Commons Sitting of 19 March 1937

Preamble
The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
General Cemetery Bill,
Read the Third time, and passed.
Grimsby Corporation (Grimsby and District Water, etc.) Bill.
As amended, considered; to be read the Third time.
Southampton Corporation Bill.
As amended, to be considered upon Monday next.

ROAD ACCIDENTS INVOLVING PERSONAL INJURY.
Address for,
"Return showing the number of accidents resulting in death or personal injury in which vehicles and horses were concerned and known by the police to have occurred in streets, roads, or public places, together with the number of persons killed or injured by such accidents in Great Britain during the year ended the 31st day of December, 1936 (in continuation of Parliamentary Paper, No. 73, of Session 1935–36)."—[Ah. Lloyd.]

CARDIFF EXTENSION BILL.
Reported, with Amendments, from the Committee on Group F of Private Bills (with Report on the Bill).
Bill, as amended, and Report to lie upon the Table; Report to be printed.

ORDERS OF THE DAY.

  SPECIAL AREAS [MONEY].
  Resolution reported,
  "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—

  (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;

  (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 purposea of gain;

  (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;
  (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;
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  (e) the payment of moneys provided by Parliament of any sums required for the purposes aforesaid; and
  (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."
  Resolution read a Second time.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  11.7 a.m.
  Mr. John: I rise to oppose the Resolution. We have had many discussions on it, but evidently the speeches on this side have made no impression on the Government; at least, there have been no changes in the proposals which they brought before the House. We do not oppose this Resolution for what it contains, but because it is such a puny effort on the part of the Government to deal with the problem of the Special Areas. The proposals are totally inadequate, and they lack a comprehensive and constructive policy to deal with the great problem of the Special Areas, one of the greatest problems which the House and the country have had to face for a number of years. Unless better proposals than those contained in the White Paper are put forward, we shall have to face this problem for many years to come. The White Paper is practically a recital of what the Government have done under existing powers. Indeed, it is a futile attempt of the Government to magnify what has been done in the Special Areas since the Special Areas Act was introduced in December, 1934.
  The local authorities in those areas have no cause to be jubilant over the Financial Resolution. Their expectations have not been realised. The Commissioner for England and Wales made a recommendation that the Special Areas must be relieved of all excessive burdens, but nothing is proposed in the Resolution to carry it out. There is a number of excessive burdens that the local authorities

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  in the Special Areas have to bear. A number of the areas in south Wales which are the hardest hit had, during War-time, to borrow in order to construct works. There was the Taf Fechan Water Board, for instance. For the next 50 years or so the local authorities will have to bear an annual rate liability of from 6s. to 7s. in the £. This Board was formed and Parliamentary sanction was given in order to carry on the water and sewerage schemes in anticipation at that time of an expansion of trade and an increase of population. As a result of the depression trade did not expand, and the mining industry was hit very severely, while, as the result of transference, a great deal of the population has left this area. The position in those areas now is that the local authorities have to bear a burden which means a rate of 6s. to 7s. in the £ Nothing is mentioned in the White Paper about easing that excessive burden.
  Then there is the question of the Goschen loans, which has been frequently discussed in this House. Those loans were contracted by the old boards of guardians prior to 1929, and were transferred from the old boards to the county councils. A number of the local authorities had paid their loan before the transfer, but some of them are having to pay twice. What is the effect of the Goschen loans upon the county authorities in the depressed areas? The figures have been given before, but they are so impressive that they need to be repeated in order to show the Government the need for easing the local authorities of this burden. The Monmouth County Council has an annual liability under the Goschen loans of £40,525, which is equal to a rate liability of 10.36d. Glamorgan County Council has a liability of £38,313, or a rate liability of 3.45d. Merthyr has a liability of £7,324, or a rate liability of 8.2d. Sheffield has a liability of £60,809, or a rate liability of 5.05d. The total debt outstanding is in the region of £2,000,000 on the Goschen loans, and the annual payments amount to £340,844.
  That is a tremendous burden for those local authorities to carry. Taking the Goschen loan, and the cost of water and sewerage scheme which had to be carried out at a time when costs were high, during the War period, there is a burden on the local authorities amounting to about 7s. 6d. in the £. In the
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  absence of an agreement among local authorities in the country to share this burden, the Government have left the Special Areas to carry it themselves, utterly regardless of the recommendation of the Commissioner that relief should be given to the Special Areas. In paragraph 14 of the White Paper it is stated:
  "In his Third Report the Commissioner for England and Wales proposed that 'the excess burden of public assistance on local authorities in the Special Areas should be reduced by some such means as the equalising of the public assistance rate throughout the country.' When this recommendation was made the Commissioner was of course not aware of the relief which would be afforded to rates in the Special Areas by the Local Government (Financial Provisions) Bills now before Parliament."
  It is clear from that paragraph that the Government do not intend to do anything to ease the burdens of the local authorities beyond what has already been done through the block grant. That the Government have given a certain amount of benefit to the local authorities under the block grant no one will deny. The county of Glamorgan, which has a rate of 20s. 11d. in the £, gets a benefit equal to 24.5d. in the £. Durham, which has a rate of 18s. in the £ has had an easement of Is. 8.8d. Blackpool, with a rate of 7s. 6d. in the £, has benefited to the extent of 3.1d. I contend that if the Special Areas had been taken into consideration separately and dealt with upon their merits the Government would have granted them a greater measure of benefit than is represented by a relief of 2s. to an area which has a rate of over 20S. in the £. To say that the Commissioner did not know that the Government were increasing the amount of the block grant is a futile excuse, because under the block grant revision the Government are only fulfilling their obligations under the Act of 1929.
  Take the relief of 2s. in the pound in the case of Glamorganshire. The county will not receive the full advantage of that benefit. The argument in the White Paper is that these benefits are being given in order to provide an opportunity for the local authorities to expand and improve their health services. The effect of the changes in the rating of railways reduces the benefit of the 2s., and Bills which we have been passing through this House lately have placed further obligations on the local authorities, for

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  instance, the Midwives Act will increase their financial responsibilities. Further, the cost of materials and of food for hospitals and other institutions is rising. Therefore, the actual benefit from the new money in the block grants will really be very small. The local authorities have no cause to be jubilant over the magnitude of the benefits they have received. Seven or eight pages of the White Paper are occupied with showing what the Government have done under existing methods, and it also refers to their proposals for the future, mainly with the object of providing work for the unemployed in those areas.
  I should like to direct the attention of the House to one particular phase of this matter which has been neglected right along the line. In paragraph 21 it is stated that they are to give a grant for field drainage, but the grant is to be a very small one. Why do not the Government deal with the drainage problem on comprehensive lines? We know how the country has suffered from floods in the last few days, and a large portion of the country is constantly like a lake. Why do not the Government introduce a comprehensive scheme of land drainage to bring back into cultivation large portions of land? The Commissioners in their reports have emphasised the need for the Government to put men in the industrial areas back into work, and the desirability of reclaiming land which has been lost by coastal erosion and by neglect of proper drainage is not only recognised by Members of this House but also by the Commissioners.
  The other day there was a survey of the position in Wales. Professor Staple-don, of Aberystwyth, in his survey of agricultural and waste lands in Wales, shows that there are vast barren areas there which could be made fertile, that there are thousands of acres in the hills which could be converted into pasture or clothed with forests. That is a survey by a man whom everybody recognises as an authority, but the fact that the Government are to make a grant only for field drainage shows clearly that they have no intention of dealing with the problem of drainage in general.
  In the industrial areas, the Government are waiting for the old people to die and are transferring the young people. There
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  are plenty of poor lands and waste areas which ought to be brought back into cultivation. The White Paper showed that experiments had been and are being made with regard to land settlement, but what a slow process it is. In the last two, years only 16 people have been settled on the land in South Wales. The White Paper gives the figure of 2,000 for England and Wales, but every year more than 1, 000 people leave the land, so that putting 2,000 on the land really comes down to the fact that only 1000 people have been put on the land through land settlement schemes. It shows very little more than the folly of the present policy of the Government in dealing with this problem.
  Everybody admits that agricultural land is going out of cultivation. Between 1924 and 1932, in England and Wales, 700,000 acres went out of cultivation and the number of farm workers was reduced from 928,925 to 809,100. That is a reduction of about 12 per cent. It was stated, in reply to a recent question by the hon. Member for Pontypool (Mr. A. Jenkins), that the number of farm workers was reduced from 741,696 in June, 1930, to 640,576 in June, 1936. The White Paper shows that a number of people have been placed upon small agricultural holdings.—

ROYAL ASSENT.
Message to attend the Lords Commissioners.
The House went; and, having returned, Mr. SPEAKER reported the Royal Assent to:

1. Defence Loans Act, 1937.

2. East India Loans Act, 1937.

3. Geneva Convention Act, 1937.

4. Regency Act, 1937.

5. Reserve Forces Act, 1937.

6. Empire Settlement Act, 1937.

7. Merchant Shipping (Spanish Frontiers Observation) Act, 1937.

8. Greenock Burgh Extension, amp;c., Order Confirmation Act, 1937.

9. Ministry of Health Provisional Order Confirmation (Evesham and Per-shore Joint Hospital District) Act, 1937.

10. Ministry of Health Provisional Order Confirmation (Port of Manchester) Act, 1937.

SPECIAL AREAS [MONEY].
Question again proposed, "That this House doth agree with the Committee in the said Resolution."
11.38 a.m.
Mr. John: I was going to deal with the number of persons on agricultural holdings. The number of persons placed by the action of the Commissioners and of the Government on part-time holdings is 2,500, but the number of people leaving smallholdings is more than equal to the number placed on small or part-time holdings. The number has fallen by five per cent. between 1924 and 1932. The number of people employed in agriculture generally has fallen. The proportion of the population employed in agriculture in this country is only seven per cent. In France it is 42 per cent., in Denmark 35 per cent., in Holland 24 per cent., in Belgium 19 per cent. and in the United States of America 26 per cent. Since 1871 the number of agricultural workers in this country has been reduced by more than half. Those figures clearly indicate that the time has arrived for the Government to take a comprehensive view of the whole question of the relationship of agriculture to the Special Areas.
Money is spent in public assistance, but no land has been reclaimed, no buildings have been erected and no drainage work has been done. Surely the Government ought to explore the possibility of giving people work of a constructive character. The Government are going on with their Defence programme. Surely it should be part of a general scheme of Defence to provide food for the people? I suggest there should be draining and reclaiming of land, and that while that is being done the Government should be responsible for the payment of the trade union rate of wages to these people. The Commissioners, everyone of them, in England, in Scotland and in Wales, have conducted surveys of the situation and recently a survey was conducted by Professor Marquand and others. They put in 14 months hard and diligent work and their report provides a scathing comment on the efforts of the Government to deal with the problem of the Special Areas, the absence of plans for the revival of the distressed areas and the refusal to control the problem of the location of industry.
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The three volumes of this report contain an enormous accumulation of facts which the Minister of Labour would do well to read and digest. Those facts show the serious problem constituted by surplus labour in South Wales, and what applies to South Wales applies equally to England and Scotland. This problem can be solved only by one of two methods—either by wholesale migration, which is both impracticable and undesirable, or by the introduction of new industries into the Special Areas. This survey gives very illuminating figures with regard to the surplus population and surplus labour in South Wales. It shows a loss of population, between 1921 and 1931, of 240,000, and it is estimated that between 1931 and 1935 there was a further loss of 72,000, and that by 1945 there will be a further loss of 250,000. That represents a loss, in two counties alone, of over half a million people. Do the Government believe that this migration policy can continue? Is it not time that they realised that some other ways and means will have to be adopted to solve the problem of the distressed areas than transference or migration?
The report of this survey states that if 80,000 people were taken from South Wales tomorrow there would still be sufficient labour for the needs of all the industries and a surplus of 12 per cent. unemployed. Surely that is a very serious and distressing feature of the problem of the Special Areas. The Government have brought to these areas a small number of new industries, but all of them with one exception are connected with the defence programme, and were it not for the possibility of war, were it not for the fact that the Government need to carry out a defence programme, there would be no works at all in the Special Areas. We cannot go on continually making munitions; a time must come when the making of munitions must stop, and then the distressed areas will be more distressed than they are at present. The workers of the distressed areas want work of a constructive and elevating character; they want work that will develop their manhood, work in a peaceful avocation, and it is time that the Government directed their attention to the provision of work.
Take the effect of migration upon the local authorities. It is the young who are taken away; those who are left behind

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are the old and the young children, that is to say, the dependent section of the community. The normally employed group are being taken away, and the local authorities have to bear the burdens that are left. The communities, are made so much the poorer, and what is the tragedy of the lives of those tens of thousands of people who have reached the age of 45, 50 or 55? They are not even good enough for transfer, and all that they have to look forward to is being put on the means test, with its soul-racking terms, until they are 65, when they come on to the old age pension of 10s. with a little assistance from the Public Assistance Committee. These men are really worthy of and entitled to better treatment by the Government —better treatment in the form of the provision of work.
Is it not possible for the Government to take charge of the whole question of the location of industry? A Royal Commission on the question of the location of industry means transferring it. The Government are so used to transferring people that they are now going to transfer their responsibilities and obligations; it is only a subterfuge for delaying the whole question. Have there not been sufficient surveys on this question? Has not every Commissioner reported with regard to the need for the location of industry? Have not universities in England and in Wales conducted surveys on the general situation? And not only is there sufficient information at the disposal of the Government at the present time, but their own experience tells them that control of the location of industry by the Government is imperative. Appeals by the Prime Minister, appeals by the Commissioners, appeals by Cabinet Ministers—all these appeals have failed. The experience of the past shows the possibilities of the future, and the puny inducements in the White Paper will not succeed in bringing new industries into the depressed areas.
I know South Wales, and probably the same facilities that there are in South Wales exist in England and in Scotland. There is sufficient water power available for any purpose; there is cheap fuel, there is cheap electricity, there are transport facilities, and there is plenty of labour—the best in the land. Everything that is essential for the development of industry is available in those distressed areas; all
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that is required is organisation and planning on the part of the Government. The Government ought to take charge of the whole question. Instead of waiting for a Royal commission, they ought to make up their minds that industries have got to go into the Special Areas. It is all very well for the Minister to say that new industries must be limited. That is quite true. But, if new industries are to go anywhere, they ought to go into the Special Areas. Under schemes of transference men are compelled to leave their homes, to leave their associations, in order to get work elsewhere, and if it is right to compel men to leave the areas in which they have been born and bred, surely it is not wrong to compel the industrialists of this country to take the industries to the places where the people live, instead of moving the men to the industries.
The Minister may reply that a low temperature carbonisation plant is to be erected in South Wales That is all very well as far as it goes, but what is one? The Government could spend £50,000, 000, £60,000,000, £80,000,000 in organising plants for low temperature carbonisation and hydrogenation all over the country. This is as much a question of defence as is the building of ships and the preparation of the Army and the Air Force. I want the Minister to realise the possibility of developing a large number of new industries, of developing processes for the scientific treatment of coal, because in that way a great deal of employment could be provided for the men in those areas at the present time. But all that the Government can do will not be sufficient to absorb the whole of the unemployed in those areas, and, therefore, the Government will have to direct their attention to another recommendation of the Commissioner, namely, the increase of the age for children's maintenance allowance, the reduction of the pensionable age and the increase of pensions. In that way they will be able to provide for those people who cannot be re-absorbed into industry. Let the Government decide that they are going to tackle this problem in a practical and scientific way.
11.55 a.m.
Sir Robert Aske: The hon. Member has candidly admitted that his objection to the Resolution is rather as regards the things that are left out than the matters

