affairs in Scotland. I have never found that that gets rid of all the facts or the difficulties. The difficulties are just as acute whether I have to deal with the Department of Agriculture or with the Department of Education, or whether I am meeting the Minister of Agriculture or the Minister of Education. The facts are my trouble. I heard a most interesting speech from an hon. Member for one of the Lancashire divisions pressing me to take a firm hand with trade agreements—a firm hand, he said, for the cotton industry in trade agreements. How often have I heard that same demand made when I was Minister of Agriculture the other way round. How often is the demand made now that a firm hand should be taken against Chinese liquid eggs. It comes from the same Member who afterwards demands that we shall have an agreement by which we may sell a larger quantity of cotton cloth in the Chinese market.

It is facts which are the problem, and all the co-ordination in the world will not enable us to get rid of the facts. We have to stand upon our general programme, the general programme which, as the White Paper indicates, has brought about a considerable reduction in the number of the unemployed in the Special Areas. I believe that that reduction will continue. I believe it will be possible for us to solve a great proportion of the problem of the Special Areas by the Government's method which we are now adopting, but not all. Bold and unconventional methods will have still to be employed, and we shall not shrink from employing them as we have not shrunk from employing them in the past in this respect.

Motion made, and Question, That the Chairman do report Progress, and ask leave to sit again "—[Captain Margesson.] put, and agreed to.

Committee report Progress; to sit again upon Friday.