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that are put in, and that has been the general tone of the criticism of the Resolution from beginning to end. I think, therefore, that the Minister may fairly congratulate himself that the Measure that is being put forward meets with the general approval. I think the hon. Gentleman, by the suggestions that he has made himself, has conceded that there can be no one Measure to solve our difficulties in the Special Areas: It must be a multiplicity of Measures, and it is perhaps a little ungracious that, when the Government comes forward with some Measure that is approved, they should condemn it merely because this one set of proposals does not cover the whole ground. The fact of the matter is that the problems of all the Special Areas, and of the parts of each area, are not the same. There may be, and no doubt are, common elements, and the principal factor is the fact that the industry in each part is too specialised and, when that particular industry falls on bad times, depression and gloom falls over the whole area. But in many parts of these areas, one gets periods of intense activity, interspersed with periods of great depression. That is particularly the case in parts where the heavy industries are located, and particularly where those industries largely revolve around munitions, in which I include naval shipbuilding.
It is those elements which this Bill will substantially benefit. One finds that in periods of activity in these parts the labour supply may be swollen by men coming in from other areas. In times of depression the reverse process takes place and one gets, in addition, rationalisation and mechanisation, which again always tend in those periods of depression to make the difficulties all the greater. That is intensified by the introduction of new processes, such as electric welding in shipbuilding, which again displaces men. Then one finds that in periods of depression the reverse process takes place and men begin to leave the areas, either voluntarily or under pressure from the Departments. One gets a good picture of what is happening on Tyneside at present if one takes our staple industry, shipbuilding and ship repairing. During the last six years the number of men employed and unemployed engaged in that industry has fallen by over a third and, notwithstanding that serious fall, more than one man in three is unemployed at present. That gives exactly
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the tragic character of this picture and also illustrates its difficulty. If one takes, in the same area, marine engineering, one finds, over the same period, that the number engaged has fallen by about 25 per cent., and there are still 14 per cent. unemployed. If you go further into particulars at this stage when there is supposed to be intense industrial development in that area, you find that, although in the main the skilled man will no doubt get into employment, it is the unskilled man who is the real problem with which the Government must deal.
There is no doubt that that is the most difficult part of the problem, owing very largely to the reasons that I have indicated. You have to-day the City of Newcastle with 20,000 unemployed in a period of what is supposed to be comparative prosperity. That is the problem that is before the Government. The hon. Gentleman referred to the question of transference. On principle we oppose it in all cases except where the area is absolutely derelict, although one has to recognise that in periods of depression it helps the men if they can get work in other areas. He also referred to the necessity for financial assistance to local authorities in one shape or another, or to quasi public bodies, for the development of our Special Areas. Every one in the Special Areas will agree with that, and we all join in his pressure on the Government to intensify financial assistance. We must have money in order that our areas may become prosperous. That is the one great essential. Outside those particular methods there remain only two broad avenues along which Government assistance can be given. The first is assistance to existing industries. That falls into two categories, either Government orders given direct to industries in the areas or indirect help by means of the general policy of the Government, of which we have had illustrations, for instance, in the iron and steel trades through the medium of tariffs, and the coal trade through trade agreements. But there are many other methods which will involve Government assistance in exploration and experiment in order to find new uses for the basic trades that we have in these areas, the principal of which, of course, is coal.
Outside those there is left only the question of the introduction of new

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industries into the area. That again falls into two categories, first of all the Government Departments themselves setting up new industries of one sort or another connected with the Defence Services or with the civilian Departments and, secondly, a stimulus by the Government to private firms and companies to start industries there. It is only that last part with which this Measure proposes to deal. If one gets the matter in that perspective and recognises that a definite effort is being made to foster industry in this way, I regard that as a definite and substantial step forward, the more so as I regard this Measure as recognising two important principles, first of all that the Government realise that the basis of industry in our Special Areas must be broadened and that industry must become less specialised and, secondly, that there is involved in this Measure a recognition by the Government of national responsibility with regard to the location of industry.
We have to realise that the efficacy of all measures of this kind and kindred measures depends to a very large extent on administration. If the Commissioner and the Departments choose to take a liberal and generous view of their responibilities and the possibilities of what may be done under the provisions of this Resolution, I think that a good deal may be done, but if, on the other hand, they are too niggardly in the manner in which they deal with the question of loans to industries or with regard to the contributions which are made to rents, rates and income tax, the result will be a failure. I would particularly press upon my right hon. Friend the Minister the necessity for making the terms of repayment of loans as generous as possible. The reason why the Special Areas Reconstruction scheme has not been a success is very largely due to that one factor—the problem of repayment. If people require Government assistance in order to start new industries, it is obvious that they cannot begin repaying at once. We must give them a reasonable time in order to get their industries going and to make their connections and begin to make sufficient profit, in order to repay the loan. If you put capital into a new industry, you cannot at once begin taking it out, otherwise you cripple it from the start. I know, from my own knowledge of cases
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in the North-Eastern area, that that has been one of the main causes why much greater advantage has not been taken of the existing Act, and I would press that matter upon the consideration of my right hon. Friend in the working of this new Scheme.
My hon. Friend opposite referred to the question of more being necessary than mere inducements. You can get new industries into these areas only in two ways, either by inducements offered by the Government or by compulsion exerted by the Government. These proposals involve only inducements, but one has to recognise that a good deal has been done by inducements alone. I find from the Board of Trade Survey of 1935 that over 200 new factories were set up in that years in the area of greater London alone, and only two new factories in the whole of the special areas put together. But, as against that, one finds that, under the trading estates scheme, on the Team Valley Estate already there are 20 new factories which have been taken up. That shows that there are 10 times as many already taken up under that one scheme than was done in 1935 among all the Special Areas put together. A considerable amount can be done by these methods of inducement, and, of course, the inducements which are being offered under this Resolution are far more than were offered under the existing Act.
Therefore, personally, I look forward to a good deal more being accomplished under this scheme. At the same time, we have to recognise the fact that it may be that the cream has already been taken off as far as new industries are concerned, there having been such an enormous number set up throughout the country as is shown in the Commissioners' Third Report. Nevertheless, with regard to the future, now is the time when the planning ought to be done, and I quite agree with what my hon. Friend said about that. It is in times of great activity that we have to be looking forward to the time when that activity will diminish. I doubt whether it will be possible to accomplish all that is needed by inducements alone. I think that something will have to be done in the shape both of inducement and of compulsion, or, at all events, prevention of industries setting up in particular areas. That was the view taken in the Wallace Report, it is the view taken by

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the Commissioner of Special Areas, and it is also the view expressed in the Report of the North Eastern Development Board.
That is a problem, therefore, which has to be recognised as a serious one, and I join in the views which have been expressed, that as little time as is absolutely necessary will be allowed to elapse before, at all events, some definite determination is made. When one regards these proposals in their true perspective, so far as they touch this matter of inducing new industries to come into the Special Areas, they will prove to be a valuable contribution. If only the requisite consideration is exercised by the Commissioner and the Departments combined, I hope we shall find a good deal of relief, which will become more and more valuable as the time of present activity declines and we reach a more quiescent state of industry.
12.13 p.m.
Mr. Leslie: With most of what the hon. Member for East Newcastle-upon-Tyne (Sir R. Aske) has said, we can all heartily agree. He stated the case absolutely correctly as regards the Areas that hitherto depended upon special industries. It is true that great depression has been experienced in those industries, but here is the case of new industries which we have been pressing upon the Government for a considerable time. The hon. Member also mentioned the effect of new processes in diminishing the number of workers. Here is a case for shorter hours of labour. Scientific processes, as we know, have been used as wage saving devices, instead of being used as labour-saving devices in the real sense by a reduction of the working hours. I am glad that this Bill enables the Treasury to give financial assistance for any area outside the Special Areas.
A few weeks ago we had a debate on distress in the Highlands and Islands. Something certainly should be done to arrest the constant depopulation that is going on there, and to appease the land hunger that exists in the Highlands and Islands, where of the 3,500,000 acres of deer forests, over 2,000,000 acres were formerly cultivated land. In association with smallholdings, there should be timber growing, and in association with that, pulp factories for the manufacture of domestic utensils in order to employ
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the workpeople in the dead season when it is impossible to cultivate the land. I know that some people deem land settlement in the Highlands as purely sentiment, but sentiment certainly proves very strong.
They say it is far better for young people to emigrate. The exile may be abroad for many years. He may have sailed the Seven Seas; but he always likes to look forward to home. That is the reason why he wants the old people to remain in the Highlands and Islands. We know that the Highlands and Islands were almost denuded of able-bodied men during the Great War. Those men who risked their lives in the War returned in the hope of acquiring holdings. Many of them, tired of waiting, squatted down. What was the result? They were haled to gaol and imprisoned, and the Government of that day, which happened to be a Labour Government, came to the rescue and gave them smallholdings.
Take the fishing industry. That industry has been in a parlous state for a considerable time. Here is where the Government can certainly help. Harbour improvements are very necessary. What is the result of all this rural depopulation? To many it means physical and mental and moral deterioration. I hope, therefore, that the Government will do something to assist the distress in the Highlands and Islands.
Now I want to jump from the Highlands down to the area that I happen to represent. The county of Durham might be rightly classified as a Special Area. Billingham and Stockton were excluded from the Special Areas Act of 1934. Under the system of block grants Billing-ham stood to lose heavily. The I.C.I. works have often been quoted as a reason why no relief should be given to Billing-ham. But Billingham had to provide housing, roads, sewers, a fire station and a fire brigade. The shopkeepers and householders have had to pay, because industrial concerns get off with a reduction of 75 per cent. of their rates. The county of Durham under derating loses no less than £1,139,938. Under the block grant it is to receive £235,000. That is not a very generous contribution to the losses sustained.
We have had a report on South West Durham by a supposed expert. That report has certainly aroused strong feel-

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ings in the whole county. It does not put forward any comprehensive cures for the distressed areas, but it suggests the wiping out of entire villages. There are certain recommendations in the Report to which I hope the Government will give serious consideration. There is the clearance of whole dumps of refuse which are an eyesore and ought to be got rid of. Then there is the establishment of certain factories such as brick and tile making. What are essential factors in the establishment of factories? First of all the factories must be conveniently situated in relation to the market. The population of the north of England supplies a ready home market, and for the export trade seaport facilities are certainly available.
It may be thought that I am constantly trotting out King Charles's head by referring to the location of industries and what might be done with foreign firms which try to get behind the tariff wall. The President of the Board of Trade stated the other day, in answer to a question, that 219 foreign firms had established factories and workshops in this country. Surely it is within the power of the Government to say to these foreign firms where their factories and workshops shall be placed, inasmuch as they have to get a permit before they can come into this country. It is quite true that they must employ British labour. Surely the Government can say to these foreign firms "Here are Special Areas. There are transport facilities available, and that is where you must have your factories and workshops."
Another factor in connection with the establishment of factories is the constant complaint that industrial concerns shun areas where rates are high. It is decidedly unfair that distressed areas should be saddled with the burden of unemployment, because after all unemployment is a national question and ought to be dealt with nationally. Take the case of Durham. The public assistance rate is approximately 9s. in the £, as against an average of 3s. In Blackpool I believe it is only 7½d. Then there is the question of sites for factories. They should be near suitable transport facilities. Durham offers all the transport facilities that are required both by road, rail and sea. There is the question of an adequate supply of workers in the necessary trades.
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Here the Government could assist with training centres in the distressed areas. Surely, if new industries are to come here it is advisable to have training centres in these areas so that the trainees can be available in the event of new industries coming. Instead of the Government sending young people away from home influence, away to the south of England or the Midlands, we say that the training centres ought to be in the distressed areas. Again, the workers must be domiciled within a reasonable distance of the new factory. In most of the distressed areas this could be arranged; all that is wanted is the factories.
I want to mention two particular derelict villages in my division. Stilling-ton I have mentioned pretty often. The population has decreased until now there are only 1,200 souls there, mostly old people. That was once a prosperous village; there were ironworks and blast furnaces there. There is a railway siding on the spot, and there is an excellent site for a new industry. Take Middleton St. George. Four hundred people are registered as unemployed there. Once there were blast furnaces at the place. There again there are a good siding and a good site available. I hope that the Minister will take note and see whether he can do anything to help in this way. In Durham we suffer considerably from flooded mines. One mine has reopened recently in the Sedgefield Division, but we can work only the top seam, and there is a huge area of coal lying waste. Surely in the interests of that community and of the nation as a whole the Government ought to intervene, and if the coalowners cannot apply proper drainage, the Government should do it. Whether or not the coalowners will pay at the end is not my concern. We know that the countryside has been flooded this winter to the greatest extent in living memory. The catchment boards are not enough. Here is certainly work that the unemployed can do.
Let me touch for a moment on the question of what can be produced from coal. We know that coal is a wonderful product. It is astonishing what can be made of it. The other day I saw some beautiful opera glasses made entirely from coal. Anyone who visits the Greenwich research works the largest in the world, will see how the scientists and

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chemists are working with enthusiasm. The Secretary for Mines has never been able to tell us the result of the Billing-ham experiment. I am informed that at Erith the company are distilling Diesel oil and motor spirit and consuming 300 tons of coal a day, all of which comes from Durham. The company, I understand, intend to establish further plant. If they have to bring the coal from Durham, they might as well have the plant in Durham. Might I ask the Minister to use his influence in that direction?
We are to spend an enormous sum in having an Air Force second to none, and a Navy the greatest in the world. Both those Services will certainly depend on oil. Where is the oil to come from in time of war? Last year we imported 1,273,000,000 gallons of refined motor spirit, the bulk of which came from the Dutch West Indies, 512,000,000 gallons of crude petroleum and 118,000,000 gallons of lubricating oil. These facts ought to be sufficient to make the Government look into the question of developing our oil supplies at home. I hope that the Minister will pay attention to what I have said, and do his best to help us in these matters.
12.27 p.m.
Mr. Furness: In approaching the problem of the Special Areas, we all approach it from the angle of our own particular locality. The hon. Member who opened the Debate spoke principally about South Wales, although many of his remarks were applicable to the general problem. My hon. and learned Friend the Member for Newcastle East (Sir R. Aske) dealt, if I may say so with respect, very admirably with the problem which concerns us in the shipbuilding towns of the North-East coast. It is, therefore, not necessary for me to cover very much of the ground about which I had prepared myself to speak. We all recognise now, and I think everybody in the country recognises, that the problem of the Special Areas is not due to any demerits or lack of enterprise or industry on the part of the people who live in those areas. At one time there was an idea, perhaps, in the South of England, that we in the North and those in South Wales had by some action of our own brought these misfortunes upon ourselves. It is now recognised that our troubles proceed from our being dependent so
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largely upon three great industries—coal mining, shipbuilding and the iron and steel trade. As the hon. and learned Member for Newcastle East said, those industries are always subject to the process of ebb and flow.
I should like to point out that the policy of disarmament which we followed until quite recently—I am not discussing whether or not it was right to adopt that policy—hit us on the North-East coast very hardly, because so many of our industries had been adapted before the war for the process of armament making and were expanded in that direction during the war, and when the process of Disarmament came we were given no assistance from the Government to enable us to beat our swords into ploughshares. Everybody wishes that we may one day adopt the reverse process and be engaged in disarmament again, but if that day does come we shall expect that the cost of making the adjustment will be reimbursed to us and that our people will not be left to go through the miseries of the process of getting back to peace-time working which they have experienced in the last few years.
Our dependence in the Special Areas upon few trades has had an effect upon us in three ways. There is, first, the town which has lost the one industry that it had. The most outstanding example of that is the town of Jarrow. Jarrow was Palmer's and Palmer's was Jarrow, and once you took away that yard and that wonderful enterprise the whole town was left derelict. There are, I understand, examples of that sort in South Wales. I have not sympathised with every method which has been put forward for dealing with that problem, but it should not be beyond our wit and industry to find some way in which a town such as Jarrow shall have once again an industry in its midst. The second form which the depression takes is that of a mining area in which the people live in small communities concentrated round some particular coal mine. We have that situation in South West Durham. There the pits are perhaps worked out or are unable any longer to compete economically with the newer and more profitable pits which we have on the East side of the county, down to the sea coast.
There we have a very difficult problem to face. We have great difficulty in giving back once more to these people any

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real form of industry because the communities are too small. The hon. Member for Sedgefield (Mr. Leslie) mentioned two villages which I know well, Stillington and Middleton St. George, which were concentrated around small ironworks. Those works are gone out of production and it is impossible to imagine that they will ever again be able to start up and compete with those large aggregated economical units which we have in Middlesbrough and West Hartlepool. We have in many cases—I do not say in the case of these two places, which are fairly large—either to get the people back into agriculture, or to transfer them.
The hon. Member who opened the discussion dealt very largely with agriculture, and I will say nothing about it, but in regard to the question of transference I associate myself with what the hon. and learned Member for Newcastle, East, said, that we in the Special Areas feel rather keenly about this question. If I may use a metaphor which is not intended to be offensive, it is like skimming the cream off the milk to take away young boys, who are most easily placed in industry, and leave behind the older men, who cannot move and adapt themselves. In regard to the question of transference I should like to mention one matter, not as a subject of complaint, because the Minister has dealt with it most courteously and sympathetically. I had the experience of leaving home to go to school at a quite young age. When we find, as we often do, that parents are a little reluctant to allow their children to go away from home to work in London, we sometimes may feel inclined not to view it sympathetically, but it is a very different thing going away from home when your parents know that if you are ill you will be well looked after, and especially when your parents are in such a financial position that they can come to see you.
It was very touching when the hon. Member for Llanelly (Mr. J. Griffiths) spoke of the Welsh Members of Parliament having every Monday morning to bring young people up to London. Recently, I had a case brought to my notice by a constituent, who said that his boy had come to London to work, that he had got out of work here and because he had failed to observe the regulations and to report to the Ministry that he had left his job, his benefit had been stopped. The
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father wrote to me in desperation to ask whether I would look up the boy and see that he did not get into trouble. The father was out of work and was unable to find the money to enable him to come up and see his boy. We must appreciate that human side and what it means to parents who are out of work to feel that their young children are away in London exposed to all the difficulties and temptations of a great town, and that they are unable in case of emergency to see them.
The third example is typified by the constituency I represent. It is a town which is enterprising: it is still busy, and is still in many respects prosperous. We have had a remarkable revival in shipbuilding in Sunderland, but we still have over 17,000 out of work. We lost in the depression some part of our shipbuilding capacity, and in the last few years, owing perhaps to the state of depression in the shipbuilding industry, great efforts have been made to make the industry more efficient, to enable processes to he carried out more cheaply and with a smaller number of men. You have to-day a machine which takes the place of eight men who used to punch ship plates. That means that a yard can now carry on with about half the number of men who were required in the old days. That process is continuing all the time. It is quite impossible for us merely to sit down and hope that an ordinary revival of our staple industries will get us out of our trouble. We must have new industries.
I welcome these proposals as a further step on the road leading to prosperity, and I shall support them. I have never thought that there was one grandiose scheme to be devised for curing our ills. It needs a combination of efforts. This is one further step, but I do not want the Minister to think that this is the last step he will have to take in this Parliament. I am quite certain that the real step to be taken is in connection with the location of industries, and I hope that when the right hon. Gentleman has the report of the Commission he will see how absurd it is that, in a small island such as ours, we do not make full use of our restricted area, and that we allow beautiful, residential districts, agricultural districts, to be spoilt by placing industries in their midst, whilst in the districts where the people and the houses are, where all the social facilities

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are to be found, we leave people out of work and do not bring industries to their doors. We have realised the value of town planning; we want now national planning, which is only town planning on a bigger scale.
Although I have taken up rather longer time than I should, there are one or two minor points which affect my constituents —points which have been given to me to represent in the House. The first is in regard to the Special Areas Reconstruction Association. People say that the rate of interest is too high. That may be the case, but, of course, the rate of interest when you are borrowing money is not really the big item. When you are borrowing £10,000, or £400, or £500, the real thing which stops people making use of the Reconstruction Association is that the methods of giving the assistance are too much like the assistance which banks give. I had a case of a man who wanted to borrow £8,000 and he was told that lie would have to find £8,000 of his own. If a man can provide £8,000 of his own to build an industry, and requires a further £8,000, he does not need to go to the Association, because any bank will lend him all the money he requires.
The second point is that the term of repayment is too short. A man must get his factory going, and when he has got it going and gets more work, so his need for working capital increases, and it is impossible for him to pay back within the short space of five years. Another point is the trading estate. The hon. Member for Gateshead (Mr. Magnay) has said that it has been put down in his constituency. We think it should have been put down near Sunderland, where it would have us and other people and we joined together with others in putting before the Commissioner a site which would be suitable. That has gone from us, and I want to point out to the Minister that the trading estate situated as it is will not bring any help to the people of the town. It is too far away for the people to travel to and from work. I should regret very much indeed if further efforts in this direction were attempted in the same constituency in which the present trading estate is situated. I must apologise for speaking on local matters, but they are questions which are felt keenly in my constituency.
Another point is this. In the new proposals power is to be given to the Com-
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missioner to erect factories outside these trading estates in different towns where the need arises. It is felt in Sunderland that there should be power to erect these factories before a definite order has been issued. Very often someone comes along, makes an inquiry as to a factory, but because no factory is at that moment available goes away to one of these new trading estates and the town loses the chance. We feel that there should be power to erect these factories in advance of requirements. I do not think I need detain the House further. I shall support these proposals. I welcome them as a further step, but only as a further step and not as the last word on the subject.
12.43 p.m.
Mr. E. Dunn: I am sure we all appreciate the speech which has been delivered by the hon. Member for Sunderland (Mr. Furness). My impression, after having listened to the debates on this question on previous occasions, is that all sections of the House fully realise the magnitude and the complexity of this problem, and hon. Members from South Wales and from Durham and other distressed areas have emphasised the human tragedy which is connected with it. I am glad that the Minister of Labour in his speech last Tuesday on the Financial Resolution which he was presenting to the House surveyed the problem of the distressed areas and at the same time did not exclusively tie himself down to the Special Areas. I was glad to find that the right hon. Gentleman took cognisance of the fact that not only were the Special Areas within the compass of the Financial Resolution, but that there were other districts outside those boundaries which need the assistance of the Department. I do not for one moment wish to minimise the problem which is presented to the people of Wales, Durham, Northumberland, and Scotland, and I sympathise with them in what is a difficult and complicated problem, but there has been very little talk in the House of the areas outside the Special Areas.
In order to clear my mind on this matter, I examined the Ministry of Labour Gazette with a view to getting a proper survey of the general position. Taking twenty or thirty of the towns that are worst hit, in Cumberland, Durham, Northumberland, Scotland and Wales—including Merthyr Tydfil, Pontypridd, Tonypandy and Blaina—and those that

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are worse hit in Yorkshire, I was amazed to find that the position of Barnsley, Castleford, Hoyland, Normanton and Thorne, which are mainly mining towns, is almost as bad as the position in the four Welsh towns to which I have referred. Taking the figures for July, 1933, 1934, 1935 and 1936, I found that in Normanton the percentage of unemployment in that month was higher than in any town in Wales. The average unemployment in those five distressed areas in Yorkshire—I am not speaking for my own constituency at the moment—taken as groups comes second in the whole of the country.
It was very kind of the Minister of Labour to tell us that, as far as Yorkshire is concerned, provision has been made for the erection of one factory outside the boundaries. I do not wish in any way to stop the work that is going on in the Special Areas, but I wish to point out that in the Yorkshire coalfield the percentage of unemployment, in July, 1936, was, at the lowest, 36.2 in the town of Castleford, and, at the highest, 67.2 in the town of Normanton. That being so, I submit that the Yorkshire coalfield has not had the consideration to which it is entitled, and I wish to impress that matter on the Minister, in order that such consideration may be given at an early date if there is anything more left in the bag —I do not know whether there is or not. I submit that the case for the Yorkshire coalfield has been made, and the Minister of Labour would do a great service to Yorkshire if he would consider the serious problem of unemployment there.
The hon. Member for Sunderland (Mr. Furness) said that this country depends upon coal, iron and steel, and shipbuilding as its basic industries. No hon. Member on this side of the House criticises the Financial Resolution except on the basis that we regard it as being a niggardly Resolution to deal with such an important and gigantic problem. The point I wish to make is that the money that is to be used by the Government to assist the Special Areas ought to be devoted to something which will be of permanent value to the nation. I consider that much of the money that is likely to be spent will not bring a permanent national advantage. It will go mainly to preparations for war, to the Defence programme, and it will be no
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consolation to South Wales to know that at the end of five years their plight will be worse than it is now. It will not be any consolation to any area which is to provide the guns, aeroplanes and other armaments to find, in four or five years' time, that which we found in Sheffield after the last War. I think the second plight of these areas will be worse than their first.
If we are to do something of permanent national advantage, we must look very much deeper, and take a much more statesmanlike view on the question of unemployment than appears to be taken by the Government at the present time. They are merely making preparations for war and hoping that war will not come—as every hon. Member profoundly hopes—but that is not a solution of this problem. Paragraph B of the Financial Resolution makes provision
"in any Special Areas in connection with the execution of works of field drainage."
Every hon. Member deplores what is happening in the Fen district at the present time. This provision is for "field drainage." What that means I question very much. It seems to me that it is simply tinkering with the problem. It is not a statesmanlike suggestion, at any rate, for dealing with the drainage of this country. In my own constituency and immediately round South Yorkshire there are thousands of acres of land which are all waterlogged at the present time. In the Don, the Dearne and the Rother valleys, thousands of men are out of work. Indeed in the Rother Valley some men have not been at work since 1921. Yet in my own constituency, right upon the doorsteps, so to speak, of these men, there are thousands of acres of land under water.
If one could take a bird's-eye view from Chesterfield to Goole right down the Rother, the Don and the Dearne at the present time, one could see thousands of acres flooded and much of the land permanently water-logged. I may be told that some work has been done in this connection by the catchment board; that the Don is being cleaned out and that the position now is better than it was some time ago. What I want to press on the Minister, however, is that the Government ought to be responsible for doing something of a permanent character. I submit that the depression in the steel trade in Sheffield and Rotherham, and in

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the coal trade of Yorkshire has been contributed to in a very large degree by lack of transport.
The picture, as I see it, is this. If a statesmanlike view is taken of the problem of drainage in these days, with the object of reaching a solution which would give permanent prosperity to the iron and steel and coal industries and indeed, to agriculture, there is one proposition clearly, which the Government ought to examine. I earnestly beg the Government to examine the proposal of a ship canal from Goole to Sheffield. I ask them to consider whether the time has not arrived for the consideration, with technical experts and all concerned, of such a project. In my view, it would not prove to be a very expensive proposal in relation to its value. It would be of permanent national value, it would benefit the iron and steel, coal and shipbuilding industries while it would result in thousands of acres of land being reclaimed and brought back to cultivation. I submit it to consideration as a scheme of permanent benefit which might well have been included in provisions of the kind which we are now considering.
What would be the advantages of a scheme of that kind? First it would find work for thousands of unskilled men who are now out of work. We are told from both sides of the House that skilled men cannot be secured. We are told on the other hand and we know that there are thousands of men out of work in the areas which would be affected by such a scheme. In the area which would benefit most by it 53.7 of the men were out of work in July, 1936. Secondly, it would quicken transport and would be to Yorkshire what the Thames is to London. I suggest that up to now we have merely been tinkering with the unemployment problem and that there has been no statesmanship about our approach to it. I beg of the Government to consider the scheme which I have briefly indicated of providing in Yorkshire what Manchester has had for 60 or 70 years, and to consider the possibilities of a ship canal between Goole and Sheffield on exactly the same lines as the Manchester Ship Canal. I am satisfied that industrialists, local authorities and everybody concerned would help such a scheme and that it would bring permanent prosperity to the whole of that county.
1.2 p.m.
Miss Ward: I should like, first, to congratulate my right hon. Friend the Minister of Labour on the production of this Bill, embodying as it does a most important principle for which many of us have fought for a very long time. My right hon. Friend knows that I do not always agree with him, but I wish on this occasion to congratulate him warmly on the success which he has attained in dealing with the Special Areas since he became Minister of Labour. Those of us who represent Special Areas and who are naturally impatient of delays, sometimes fail to realise the variety and detail of the work which is carried out by the Ministry of Labour, and there are few opportunities for the Minister to explain to the House the many things which he does so adequately and so well, and for which, I fear, we do not always give him the appreciation which he deserves.
I wish to raise two points in connection with these proposals. One is in relation to the introduction of industries which may take advantage of the financial provisions of the Bill. I am of a rather inquisitive turn of mind and I am not satisfied that there is all the co-operation which there might be between the Minister for the Co-ordination of Defence and the President of the Board of Trade and the Minister of Labour. I do not regard the question of new industries as one entirely for the Minister of Labour. It is true that he has to stand the bulk of the attack from the Opposition and from those of us who represent Special Areas, in regard to the production of these new industries, but I think that we might sometimes turn our attention to other Ministers. Being of an inquisitive turn of mind I should like to know how many conferences have been held between my right hon. Friend, Lord Portal, the industrial adviser to the Ministry of Labour for the Special Areas, and the Minister for the Co-ordination of Defence and the President of the Board of Trade.
I have ventured to put forward a small idea. One of the things that we appreciate most in my right hon. Friend is that when one puts forward ideas he always examines them. He does not always tell us at the time that he is going to do so, but he does it, and those of us who have had experience of working with the Minister of Labour appre-

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ciate it. Sometimes one does not always obtain the same consideration from other Government Departments. The ideas one puts forward are probably bad and are not even worthy of consideration, but it is interesting to know whether they are regarded as good or bad ideas, and we like to hear pronouncements on them. We ought to consider production of the goods which must be provided in this country because they are essential to our Defence requirements, and for which there is no provision at the present time. The Caledonian Power Bill is an example. We understand that it is essential we should produce calcium carbide in this country, and there is a variety of other things, as the Minister for the Co-ordination of Defence said the other day, spread over a wide range of industries, which must be provided for.
I suggest that responsible industrialists in their federated groups should be approached through the proper channel, which is the Ministry of Labour, on information supplied by the Minister of Co-ordination and the President of the Board of Trade, and proposals should be examined from all aspects for the production of these particular essentials with a special bias to the Special Areas. A great deal was said on the Caledonian Power Bill about producing calcium carbide in the Highlands, but I deprecate bringing forward plans for producing only one item at a time for consideration by this House. The Government should bring forward all the essentials that are required in this country, so that those who can deal with them and who know all the technical details of production could be consulted. The Government could then give their ideas as to where these industries should be set up, with the bias always towards the Special Areas. Again, in relation to what might be called the gap in industrial production, there are a large number of things which I am certain we could produce here economically which are not now produced. The production of plywood for use in shipbuilding is an example. Recently Swan, Hunter & Whigham Richardson, a well-known and reputable shipbuilding firm on the Tyne, have made arrangements to produce plywood for use in their shipbuilding yards, and presumably in the yards of other firms on the Tyne. I understand that Swan Hunter previously drew their supplies of
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plywood from Germany, and if it could be produced profitably in this country we should probably manufacture it for a considerable number of years, and that would be a great benefit to the Tyne.
I use that as an illustration of my point that it seems to me worth while considering the industrial gaps in this country with the idea that we should try to produce these goods in the areas which are within the ambit of the Special Areas Bill. While it is entirely for the Minister of Labour to give facilities for the industries, the production of these goods should surely be the aim of the President of the Board of Trade and the Minister for Coordination. After a little pressure, I have now got a certain amount of assistance from the Board of Trade with regard to the possible production of the details of those industries which might fill the industrial gap to which I have referred. A great many of us, however, think that more co-operation and a greater urge from the President of the Board of Trade and the Minister for the Co-ordination of Defence for the production of these industries in the Special Areas would give my right hon. Friend the opportunity of encouraging industrialists to take advantage of this Bill. I do not believe in the compulsory location of industry, but I think that we might make a greater appeal to manufacturers. If we went to them and said, "Here is a wide range of things, give us your plans; the Government desire to produce them in the Special Areas and we will give you certain valuable facilities under the Bill," we might get one stage further. I suggest that greater co-operation from the other Government Departments would be advantageous to my right hon. Friend who, I know, is anxious to find a solution for this problem of establishing new industries in the Special Areas.
There is the question of the production of labour for the new industries which we hope we shall get. An important point was made in the first Report of the Commissioner with regard not only to the medical standard, but to the whole conditions of young men in the Special Areas. I have always valued the work of the Government training centres, for they have been of inestimable value to the country and to the young men. I appreciate my right hon. Friend's point in making it compulsory that when a man is accepted for a training centre he

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should say that he is willing, if no local job is available, to be transferred to another part of the country. Now that there is a widening of industrial prosperity, I suggest that it might be worth while considering whether that condition should be made a little easier, for if a man does not accept that condition he loses the advantage of going to a centre. My right hon. Friend knows that there is a certain shortage of skilled and unskilled labour in the mining industry. —HON. MEMBERS "Where?"]—I happen to know that in a large number of collieries in Northumberland there are openings for men.
Mr. Batey: We will send some men from Durham.
Miss Ward: We are very fond of Durham men, and I like my hon. Friend very much, but at the present moment I should prefer that the Northumberland pits should absorb more of the unemployed men of Northumberland. If men have been out of work for a long time the mining industry is one of the most difficult in which to restart, because it entails hard physical labour and they need to be put into a really sound physical state before they can undertake that work again. I am told that there are a large number of young men, or a large number of men entitled to work in the mines, who are willing and ready to do so but who, owing to the long depression, are not in a fit condition to undertake the work.
I have a suggestion to make here with reference not only to the mining industry but to other industries. Would it not be possible, with the co-operation of labour and of employers, to select some 20, 30, 40 or 50 men for a specific job, and to let them have the opportunity—on a voluntary basis, I am not suggesting that it should be compulsory—of first taking advantage of a spell at Kielder? I suggest that when they return from Kielder they should go straight to the jobs which would be waiting for them. I know there have been difficulties over camps such as Kielder, but it has always seemed to me that one of the chief difficulties was that men who have gone voluntarily to Kielder and have spent three months under the very good conditions there, but doing very hard work, cannot find any opening in employment when they return from
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Kielder, and I entirely sympathise with their grievance on that score.
Where new openings are presenting themselves in industry, as in the mining industry, and as there will be in other industries as a result of the operations of this Measure, can we not relate the work of the training camps such as Kielder to that new situation, so that when the men have left the camps they shall be placed in industry straight away? I very much regret that the Government have not, so far as I know, tackled that particular recommendation in the Commissioner's report. There is a very great deal that might be done. I should like the Minister to give consideration to the establishment of industries through the Federation of Industrialists, and the provision of more young men who are in a fit physical condition to undertake work, because I feel that with all his power and with all his very real human understanding he will find, when this Bill is on the Statute Book, that there will be many more opportunities for new industries in the Special Areas, and many openings for the far too large number of unemployed who still remain to be placed in industry.
1.19 p.m.
Mr. David Adams: We have certainly reached a stage in the discussion of the Special Areas question at which it has become an almost threadbare topic, and in spite of the natural desire on the part of the Opposition to criticise the policy of the Government over this Special Areas Resolution we feel it to be almost a matter of Christian charity to place the best possible construction on the action of the Government, though personally I find it very difficult to exhibit the requisite measure of charity. When we find that at the moment when the Special Areas Bill is under consideration the Government have decided that the location of industry is to be taken out of the ambit of practical politics and submitted to the long investigation of a special Committee, the Government's sincerity may justly inspire some doubts, however charitable we may feel towards the general propositions submitted to us. This Resolution savours of considerable delay.
There are one or two matters on which I seek information; possibly when we have the Bill before us they may be cleared up. I am anxious to know why the new Government money—a parsimonious sum,

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only £2,000,000 for the whole of the Special and certified areas—is to be handed out in the case of the certified areas to some new form of limited liability profit-making company. One would imagine that we were living in Central Africa. Are not the local authorities in the certified areas competent to discover the necessary factory sites? Do they not know from their rate-books where there are vacant sites and vacant factories? The Government have adopted a most roundabout method of establishing new industries in the certified areas. They are financing, to the extent of 25 per cent., a new company in each area charged with that work. What is to happen when these new companies cease to function? They will be wound up in due course and in the winding-up money will be lost. I suppose they will be limited in the matter of their dividends, but where are the dividends to come from? Beyond pointing out new sites to industrialists, what particular forms of activity are they to undertake? I hope these points will be elucidated.
I take it there is not to be any prohibition on the work of the industrial boards in these areas. In the main those industrial boards consist of local authorities which have voluntarily levied themselves a rate of one-eighth of a penny in order to furnish funds for the task of developing new industries in the area and expanding the older industries. Those industrial boards have every minutiae of information necessary, know the sites, the rating problems, the position as to electricity, gas, water and transit, and all the data about the quantity and the quality of the labour available. The extraordinary declaration is laid down that no loans can be granted to industrialists to take a new factory except from a site company. Why should local authorities not be permitted to point out sites which they may have upon their land? Many of the areas in Tyneside are owned by the City Council and, if that stipulation is to apply, not only in the certified areas but in the Special Areas, a barrier will be placed against a quick and active method of securing additional income.
So far as County Durham is concerned, as long as the Government decline to assist in bearing the rating burdens and the weight of heavy local taxation, industrialists will hesitate long before
2496
they go to these coal-mining and relatively derelict areas. They will not go there unless a definite location-of-industry policy is instituted. A diversity of industries could be located there, if the necessary pressure, given inducements, were brought into being. It is true that certain facilities are to be granted under the Resolution; I am grateful for that relief to new concerns, in Income Tax, a certain portion of rating burdens and of rents, but we do not know to what particular areas it will relate or to what particular industries. When the period of five years has passed, unless those benefits materialise, the new industries will be heavily burdened by rates. I am not surprised that, following the printing of the White Paper and the publication of the propositions of the Government, the Durham County Council began to consider the summoning of a great conference, representative of every class in the county, labour, and industrialists, mine owners, religious bodies and others, for the purpose of submitting specific plans to the Government for the location of industry and for dealing with rate and other burdens in the area, not dealt with in the proposals now before the House.
I have taken some personal interest, because of pressure by constituents, in the operation of the Special Areas Reconstruction Association, Limited. I express my gratification that the new money is not to be administered by that Association but by the Treasury. I have already pointed out that the Treasury ought to have retained and administered the original £1,000,000. It did not do so, but left it to a purely profit-making concern. The result was that normal banking concerns are asking for normal banking conditions from would be borrowers, and that the Special Areas Act is virtually a dead letter. Some £300,000 or £400,000. distributed over the whole country, is all that has so far been taken up of the £1,000,000 guaranteed by the Government. That is a very melancholy fact. I know several industrialists from Tyneside who would be prepared to start new industries which, though they might be small at the beginning, might, in process of time, grow to be great concerns. We had that experience on Tyneside, Armstrong Whitworth's, which began with a small blacksmith's shop, developing into one of the greatest armament and shipbuilding concerns in the world.

2497
One of these small industrialists said to me: "The terms on which I am offered the money which I require, the relatively small sum of £5,000, would be such that if there were a war and the factory were bombed and destroyed, not only would I lose the capital which I had invested in the concern but have had to give with my co-directors joint and several guarantees pledging the whole of my resources. In the event of such a disaster, I and my family would be completely ruined." Such terms are quite contrary to the declarations which were made when the Measure was placed upon the Statute Book. We ask the Minister to advise us that there may be no mistake about it, whether similar terms are to be exacted for the new Treasury money, or whether there is to be a more generous outlook. If the outlook is more generous there is more likelihood of a response, although I do not believe there will be a response in respect of the coalmining areas, because of the burden of rates upon would-be industrialists. When one remembers that in Greater London there is now about a quarter of the rateable value of the whole country and about one-fifth of the industry, carried on within about 20 miles radius of Charing Cross, and that about 40 per cent. of the new factories recently built were established in Greater London, one realises the imperious necessity to the Special Areas of a proper location of industry. Durham will receive, by the readjustment of the block grant, a relief of about 10¼d. on the rates. The burden of public assistance is 8s. in the £, as against 3s. in other parts of the country.
Mr. Rowlands: Can the hon. Gentleman tell us how the block grant works out in rates per £ in that area?
Mr. Adams: Yes, it will mean about 10¼d. relief in the rates.
Mr. Rowlands: I am afraid that the hon. Gentleman did not understand my question. He quoted the relief of rates for the area; could he give me information of what the block grant works out at, in rates per£, for the same area?
Mr. Adams: I think it was about 1s. 10d. in the pound, but anyhow the relief to the local ratepayers has been limited to 10¼d. in the pound, leaving the county of Durham with a charge almost three times as high as in the rest of the
2498
country. If the Government looked ahead and adopted a long-term policy and used their influence with industrialists to induce them to come to our district, I think much might be achieved. Instead of that we still have the means test, there is still migration going on taking the best quality of our young labour from us, and training centres are still outside the area. Everything that is required in the matter of industry is outside this area. I would like to say a word about the attitude of the Government in the matter of the locomotive works at Scotswood-on-Tyne. There was great rejoicing when those works were set up by Armstrong Whitworth and Co., and the venture was enormously successful. Many thousands of men, young and old, have been engaged in those works. They provided a centre for engineering training of a highly technical character. Now we learn, I would say almost to the horror of Tyneside, that this industry in order to make way for shell-filling is to be transferred to the Manchester area.
What is to happen at the end of the armaments boom period? Tyneside is to be affected to a most serious extent by the loss of this important part of the engineering industry. I asked the right hon. Gentleman the Minister for Co-ordination of Defence whether he could not see his way to take over other factories for shell manufacture and filling on Tyneside, because within a radius of five miles of Newcastle Town Hall there is a wilderness of empty factories. I could get no satisfactory answer. All that the Minister stated was that no more orders for locomotives were to go to Scots-wood, and presumably they will go to Manchester and other parts of the country. That is not fair treatment for the Special Areas, and Newcastle is a Special Area.
That is a sample of the casual and careless attitude of the Government. There was the instance of White Waltham. It was proposed that a new factory should be placed in an out-of-the-way district to the detriment of agriculture. In County Durham there is room for a number of industries if rate relief could be offered and Government assistance given on a generous scale. A Government clothing factory might be established. There is no lack of first-class female labour. In Gateshead private enterprise provided a clothing factory. It was an experiment by a benevolently-minded

2499
private person, and it is a great success. Another factory of that kind could be established in County Durham. If there is lack of transport facilities, that could be remedied by special action on the part of the Government. But the Special Areas are not recognised by the Government as requiring special and particular treatment. With the best will in the world I cannot see that County Durham, with its thousands of unemployed anxious to obtain work, will benefit under this Resolution in any appreciable degree.
1.42 p.m.
Mr. Rowlands: It is obvious that there is considerable difference of opinion as to what will be the result of the Financial Resolution, but I think there is universal appreciation of the importance of this very difficult problem. I cannot help feeling that several hon. Members opposite have not been quite fair to the Government and have not recognised what has been done in the past. We have been told by the hon. Member for West Rhondda (Mr. John) that local authorities are bound to be seriously disappointed because there is no mention in the Financial Resolution of anything dealing with them. I want to point out that successive Governments have appreciated the difficulties of local authorities in poor areas for many years. Even before the block grant system was introduced there was the necessitous areas grant, under which those areas which needed most received most. When the block grant system was introduced it was based upon a formula intended to help the poor areas most. Hon. Members who are connected with local authorities will know that it is called a weighted population formula. Provision is made according to the number of children under five and the number of unemployed and so on. The higher the amount of unemployment the more grant will an area receive under the block grant system. The hon. Member opposite compared the public assistance rate in different areas, but when I asked at what amount the block grant worked out in the rate per pound I failed to get any proper answer.
Mr. Adams: May I remind the hon. Member that I told him the amount was 1s. 10d.? I have since ascertained that the amount is actually 1s. 9d.
Mr. Rowlands: But what was the total rate for that area? I asked some time ago what was the public assistance rate in a special area and what was the rate in a southern area. The public assistance rate was 8s. 8d. in the one case and is. 2d. in the other, but the block grant worked out at 10s. 10d. in the first case and only 1s. 4d. in the second. This is a very important point, and to depreciate what has been done in the past in the interests of the Special Areas by way of relief in rates is not showing a proper appreciation of what the Government have done. We were told by the hon. Member for West Rhondda that under the last arrangement Glamorgan would benefit to the extent of 2s. in the £. I am very glad to hear it, and should be still more glad if the benefit were greater. In Glamorgan there is a very good social service throughout the whole county, and I hope that now, in view of the importance of the question of rates from the standpoint of new industries, the administrators in Glamorgan will pass on that relief to the people who pay the rates.
Mr. John: Eighty per cent. of it has already gone to the Railway Rates Tribunal.
Mr. Rowlands: I appreciate that there has been a loss in regard to the railways. We are told that in the White Paper there is no mention of assistance to the local authorities, but surely hon. Members opposite will agree, when a Financial Resolution has been authorised in order to aid new industries coming into a district by grants in respect of rent, rates and Income Tax, that it is an advantage to the local authority of that district. I congratulate the Minister on that part of the Financial Resolution which provides special inducements to industries to come into these areas. The last speaker said that the Government failed to appreciate that the Special Areas required special conditions, but these conditions are unprecedented in the history of our country. It may be said that they are not enough, but never before has any individual been endowed with authority to assist industry by the payment of rent, rates and Income Tax. That will be a distinct advantage, and I would much rather see special powers of this kind than palliatives which in the end would leave matters worse than they were at the commencement. If care is

2501
taken, as evidently it is, in the selection of suitable industries which will be permanent in those areas, a great deal of permanent good will have been done.
As regards the mining industry, I am not optimistic. I know that there are those who pin their faith to the production of oil from coal, and I believe that sooner or later that will become a national necessity, but, even if we produced from coal every drop of petrol that is consumed in this country to-day, it would mean work for only 54,000 more miners. Consequently, the prospects of the mining industry in those areas do not seem to be very bright. It is true that we are at the moment experiencing a slight boom, which has made the Joint Committee of the coalowners and the Mineworkers' Federation change their mind as to the necessity for a subsidy for export coal at the present time. But, however one looks at those areas where coal has been predominant, one has to come to the conclusion that a large number of these people will never be re-employed in their own industry, and consequently we ought to welcome all the more the proposals of the Government in regard to the establishment of new industries. The hon. Member for West Rhondda said that only two of those new industries were industries independent of armaments. I am not an authority on what is required for armaments, but I understand that in South Wales arrangements have been made to establish a glass factory, a sewing machine factory and a biscuit factory. These would hardly come within the category of armament factories.
Mr. John: I was referring to the proposals of the Government in the White Paper. Those are not in the White Paper.
Mr. Rowlands: No, but the House was told by the Minister of Labour, when he was putting forward these proposals, what arrangements had been made and what industries had already been established. I have mentioned three. Another is the concrete industry at Port Talbot. In my opinion the Government's action will have a permanent effect on this most serious problem. Moreover, there is the help which the Commissioner has given to the local authorities by way of grants towards public health services. We all hate to think of young people being trans-
2502
ferred from these areas, but to say that no special efforts or exceptional proposals have been made for the purpose of assisting those areas is in my opinion to fail to appreciate what should result from this Financial Resolution.
The coalmining industry, unfortunately, is in a very serious state. I am very glad to see that a low temperature carbonisation plant is to be established in South Wales. As a miner, I became unemployed in 1928, and at that time I read a speech by the late Lord Melchett, as Chairman of Imperial Chemical Industries, in which he told the shareholders that oil from coal was almost a commercial proposition, and that he was looking forward to the time when it would be giving employment to a great number of miners like those who were unemployed in my neighbourhood. Twelve months after that, Sir Harry McGowan expressed the same opinion, and later we read in the Press that a certain Cunard liner had crossed the Atlantic fuelled by colloidal fuel consisting of 60 per cent. of coal suspended in 40 per cent. of oil. That made the unemployed miner dream of colloidal fuel depots here, there and everywhere, and the provision of more work for him in consequence. The disappointment that the miners have had from these predictions as to what can be done has been so great that I sincerely hope that, although it may not be a commercial proposition, national necessity will compel either individuals or the Government to take up this question of the production of oil from coal and so take another step towards solving this most difficult problem. I welcome the Resolution.
1.56 p.m.
Mr. Rowson: The Minister has been congratulated by certain Members, and no doubt he appreciates it. I cannot congratulate either him or the Government, because I consider the Resolution totally inadequate for the things with which it is supposed to deal. I recognise the difficulties of the Minister in dealing with the matter, and if there is any Member of the Government in an abnormal place, to use a mining term, he is. He has certainly the most thankless task of any Member of the Government and the most difficult set of circumstances with which to deal. If I happen to say a few things which are not as

2503
palatable as he would like he will know where my feelings lie so far as his task is concerned. Hon. Members, principally supporters of the Government, have given him enconiums and congratulations on what he is doing and have almost invariably proceeded to show up the total inadequacy of the Resolution. Even the Member who has just spoken says this, that and the other might be done in addition to what is suggested. The hon. Member for Wallsend (Miss Ward) suggested that we ought to manufacture our own calcium carbide and other things, and I suggest that she ought to join with the agriculturists, who want to grow our own foodstuffs, and do this, that and the other, and when she has finished and carried her proposals to a logical conclusion she will find that there is no need for the shipping industry on Tyneside; there will be nothing for it to do. I never heard anything more illogical in my life.
The hon. Member referred to a scarcity of miners in Northumberland. I am sure my hon. Friends would be startled to hear of a shortage of miners almost anywhere in the country. We heard the noble Lord the Member for Aldershot (Viscount Wolmer) talking a few weeks back about a shortage of miners in Lancashire. I notice that the hon. lady spoke of a shortage of skilled men. When we talk about skilled men in the mining industry we are alluding to the skill of the men who used to work by hand. There is less necessity for that type of miner to-day than ever there was. Conditions have been changed by the introduction of mining machinery, but is it that hon. Members want men who can be sized up—chest measurement, height, weight, measurement of biceps and so forth—do they want someone trained up to the physical condition of a footballer and, if they are not up to that condition, are we to regard them as being unskilled and have them treated and reconditioned in periods of unemployment? I know Lancashire very well. When you are talking of unemployment in this industry you must have regard to certain things that are taking place now. Even in 1936 we were employing 10,139 fewer men than in 1931, and we produced 76,000 tons more coal. That is the problem that you have to face. The hon. Member for Flint (Mr. Rowlands) talked about production of oil. With the scientific
2504
application of machinery to the coal industry we could start producing oil to-morrow, but it would displace labour and cause more unemployment.
This discussion has nearly all gone one way, that is, asking for more than is contained in the Bill. I can describe the resolution only as a pill to cure an earthquake. The hon. Member for Silver-town (Mr. J. Jones) once described some remedy prescribed by the Government as a sticking plaster for wooden legs, and this will be about as effective. We have had many references on both sides of the House to the location of industry. Far be it from me to belittle or discredit the transference of industry or the establishment of industries in the distressed areas, but let us face the question whether this is a remedy for what confronts the nation. You can take the whole field of commodity production—clothing, agricultural products, boots and shoes, coal, cotton, wool, whatever you like—and I do not see any real scarcity. As far as I can see, it brings us up against this problem: Some time ago a certain mine was closed in Lancashire, and one bright indivdual said that the men should work a week at a time in turns, and so share the work. I take it that if we transfer industry from the south of England, and put it in Lancashire, we might get the people back to work there, but the people in the South would lose their jobs.—[An HON. MEMBER: "They are working overtime now."]—That would not be a remedy; it might alleviate the problem in certain areas. We must also recognise that as in the case of the pit, it is not only a question of sharing the work, but of sharing the poverty and misery as well. It is a two-edged weapon. I grant that if there is anything that is new that can be introduced in these areas, it will alleviate the position, but it will perhaps, have it repercussions in other areas.
I want to go a little further in dealing with this situation and face up to the problem that confronts this and other nations. I do not regard this proposal as being a remedy at all. It is merely a palliative, and this House and the Government ought to deal with the problem in a much more definite and comprehensive manner. We have gone on now from 1929 to the present year, and although the economic blizzard which struck the world is supposed to be lifting, we must recognise that this country

2505
and other countries can never recover their former position in the world. In Lancashire, in view of the depressed sections that we have there, it would be very difficult for the cotton industry to get back its former status. We have sent cotton machinery and woollen machinery to every part of the world, and we have also sent out our technicians. We have not only provided the machinery in China, India and Japan and other countries, but we have taught them and given them the skill that there was in Lancashire, and they are not only producing for themselves, but are competing with us in the rest of the markets of the world. This is a problem with which this nation and Government have to contend during all this talk about recovery.
Another thing which, I hope, the Government will take into consideration is that we may not be very long, even according to the evidence of Sir William Beveridge, before we are confronted with another economic blizzard. Many experts are telling us of this, and it is a very serious thing for this country to contemplate at the present time. The right hon. Gentleman the Member for Carnarvon Borough (Mr. Lloyd George) referred to it last week, and I am sure that the Minister of Labour will appreciate the position. We have been on the upgrade at least since 1934 and have been getting away from the bottom of the slump, no matter who is entitled to the credit for it. But we have a set of circumstances in this country which we have never had before in the turn of the trade cycle. We have well over 1,000,000 unemployed, and that is a very alarming feature of our economic life to-day. Hon. Members on that side of the House, and on this side as well, have to remember, in considering the unemployment problem, the economics of the system under which we are living.
By the scientific application of machinery to industry we are increasing the productivity of labour by leaps and bounds, and employers are trying to prevent wages from rising. Those who know anything at all about economics realise that the workers never get back in wages sufficient to buy the products of their own labour. It is with that fact in mind that we shall have to face the slump or depression which will hit us in the future. We are now trying to remedy the
2506
chronic economic ills of the last slump, and I am certain that there is not an hon. or right hon. Member in this House who appreciates the human misery and the tragedy of the depressed areas more than does the right hon. Gentleman. None can get any pleasure out of seeing all the misery, and the ill-clad, ill-fed and under-nourished men, women and children in those areas.
I would urge upon the right hon. Gentleman something which is much more needed than that which is provided for in this Money Resolution. I want the general situation to be taken more into account than it is to-day. I am satisfied that, if no war takes place after this armaments programme is finished, this country and other countries will have to face the worst economic crash that has ever been known in the history of the world. That is the prospect, if one tries to visualise the circumstances after our programme has been completed; and yet here we are talking in the midst of a so-called boom and proposing to utilise £2,000,000 for the distressed areas. I do not know what will become of the certified areas. I suppose that Lancashire may be one of the certified areas, but I understand that the gentleman in charge in Lancashire, Sir Thomas Barlow—and we are not regarded as a depressed area, we have only patches—says that £500,000 is wanted for Lancashire alone, and accordingly we shall have to go to the funds outside.
A much more comprehensive view of this problem should be taken by the Government than is being taken in this Money Resolution. On the Committee stage of the Resolution I made some reference to my own constituency, and I am a bit perturbed whether or not we shall get anything out of this proposal. I gave the example of a firm who have taken over an old cotton mill and are converting the machinery for the production of artificial silk. I would like to see such an industry developed in that area, because over 20 cotton mills have closed down in my constituency since 1924. If they can be profitably converted to some other process, we ought to encourage and help them as much as we can. While paragraph (c) of the Resolution will provide for something being done, I am a little alarmed at the words there included. It says:—

2507
"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."
I do not know what will be termed as severe unemployment."If a thousand people have been out of work for eight or nine years, will that be as severe unemployment as a case where say, 10,000 people have been out of work for three or four years? Which will be the severer test or considered to be the severer case? It seems to me that this is a provision which will almost cut out the type of case I have been speaking about. I understand that in this case it is not a large sum of money that is required, and I wish I could get something from the Minister, meagre though his powers are under this Bill. I would like to see a thing like that developed in my constituency. While I commiserate with the right hon. Gentleman in the task he has to face, and while we will not vote against this Resolution to-day, we have to tell the country, the Government and our constituents that we are wholly dissatisfied with the meagre provision made.
2.16 p.m.
Mr. Batey: I want to express my disappointment with the proposals in the Money Resolution. When the Government undertook last December to bring in a Bill dealing with the Special Areas they raised the expectation that they meant to do something substantial. These proposals are similar to everything in the policy of the Government during the last three years in dealing with the Special Areas. That policy has been simply one of raising hopes and disappointing them. I not only disagree with the Government in their policy, but also in their endeavour to muzzle members who come from the Special Areas. Some of us who represent Special Areas in this House claim that we are entitled to express the views and the needs of our people. One of the shabbiest things the Government have been guilty of is their effort to muzzle members who come from the Special Areas. Last Friday the Chancellor of the Exchequer made a speech here which seemed to be rather jubilant. He seemed rather excited with the success the Government had in the Special Areas. He quoted a statement from the
2508
speech of the Minister of Labour a day or two before, of which the Chancellor said:
"The story which my right hon. Friend was able to tell certainly indicated an improvement in the situation of the Special Areas owing to measures already taken."—[OFFICIAL REPORT, 12th March, 1937; col. 1572, Vol. 321.]
I come from a Special Area, and I would like to know any measure the Government have taken during the last three years, or any measure that it is proposing to take, in South West Durham that is an improvement. The Government have taken no measures to assist that district, and the White Paper does not contain anything that will assist it. The speech of the Chancellor of the Exchequer was well worth reading, because he showed that away back in March, 1934, before ever the first Commissioners were appointed to make an investigation, he had in his mind ways of dealing with the Special Areas that are well worth looking at to-day. He told us five ways that he had in mind then, and when he spoke last Friday he said that he had a sixth in the rearmament that has since come into the field.
I suggest that the Chancellor's ideas were good three years ago, if he had only had the will and energy to have attempted to put even some of them into force. He said that his first proposal was to revive the older industries: second, to have new industries: third, land settlement: fourth, transference: and fifth, improvement of the social services. So far as rearmament is concerned, we find in South-West Durham no benefit from that. Those in the northern part of the county may have benefited, those in the Tyneside area may have benefited, but in the South-West area it does not mean a single penny to us. All the expenditure of which the Government boast in the North-East on arms leaves us cold. As to improvements in the social services, they are good so far as they go, but they are no substitute for work. Three years ago, when the Government first attempted to deal with the question, we expected that the £2,000,000 that was voted was for the purpose of finding work for unemployed men. The Commissioners have not done any such thing. I put a question to the Minister of Labour on 4th March on this matter, and his answer was:
"It should also be noted that the Commissioner's grants are designed to promote the economic developments and social improvement of the areas and not primarily to provide

2509
employment."—[OFFICIAL REPORT, 4th March, 1937; col. 511, Vol. 321.]
If the object of appointing commissioners for the Special Areas is not to provide employment, we miss the real object of the appointment of commissioners. The White Paper says:
"Up to the present time the work of the Commissioners has fallen broadly into two parts. On the one hand, they have been concerned with the social improvement of their areas and, on the other hand, they have been at the same time engaged in creating conditions that would facilitate the revival of industry in them, and, in particular, would pave the way for the introduction of those new industries which are needed to broaden the economic basis and secure the development of their industrial life."
The Commissioners have been, on the one hand, dealing with the social services and, on the other hand, with the planning of the economic development of the distressed areas; but they have not in the slightest taken any steps to provide work for unemployed men. Until we can get either a Commissioner or a representative of the Cabinet devoted to the duty of finding work for unemployed men, nothing else matters. It is interesting to look over the expenditure of the £2,000,000 which the House voted for the Special Areas two years ago. While one cannot say that the money has been wasted, it has not been spent as the House imagined it would be spent when we voted it. The Minister may talk about the commitments of the Commissioner and total them up to nearly £9,000,000, but the fact remains that in two years only £2,000,000 has been spent.
When the House voted the £2,000,000, our cry was that that sum would be of no use for the distressed areas. No one would have dreamed two years ago that it would have taken such a long time to spend the £2,000,000. When the money has been spent we find that it has not been spent for the benefit of the unemployed or for the main purpose of finding work for the unemployed. From an answer which was given to me by the Minister of Labour I find that of the £2,040,000 spent up to 31st January, less than £250,000 has been spent under the heading of "Industry." There are items for harbour and quay developments, clearance and improvement of sites, trading estate companies and miscellaneous items, but on the industrial aspect of the question the amount spent is less than £250,000.
2510
I find that £375,000 has been spent on hospitals, and such like matters. Those grants could have been made by the Ministry of Health, and ought not to have come out of money earmarked for the unemployed. It is a misuse of money. I am not saying a word against money being spent on hospitals, because any money spent on hospitals is well spent, but my point is that this money has not been spent for the purposes for which the House intended it should be spent. The Ministry of Health ought to have been in a position to give these grants from other money, and not to, take it from the £2,000,000 voted for the unemployed of the Special Areas. There is a sum of £10,000 for the restoration of Durham Castle. So far as a good deal of the money that has been spent is concerned, the expenditure is an abuse of what the House intended. The Government have missed the real intention of the House, and what we are really asking for is that they should find money to provide employment for the unemployed. If they miss them, they miss everything else.
I should like to deal with one or two questions that were raised by the Chancellor of the Exchequer in his speech last Friday. He referred to the question of transference. I should not have said anything on this subject but for the fact that the Minister of Labour answered a question recently put by one of my colleagues with regard to the number of boys and girls between the ages of 14 and 16 and between the ages of 16 and 18 who have been transferred from all the Special Areas. The answer was tragic and staggering. He said that from all the Special Areas in 1936 there had been transferred 3,090 boys and 1,318 girls between the ages of 14 and 16. Some people may say that it is wise to get these boys and girls away from the special areas and find them employment somewhere else, but I would ask hon. Members to think what is meant by the taking away from home of these boys and girls and lodging them away. The Minister of Labour ought to pause in his advocacy of transference. There is not one hon. Member who would allow his own boy or girl to go to employment many miles from home if they were only between the age of 14 and 16. We shall deal more fully with the question of transference later, on the Bill. It is tragic

2511
that transference should be advocated, and that these boys and girls of tender years should be taken away from home to face the temptations of life, where there is no mother or father to look after them.
There was another way in which the Chancellor of the Exchequer suggested that the problem of the transferred areas might be dealt with. He referred to land settlement. I agree with what he said in answer to the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), who talked about putting 500,000 on the land. That is no solution of the problem of the Special Areas. We might be able to put a few men on the land, but we shall not solve the problem of unemployment in the special areas by putting them on the land. South-West Durham is one of the parts which it is suggested should be brought back to agriculture. There is one funny thing in regard to Durham, and that is that when the first investigation took place and the then Civil Lord of the Admiralty made his investigations he came back and reported that Durham needed to be brought back to agriculture. Sir Archibald Gibbs and his partners who recently made an investigation into south west Durham repeated the words of the Civil Lord of the Admiralty three years ago. They say in their report that the remedy for the south west of Durham is for it to revert to agriculture. They got their information from the same source as the then Civil Lord of the Admiralty. The Durham County Council, unfortunately, have a director for agriculture, Mr. Cassells, who advised the Civil Lord three years ago. He is mad upon agriculture, and he got to the Civil Lord and advised him that what was needed in south west Durham was that it should be brought back to agriculture. The people who made this last investigation tell us in their report that he was one of the men they interviewed, and I am safe in assuming that what he told them was that the south west part of Durham should revert to agriculture. Agriculture will not solve the unemployment in south west Durham. Although many pits are closed, there are still many million tons of coal there, and, therefore, what justification is there for anyone to talk about south west Durham reverting to agriculture when this great amount of coal
2512
is still lying there and all that is needed is that the pit should be opened.
The two proposals which seemed to be most important to the Chancellor of the Exchequer were that new industries should be brought to the Special Areas and that old industries should be revived. I shall watch with interest and hope the proposal to relieve industries from Income Tax and rates in order to help them. So far as new industries are concerned, we have put a trading estate in the far northeast corner. If we are going to get no new industries then God help us in the south-west part. It seems to me that someone on behalf of the Committee which undertook this recent investigation, took a train up to Durham then got into a fast motor car which ran him swiftly through the whole of the south-west part. Then he scampered to Newcastle. From the report we can see the way the man went. He says that a trading estate is being erected in the Team Valley and that men in the south-west of Durham should obtain employment on this trading estate. He talks of a village in my constituency as being within 20 miles of that trading estate. Last week I held a meeting in that village and was glad to get out of it during a snowstorm. He says that the men in that village ought to be able to get to Newcastle 20 miles away.
It simply shows that the man who made that investigation knows nothing whatever about the district or of the subject upon which he was talking. Before men in the south-west part of Durham can get to that trading estate in the north-east they will have to go through areas where there are thousands and thousands of unemployed who are nearer to the trading estate. If this is the remedy on which the Government are relying, then there is no hope for us. I believe that the starting of a trading estate in one part of the county with relief from rates and rents, will make it impossible for other parts of the county to expect new industries to settle in their areas. The more you develop the trading estate idea the more you will make it impossible for other parts of a county to benefit from new industries. I want to come to the question of old industries and, after all, the Chancellor of the Exchequer showed that a revival of old industries was the first thing in his mind, and has been so for the last three years. I could give quotations from speeches

2513
he has delivered which clearly reveals this fact.
For three years the Government have been dealing with the Special Areas and for three years they have not taken a single step to revive old industries. In my own area it is purely a mining question. Let the Government solve the mining question and they will solve the problem of these Special Areas. They have been experimenting for three years but they have not taken a single step to help the coal industry. There is nothing either in the present proposals of the Government. They are a sad disappointment to anyone who reads them. They show that the Government have learnt nothing from their three year's experience and that they are not prepared even now to take the essential steps to deal with the Special Areas. The Government, in fact, are now putting forward seven proposals. In the first place, they propose to extend the Minister of Labour's powers to enable him to certify districts as eligible for treatment as Special Areas. All that means is that areas which want to be certified as Special Areas will be disappointed. They will feel, as we do now, that the Government are merely window-dressing in pretending to take them in, and that they will simply do nothing.
The second proposal is a grant of £2,000,000 to help companies to take factories into these areas. I think I had better leave the question of this £2,000,000 for separate discussion, but the Government must know that the one thing the Special Areas need is money, and that unless we can get money we shall still have the problem of the Special Areas. When the Government puts itself on an equal footing with Lord Nuffield and does not go further than he does, it simply shows that if Lord Nuffield had not given £2,000,000 the Government would not have been able to muster sufficient courage to give £2,000,000. When the Bill is brought forward, we shall disagree as strongly as we can with the shabby way in which the Government are treating the Special Areas. The Government are thinking of spending £1,500,000,000 on armaments. If they would give to the Special Areas £l00,000,000 of the £400,000,000 which they are to borrow for armaments, the face of the Special Areas would be altogether changed within a very short time.
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The Government's proposals also authorise the Government to contribute towards Income Tax and rates payable in respect of new industrial undertakings that are approved by the Commissioners. I shall watch with great interest how that is carried out. I hope the same will not happen as has happened in everything else that the Government have proposed for the Special Areas—that we shall be disappointed. There is then the proposal to contribute towards the expenses of certain street works and works of field drainage. In addition to those provisions, the Government propose to set up a Royal Commission and three Advisory Committees. One of those Committees is to advise the Minister concerning those areas that are to be made Special Areas and another Committee will work in close collaboration with the Board of the Special Areas Reconstruction Association and the Trustees of Lord Nuffield's Trust.
The Minister has appointed a third body, an executive board of three members, to be known as the South West Durham Improvement Association. That Board has to work in conjunction with the Local Development Council, the North Eastern Trading Estates Company, and the North Eastern Housing Association, and the necessary finance is to be found by the Commissioner. I do not object to that, for the idea of appointing that executive board is a good one, but when I look to see what are its powers, I am disappointed. The duties of this executive board will be to investigate the economic possibilities of the area, to undertake a certain amount of site clearance by the removal of derelict buildings, and so on. They will also give special consideration to the problem created by the system of small and relatively isolated villages.
Those are the duties of the executive Board, and if they perform those duties, where shall we be? It looks as though the Minister were simply having a joke with the Special Areas. He says. "In South West Durham I will give you an executive board which will work in conjunction with some of the organisations in the district; it will have three members"; and then he says to the board, "You must not have too much power; all you can do is to investigate the economic possibilities of the area." But the Government claim that they have been doing that, through the Commissioners,

2515
for the last three years. The Minister now says that this board will do precisely what has been done for the last three years.
Seriously, if the Minister of Labour is going to do anything for the Special Areas, let him get a move on; let him do something real and not do so much window-dressing. An important gentleman went to South Wales, and his heart was touched by the Special Areas. He said to the people of South Wales, "Something will be done." The White Paper of the Government seems to say to that gentleman, "No, you are mistaken; something will not be done for the Special Areas." That was a promise not to South Wales alone, but to all the Special Areas. It raised the expectations of men who had been unemployed for long years, and of women who had been suffering from poverty-stricken conditions, that something would be done for the Special Areas. The Government now bring forward a White Paper and a Money Resolution on which they will base the Bill, and in 12 months' time we shall be in no better position than we are now.
2.53 P.m.
Mr. Mathers: Many varieties of accent have been heard in this Debate to-day, and I am going to add still another variety, the Scottish. During the Debate, there has been a general indication that there is a very widespread opinion in the House, not only on the Opposition benches, but also among hon. Members who support the Government, that the proposals in this Money Resolution are inadequate for the purpose for which they are intended. Even if they had been very much more generous, I think they would still have been inadequate, for the problem with which we are seeking to deal is one that is not merely of a temporary or limited character, but, as I heartily agree with my hon. Friend the Member for Farnworth (Mr. Rowson), is a huge problem of changing economic circumstances.
There is a definite cleavage between the two sides of the House as to the way in which that problem should be tackled. Hon. Members on the Government side, standing for methods, inadequate as we claim, such as those in the Money Resolution, are endeavouring to patch a system which it is obviously impossible per-
2516
manently to make function, whereas on this side of the House we stand for a fundamental economic change which will go very much further and will finally solve this problem. For example, although the Government are prepared to make the proposals contained in the White Paper, they will not tackle the problem of the limitation of hours of labour. The problem of the Special Areas is so huge that it cannot be dealt with by these inadequate means. In saying that the problem is much more huge than is indicated by this Money Resolution, I would point to a concrete fact with regard to my own constituency. At the present time there are working in the shale-mining industry, which is the principal industry in my constituency, 4,500 men. They are working three weeks, and are idle one week. That is the way in which the work is shared. Previously that industry carried 12,000 men working full time. To-day these 4,500 men, thanks to rationalisation, unification and mechanisation, are producing as much as was produced by the 12,000 men in years gone by. The proposition made here is inadequate, indeed inappropriate to meet the problem as far as my constituency is concerned.
I do not think the possibility of the establishment of new factories is likely to be realised in the northern part of the county of Linlithgow which, as I have explained to the House on a previous occasion, was excluded in 1934 from the provisions of the Special Areas Act. I regret more than I can say that the areas then fixed are to remain unaltered. We need more help for what may be described as ordinary development by local authorities and I acknowledge that in the part of the county which was scheduled as a Special Area, such development has taken place. The county council and the district councils have been able to go in for schemes of development in regard to such matters as drainage and water supply. My constituents in the northern part of the County had also looked forward to the possibility of developments of that kind and it is a matter of the keenest regret to them that they are to be debarred from the opportunities, which have been available to other areas since 1934 and have been used to the full in such developments as those I have just indicated.
I wish to ask the Minister two questions bearing on the same point. First, what

2517
were the considerations which prevailed in 1934 which caused certain areas to he scheduled as Special Areas, while others were not so scheduled? I have given an indication of how this has worked in the case of my own county. We find it divided in the middle by the line which is drawn in the Schedule to the 1934 Act between the Special Areas and other areas. My second question is, what is the consideration which has caused that delimitation to be adhered to, without alteration, in the proposals now before us? That is a question which requires an answer and which is disturbing my constituents very much.
I know that various explanations have been offered. I go practically every week-end to my home in Leith. The right hon. Gentleman the Minister is my Member of Parliament, and in Leith I find there is a questioning suggestion that perhaps it would not have done to have scheduled as Special Areas the places which are most heavily hit by unemployrnent. If that had been done, the suggestion is that Leith, taken by itself would have had to be included in the list, because only one thing prevents Leith from showing up as a seriously distressed area with a huge volume of unemployment, which has not diminished but actually shows in the last return an increase of a few hundreds. If it were not for the fact that Leith is included in Greater Edinburgh, and that the figures are taken for Edinburgh and Leith as a whole, Leith would show up very badly in respect of unemployment. I do not suggest that the right hon. Gentleman is trying to protect himself from the criticism that might be levelled against him of not being able, as Minister of Labour, to do great things even for his own constituency. But I think he would answer a question which is of concern to my constituents and to his own, if he told us why the Special Areas, as originally defined, remain in the Bill without alteration.
May I give examples of the sort of works which the local authorities in the northern part of my constituency have in mind if given the special facilities accorded under the Special Areas Act? There is a large tract of slob land just outside the town of Bo'ness, a large area forming a bay when the tide comes in and near by is a huge refuse bing from a colliery. Having in mind the provision for new works in and about the town, a
2518
number of years ago the town council bought that slob land which is, as I say, under water when the high tide comes in. What they had in mind was to get the material from the refuse bing to which I refer, put it into the bay and reclaim all those hundreds of acres of land which would be available. That scheme would remove an unsightly and to some extent unhealthy feature from Bo'ness and enable a great deal of land to be obtained for development purposes.
Then in Queensferry, over a year ago, a vote of the inhabitants was taken to decide whether the town council should undertake the construction of a swimming bath. The project was turned down by the inhabitants, principally because of the fear that it would add unduly to the rates of that small town with its small rateable value. But it was felt that if they had been able to obtain the advantages offered in the Special Areas Act, they might have been able to go on with that project. There is also a proposal for running a much-needed new foreshore road between Bo'ness and Queensferry, but it is felt that it will not be possible to give this scheme the consideration which it deserves because of the fact that the area is excluded from the Special Areas. In the county town of Linlithgow itself which at the moment, seeing the reestablishment of a munitions factory, it is felt that when the activities of that factory are over, the town will be back to an even more serious state of affairs than it has experienced in the last few years. The people there, too, are exceedingly anxious that the northern part of the town and county, as well as the southern part, should have the advantages of the Special Areas provisions. That has been denied them, however, and they are not looking forward with great eagerness to the cessation of activities which will come when the armaments rush is over and there is grave possibility of that munition factory which is not under Government control, being closed down.
I have given these examples as an indication of what can be done in individual constituencies. I value the contribution which was made last Friday by my hon. Friend the Member for Stirling and Falkirk (Mr. Westwood), who dealt in a broad way, and sketched with a bigger brush than I am doing, with the whole of Scotland and claimed that there was need for all Scotland to be considered in these

2519
Measures. To-day I have, like many other Members, looked more closely at my own constituency. So far as I can see, the Bill that will follow the passing of this Resolution will not make any appreciable mark on the problem that is facing us. It will be necessary before that problem can be successfully tackled under the present system for the Government, which is an upholder of the present system, to be much more courageous than they have been up to the present.
3.7 P.m.
The Minister of Labour (Mr. Ernest Brown): Hon. Members who have listened to this Debate will recognise in it an entirely different note, a note which has been undiscovered in any Special Areas Debate since the issue was first raised; indeed, a note more hopeful than that of any Debate on the areas of heavy unemployment since the great slump of 1920. Indeed one Member opposite complained that it had been a one-way discussion. That has been my complaint ever since I have been Minister of Labour, but, happily for me, instead of the discussion to-day taking the shape of discouragement, denunciation, exhortation and disappointment, it has, until the last three speeches, been a general realisation that much has been done and that there are far greater possibilities inside the terms of the Financial Resolution than was at first realised by many of those who looked hastily at the White Paper. An hon. Member opposite shakes his head, but he has not had the advantage, as I have had, of hearing the whole discussion. If he will look at it to-morrow, he will find that my impression is not inaccurate. At any rate, from my point of view, the debate has shown a welcome change.
When hour after hour the Minister of Labour sits through a Debate dealing with a grave and tragic problem like this, and when he hears one speech after another couched in passionate terms and animated by deep feeling, he knows that the emotional strength of the speakers must be great, but it is not always realised what is the emotional strength of the Minister who has to listen to a succession of them. That is why I have noted with pleasure the complete change of atmosphere in the Debate to-day, and I am grateful to my hon. Friends and one or two Members opposite who have been good enough to recognise that a good deal
2520
of hard work has been done and that results have shown themselves. It is remarkable that there is scarcely anything about the Resolution for the Minister to reply to. Most of the Debate has not been about what is in the Resolution, but what is not and what ought to be, and vague general denunciations of a destructive character like those of the hon. Member for Spennymoor (Mr. Batey). I will say a paternal word to the hon Member for Spennymoor before I have done because he may perhaps be able to help me in South West Durham if he will pay a little constructive attention to the machinery we are setting up when the House passes this Resolution, and to the Bill that will follow it. If instead of expressing disappointment with everything that has been done, and taking selected parts of speeches and quoting them while ignoring others—I may as well say my fraternal word to him now—he had taken the trouble to read the original speech of the Chancellor of the Exchequer—
Mr. Batey: I have it in my pocket.
Mr. Brown: Then I suggest that the hon. Member should read it again, and he will learn from it that it has been clear from the beginning that the activity he wants in the shape of public works was not to be a part of the duty of the Commissioner. More than that, if he will read the first report of the late Commissioner he will find that over the wide field of relief works he did not express an opinion in favour of them.
Mr. Batey: I have not been talking about relief works. I want the old industries revived, and with Government money.
Mr. Brown: That is not quite the point with which the hon. Member was dealing in the early part of his speech. I am pointing out that it does not lie with any hon. Member to level against the Government charges of breach of faith, because it has been clear from the beginning that that was not to be one of the functions of the Commissioner. One or two hon. Members, especially the hon. Member for Rother Valley (Mr. E. Dunn), who made a forceful speech, dealt with the references to field drainage in the White Paper and in the Financial Resolution. There is a little misunderstanding there, because neither I nor the

2521
Commissioner deal with the general question of land drainage in the country. The land drainage problem comes under the Minister of Agriculture, who is responsible to Parliament for the operations of the catchment boards, and a great deal has been and is being done. It would be out of order to discuss the general drainage issue now. Hon. Members will have an opportunity to do it early next week. But as to land drainage in the Special Areas there seems to be a misunderstanding. The Commissioner has power at present to assist draining if that is done by local authorities other than catchment boards inside the Special Areas.
Mr. Dunn: What about the position outside those areas?
Mr. Brown: I am dealing with the position in the Special Areas, and would point out that the Commissioner has offered grants to certain county councils. Seven schemes have been discussed in Durham, and an agreement has recently been reached with the county council as to the basis of the grants. Work should begin as soon as the county council have completed arrangements with the owners of the adjoining land. Glamorganshire has proposed two schemes, and my latest information is that they are under consideration in consultation with the county council, but at the moment no decision has been come to. I should like the hon. Member to understand that the Commissioner has power, and the funds will follow, to assist land drainage proposals inside the Special Areas, but the point which has arisen now inside the Special Areas concerns what he can do, not in such cases but in cases where it is necessary to aid private persons to effect improvements.
Such cases have arisen in Cumberland. There are differences between the Scottish and the English law and things have been possible on one side of the Border which are not possible on the other. It is to remedy that state of affairs that the item for field drainage is in the Financial Resolution, and the funds will follow when the Bill becomes law. The wider problem of land drainage outside the Special Areas is not, I repeat, one for which either I or the Commissioner is responsible, and questions about that must be addressed to the Ministry of Agriculture. Normally the operations of
2522
catchment boards provide the method of promoting land drainage.
I was asked by the hon. Member for Consett (Mr. David Adams) the only other definite point about the Financial Resolution. He asked what was the relationship between the local authorities and the suggested site companies. The answer is that the site companies will have to work in close contact not only with the industrial areas in which they may be preparing and securing sites, but with the industrialists whom they hope to attract to those sites. The local authorities have not, in most cases, the necessary powers under the law, nor have they normally the necessary industrial experience. The new site companies will generally have to work over larger areas than those of individual local authorities. This answer covers the point made by the hon. Member for Farnworth (Mr. Rowson) who, after he had finished his general expressions of disappointment at the scope of the Measure, was inquisitive enough to try to understand what might happen in his own area. Let me tell him, to begin with, that he misunderstood the sum mentioned by Sir Thomas Barlow in connection with Lancashire. Sir Thomas Barlow was not referring to the £500,000 as any part of the £2,000,000 loan, but as the sum necessary for a scheme which I understood, is under discussion in Lancashire for the securing and preparation of sites. It is an entirely different matter.
Whatever sum of that kind is arranged for the operation of approved or certified site companies, is not the proposal of 25 per cent. This is also, of course, the answer to the hon. Member for Spennymoor.
Another remarkable thing in the Debate is that the hon. Member for Spennymoor was the only one during the whole day to use the entirely fallacious comparison between £1,500,000,000 to be spent on armaments and the £2,000,000 for the Special Areas. We need not seek to compare the expenditure of the vast sum for Defence and that for the Special Areas, because, as a matter of fact, millions of that money will be, and are being, spent in the Special Areas. The basis of the comparison does not exist.
Mr. Batey: That is not what I was suggesting. The Government propose to

2523
raise a loan of £400,000,000 for armaments, and I said: "Give us £100,000,000 of that."
Mr. Brown: The hon. Member for Spennymoor never likes his own points to be raised; when that is done he always raises others. I am raising the point which he made in the Debate. What he said will be within the recollection of hon. Members who heard his speech and he will appear in the OFFICIAL REPORT to-morrow as the only hon. Member in the Debate who made a false comparison between the £1,500,000,000 on the one hand and the £2,000,000 on the other. Let me deal with that comparison. As I have said, the comparison is invalid, because large sums of that £1,500,000,000 will go to those very Special Areas. This is not a Financial Resolution to provide backing merely for £2,000,000; this sum is not nearly half the financial operations adumbrated in the Financial Resolution. The £2,000,000 is a fixed sum for financial capital for the companies which are coming to these areas.
I cannot tell the House—nobody can—how much money is represented by this Financial Resolution. That will depend upon many things, and first of all upon how many site companies are formed. It will depend entirely upon how much capital is involved and the amount of the proportion of 75 per cent. spread over the whole field, both inside and outside the Special Areas. Moreover, I cannot tell how many new industries coming to the Special Areas will benefit by the unique and powerful relief of remission of rent, rates and taxes. These represent money, and for all I know, as the schemes work out they may represent large sums of money. No man who reads the Financial Resolution could ever out of that draw the fallacious comparison between £1,500,000,000 and £2,000,000. I know the hon. Member for Spennymoor to be a fair controversialist and I hope that when he is telling the tale the next time he will tell the tale both ways and tell it adequately. The hon. Member and I understand each other when we use words of one syllable like that.
The hon. Member for Consett asked a question as to what would be the position of local authorities. In many areas the bodies which will promote the initiative in these matters will be the local
2524
development councils, and, as hon. Members know, local authorities in most if not all areas where development councils have been set up have been very active in helping the work. For reasons which I have given the Government thought it best to proceed by way of giving assistance through these companies.
Mr. David Adams: Will money be forthcoming for expenditure through these companies?
Mr. Brown: That is so. We are dealing with this as a practical proposition. It was put to the Government quite clearly by those who have devoted many months of hard work to these development councils that if they could have adequate grants towards obtaining suitable factories and mills in Lancashire they thought they might induce other industries to come to their areas. What may happen in Lancashire may easily happen also in Yorkshire and other parts of the country where under the conditions laid down in the White Paper circumstances are such that they would be likely to be certified by the Ministry of Labour.
Mr. Dunn: Since, in view of figures which have been given, there are areas which are really worse than many of the areas certified, is it too much to ask that the whole of those areas should be certified as Special Areas because of the additional advantage they would get?
Mr. Brown: We are told that what we have done has brought no benefit and now we are asked to extend the advantages of the Act which was supposed to have brought no benefit to other areas. I think that is a valid point. Hon. Members must know that there have been great benefits through the Act. I would point out to the hon. Member for West Rhondda (Mr. John)—and in doing so I shall be answering the hon. Member for Linlithgow) (Mr. Mathers)—that the issue when the original Act was framed was a double one. We had first to try to find those areas which had been hardest hit and were the least likely to find recovery in terms of local conditions, and, secondly, to find those areas where there was less diversity of industry than elsewhere. That was where the line was drawn. I would like to take my own constituency as an example. It is useless to discuss Leith as if it were not part of the City of Edinburgh. More than 15

2525
years ago the House decided to make Leith a part of the City of Edinburgh, and therefore Leith rates are Edinburgh rates, and the whole city has to bear the burden whatever it may be.
It is a very different thing in some areas in South Wales, in Cumberland, and in other parts of Scotland, where one industry, the coal industry, is operating. I do not say that, if there had been a wide examination of some parts of Yorkshire in the early days, that might not have been so, because I agree with the hon. Member for the Rother Valley that parts of the coal area of Yorkshire are as hard hit as most of the Special Areas. Since the Act has been in operation, one thing after another has been discussed. The hon. Member for Wallsend (Miss Ward) was good enough to compliment me by saying that she thought, after watching my work for two years, that I was willing to listen to what people said in this House. That is true. I have what I call my balance sheet, which shows on the one side an analysis of every speech made on this subject, from whatever part of the House, that contained even the germ of a constructive suggestion, and on the other side a record—a growing record now—of what has been done or is in process of being done. One of these days, perhaps, when I get my estimates, I may be able to bring it out, and the House, perhaps, will have a revelation.
Mr. Batey: Which side am I on?
Mr. Brown: Apart from the general political issues such as pensions for everyone at 60, and matters of that kind, the balance is heavily on the side of credit for the Government, and all those who are watching the results of the Government's general policy and of the working of the Special Areas Act will understand that that is so. This is in terms of practical and constructive suggestions, and not merely platform politics. At the beginning there was a good deal of discussion about boundaries—I was not Minister of Labour then—and, after striking off one suggestion after another, either because it had been accomplished or because there were sound reasons why it should not be undertaken, we came to the conclusion that, after all, the best hope for these areas, which were so heavily hit because there was little diversity of industry in them, would be to make a
2526
fresh effort to induce new industries to to go to those areas, and that is why I am moving this Financial Resolution and why we shall ask the House to pass the Bill.
After all, these suggestions are unique, and, moreover, they are likely to be so powerful that already some Members of the House, representing areas which are not Special Areas, are beginning to wonder whether we have not weighted the balance too far, and whether competition will be wholly fair between industries in their areas and industries which may go to the other areas. That is the other side of the question. We have to see whether we can satisfy the general desire of the whole country to do something effective to break up the monopoly of single industries in these heavily hit areas, by trying to produce a magnet which will bring to them new industries, and will obviate the forecasted slump that may come afterwards. I do not assent to that forecast; I do not know; but I do know that, whereas the Commissioner suggested that we ought to give remissions of rates and taxes, the Government have gone further and have included what in my judgment is the most potent inducement of all, namely, rent.
I will give the hon. Member for Spennymoor a hint of what he ought to say to the executive board of South West Durham when it is set up. Has he noticed in the White Paper and the Financial Resolution that the Commissioner has complete discretion about this matter? He can decide what remission of rent he will give. He can even go so far as to say in certain cases that the rent shall be free for five years. That was done because we have had regard to the problem that he put. I am sorry that the hon. Member belittled the trading estates. In my judgment they are great new experiments, well worth making, and they will be very profitable to these areas in years to come. The Commissioner might say—I will not mention any town, though I have three or four in mind—"This is an industry which would suit that town very well. If you go there, I will give you the maximum." [Interruption.] I will only say "If." The hon. Member might apply himself to the White Paper and, if he does, he will find that the Government are trying in this Resolution to do what the Commissioner recommended, providing a magnet to draw new industries to these areas.

2527
We believe we have provided such a magnet as will help to tilt the balance and I hope everyone will do his best to make it work as it was designed to do.
3.32 p.m.
Miss Wilkinson: I congratulate the Minister on quite the best piece of salesmanship that I have ever heard in the House. I think he would induce me to buy anything and, by the time he had finished, I should not be critical about the vacuum cleaner or whatever it was that he induced me to buy. But the difficulty that we have who come from these areas is that we have had two years' experience of the vacuum cleaner that he has sold us. The Government have had this problem since 1931, and we have had a series of the most admirable sales by the Minister but what we have not got is work. I have listened to more than half his speech and even now what he has said is promises, assurances, and ifs, ifs, ifs, with a final invitation to the hon. Member for Spennymoor (Mr. Batey) to join the queue outside his office door. He said in his closing words that he trusted the two trading estates would be valuable in years to come. That is the difficulty that we have with the Minister of Labour. It is always something going to happen in years to come. We have had this depression for years past. There is only one criterion by which to judge the Government's proposals, and that is how many people have, in fact, been put to work.
The one thing on which they can show any real diminution in unemployment is the transfer scheme, and that is the one side that is going to create more problems for the future. It is not only draining the young men out of the areas and leaving the older people behind, but the right hon. Gentleman never seems to realise the problem that will be created when the re-armament boom really starts. When the Government start spending this £1,500,000 we are to have a whole string of potential Jarrows round London, and we are to have these young people torn tip by the roots till the armament work Stops. The characteristic of these orders is that they tend to stop all at one time. It is not a gradual slowing up of the industrial machine. These people will be left there without even the advantages of the unemployed in the present Special Areas.
2528
There is only one thing which the Minister has definitely refused either to answer or to make any definite statement upon. What powers are the Government going to take in this matter? The Government have this sugar spread in sight of the industrial birds. But the Government themselves do not set the example. The Minister for the Co-ordination of Defence is nothing like as good a salesman as the Minister of Labour. He does it in a blunt sort of way. He puts the blunt facts and says, "That's that". He tried to give a sort of picture or list of the new armament factories that the Government know are not, in fact, being created in the Special Areas. I want to make a distinction here. I am not talking about Government work given to existing yards. I admit that the Government orders which have been given to existing yards on Tyneside and similar places are quite impressive, but I am talking about new factories. The fact is that the Government are not leading the way in putting new factories into these areas, but are following the trend of putting them more in the South Eastern area. I do not challenge the position at the moment, because the process is going on, but up to date, if you take the list which the Minister for the Co-ordination of Defence gave of new factories, they are not to any appreciable extent going into the distressed areas. Obviously, if the Government themselves are not going to lead the way, and are not going to proclaim their faith in the Special Areas, how on earth do they expect to persuade the manufacturers to do so?
The Government have consistently refused to consider any question of compulsion. It is not either fair or sensible for anybody on this side to blame the Government for not being a Socialist Government; they were not elected on that basis. But I do blame them for not using the powers which they could so easily take on this question. We are not the people who beat the national drum, Heaven knows, and regard every foreigner as an outsider, but at least there is this fact, that 219 factories, according to an answer given in the House, have been established, mainly in the South Eastern area, by foreign firms, every one of which has had to have some kind of licence from the Ministry of Labour. They are getting favours in the way of licences from the Ministry of Labour, if they want to bring

2529
in foreign staff or experts, and they get all the favours provided in this country by our ordinary social services, roads and all the rest of it.
Is it really such a revolutionary proposal to ask the Government, who hold their position largely because they have made such passionate appeals for things to be made in this country instead of being made abroad—is it asking for more than an extension of their own propaganda that the Minister of Labour should take power—he would have an almost unanimous vote in the House and would get the Measure through in a day—to say that no licence should be issued for any more of these factories to be put in this area, but that those who come to this country must go to the Special Areas? Two hundred and nineteen factories could have been put in the Special Areas if the Government had been willing to make that small condition. I cannot see why the Government should have so steadily refused to take that simple and sensible step. I do not say it would have solved the whole problem.
The President of the Board of Trade has said that we are anxious to have factories in this country, and it is necessary to attract them. I have had some experience of the way in which people who are going to establish these factories implore Members of Parliament to use their influence with the Minister to get the permits they need for their foreign experts. The Government have a hold on these people, and it is not being unreasonable if they say to foreign firms "You must put your factory in a Special Area as a condition of your licence." If they would do that now it would mean that the new factories would go into those areas. This vast new factory area growing round London, and tearing up some of the loveliest country we have, is creating big problems. One of the experts of the Ministry of Health points out that these factories outside the London County Council area, in Essex and Surrey, have meant the rushing up of cheap, jerrybuilt housing estates with the scantiest attention to sanitation and water supply. This has meant, particularly in Essex, that the drainage from these estates is soaking into the sources of the London water supply, and it is being asked that something should be done about this problem. What is the sense of allowing
2530
the London area to be saturated beyond all reason?
I never knew in my life a Government that had less plain courage about anything. Whoever says "boo" to this Government, whether it is Mussolini in Abyssinia, or the latest little man who wants to set up a clothing factory in London, gets his way. Is there not one in this Government who has any courage to do anything? All the Government say is "Perhaps we can bribe you to come; we will pay your rent, 25 per cent. of your capital. We will pay this and that." With the hardheaded business men with whom they have to deal, what is the natural reaction? It is that there must be something wrong with these areas or the Government would not pay them to go there. We have listened to these sales' talks by the Minister of Labour. We admit that he is trying to do his best. He is the most approachable of Ministers, and he really does try. I do not want to sound as though I am scolding him, because I have often felt that we ought to have an extra prayer in this House to give help and succour, and some courage, to the Minister of Labour. I would ask him to remember the importance of speed in this matter. These trading estates will take a long time to develop. It may be that they will be ready for the next depression but one, but we are concerned with the present depression, and if the Government will really take some compulsory powers, they will be able to do something in the quickest way, and get a move on. Again congratulating the Minister of Labour on what he has done, I would express the hope that he will do more, and will add my suggestions to the credit side.
3.46 p.m.
Mr. Whiteley: I had expected that the right hon. Gentleman would have dealt with the point raised in regard to the trading estate in the Team Valley. The White Paper states that up to the moment there have been 166 inquiries for accommodation, including definite orders for 18 factories. We should like to know exactly what is meant by the words, "definite orders for 18 factories." The people in that area are looking with great expectation to see what is going to develop in this trading estate, and what prospects there are for the people

2531
not only in that area but throughout the county of Durham. The trading estate is too far removed from South-West Durham to do that area any good. If there have been definite arrangements made for 18 factories we ought to know what possibilities there are that those 18 factories will be developed on the right lines, what kind of industries are to be set up and how many people they are likely to employ.
The Special Areas are not attractive to industry. Although we may hold out all these inducements, when an industrial firm has made up its mind to establish a factory it looks round to see what is the purchasing power of the area. It is the purchasing power of the area that generally determines whether they put their industry in that particular place. The right hon. Gentleman knows as well as I do that in the Special Areas, and more particularly in the mining areas, the purchasing power has now diminished until it is now at a very low point. The Government are responsible for that low purchasing power. They have confiscated—I use the word very definitely—the income and savings in the homes of our people and depleted their resources to such an extent that those areas cannot possibly revive until there is some attention paid to that matter. I may be out of order in dealing with this question on the problem of the Special Areas, but if the Government had dealt with the people of this country as they ought to have done by removing some of the obnoxious parts of the means test, there would have been an opportunity for a greater purchasing power in those areas.
Mr. Speaker: I think the hon. Member is out of order in dealing with that question now.
Mr. Whiteley: I did not intend to deal with the means test; I was trying to convey to the Government that the purchasing power of the people has been so depleted in the Special Areas that they present no attraction to industry. We are told that we must have a strong magnet to attract industry to these areas. I should like to hear what kind of magnet the Government are endeavouring to manufacture. In the north east coast, as in South Wales and other areas, we have had development boards, advisory com-
2532
mittees, housing committees set up, but all these things up to the moment have failed to bring the desired effect, and although there may be some good in this Money Resolution, and additional benefits may come from the Bill, I am confident that the Government must do something to improve the purchasing power of the people in these areas. The Government should be prepared to plan and organise, particularly with regard to the direction of industry. I do not see the need for the committee which has been set up to consider this matter, as I think the Government have sufficient knowledge already to organise the country and direct industry, without doing any injury to any other parts of the country, so that a reasonable proportion of new industry is attracted to the Special Areas.
Transference is going to be no cure for this problem. In Durham we have been so depleted by transference that our problem has become greater. There are still sufficient brains in this country and still sufficient ability, if directed along the right channels, to deal effectively with this problem op a basis which will relieve the distressed areas and give greater security to our people that they will not have to depend on charitable organisations here and there. If there is a real effort to plan and organise industry on the right lines it will give an opportunity to our people to find employment and render service to the nation, which in turn will create a greater purchasing power on the part of all concerned.
Question, "That this House doth agree with the Committee in the said Resoluion," put, and agreed to.
Bill ordered to be brought in upon the said Resolution by Mr. Ernest Brown, the Chancellor of the Exchequer, Mr. Elliot, Mr. Runciman, the Attorney-General and Lieut.-Colonel Muirhead.

SPECIAL AREAS [MONEY].

  SPECIAL AREAS (AMENDMENT) BILL,
  "to continue until the Thirty-first day of March, Nineteen hundred and thirty-nine the Special Areas (Development and Improvement) Act, 1934, and to enable further assistance to be given to the areas specified in the First Schedule to that Act, and to certain other areas,"
  presented accordingly and read the First time; to be read a Second time upon Monday next, and to he printed. [Bill 103.]

IMPORT DUTIES (IMPORT DUTIES ACT, 1932).
3.55 P.m.
The Parliamentary Secretary to the Board of Trade (Dr. Burgin): I beg to move,
"That the Additional Import Duties (No. 4) Order, 1937, dated the third day of March, nineteen hundred and thirty-seven, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said third day of March, nineteen hundred and thirty-seven, be approved."
This Order imposes a minimum specific duty of 2s. 6d. a dozen on umbrella handles and parts as an alternative to the present duty of 20 per cent. to which they are liable. It also imposes a duty of 33⅓ per cent. on all metal parts and fittings for umbrellas. Prior to this Order, only one form of ribs of umbrellas were regarded as wire, and were subject to a duty of 33⅓ per cent., and now all types of ribs are to be subject to the same rate of duty. The cheap foreign metal, celluloid and wooden parts come from Austria, France, Italy, Japan, Germany and America. The existing level of duties is adequate in the case of complete umbrellas, but there are difficulties about cheap goods coming in from abroad in the form of parts, and the home trade in the making of umbrellas will suffer if the cheap parts are allowed to come in.
3.57 p.m.
Mr. A. V. Alexander: I think it would be unreasonable for the House to be asked to take a decision on this Order after such a short opportunity for Debate as now remains. We are being asked to vote on the principle of a heavy increase in the duties on the imported component parts of an article the manufacture of which is an important industry. It is clear from the White Paper which the Parliamentary Secretary has presented that if the increase which is now recommended were imposed, it would be considerably to the detriment of employment in at least that part of the industry which manufactures the completed umbrellas. The Report reads:
"The manufacture of complete umbrellas is carried on in this country by a large number of firms, and the high degree of competition which exists, together with the trend of popular demand of late years towards a cheaper article, has driven some of the manufacturers to look to the cheapest possible
2534
source of supply for their parts, irrespective of origin. The existing level of duties, whilst adequate in the case of complete umbrellas, has failed to meet the position of the manufacturers of handles and such metal parts as ribs, frames and other fittings."
Therefore, it is clear that, in order to meet the needs of the working classes of this country, whose purchasing power has been so much depleted, as was said by the hon. Member for Blaydon (Mr. Whiteley) when he spoke on the Financial Resolution for the Special Areas, the industry had to provide, if not a cheaper article, at least one that was not increased in price, and to do that, it was necessary to go to the markets of the world for the cheapest component parts that could be obtained.
As soon as that happens apparently without having regard to the employment provided in the manufacture of the completed article, and having regard only to the employment in and profits—which are never revealed in the applications made to the Import Duties Advisory Committee—of the industry which asks for protection, we are asked to increase the duty. It would be wrong for us to agree such a duty to-day without having far more opportunity than we have of going into the implications of the proposal in all their aspects, and of considering how it would affect the workers in each branch of the industry concerned, how it would affect the price of the completed article when it is put on the market, and all the other relevant matters which arise from the imposition of such a duty. Generally speaking, when duties of this kind are proposed, I cannot hide from myself the fact—
It being Four of the Clock, the Debate stood adjourned
Debate to be resumed upon Monday next.
The remaining Orders were read, and postponed.
Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 2.
Adjourned at One Minute after Four o'Clock until Monday next, 22nd March.