HC Deb 15 November 1937 vol 329 cc166-74

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. James Stuart.]

11.3 p.m.

Mr. Lawson

A few days ago I drew the attention of the President of the Board of Trade to the nature of the evidence given by the Department before what is known shortly as the Royal Commission on the Location of Industry, and I drew his attention to the fact that that evidence was definitely weighted against any interference with the present system and in the direction of maintaining things as, they are. I gathered from the right hon. Gentleman's answer, which I need not read, that he did not question that interpretation of the evidence given, but he did say that the evidence simply related to the economic aspects of the problem as distinct from the social, and that strategic considerations were the direct concern of other Departments.

The outstanding fact is that the Board of Trade got in first with its evidence and threw its weight as though it were speaking for the whole of the Government, against any interference with the present state of things. This is a subject which has arrested the attention of the country, and the general concentration of industries in certain areas has really been alarming certain quarters. I must confess that the evidence of the Board of Trade, when I read summaries of it in various newspapers, had upon me the effect of a cold douche, and I think that was the effect upon most people. Indeed the "Times," in a leading article, gave expression to this remarkable statement, coming from a newspaper which as a rule is fairly friendly to the Government. It wrote: It is profoundly to be hoped that the Board of Trade was speaking for itself alone, and not representing the attitude of the Government, in the evidence which it gave on Wednesday to the Royal Commission on the Geographical Distribution of the Industrial Population. The evidence has been read with astonishment and uneasiness. In a mid-Victorian voice the Board propounded the policy of do-nothing which is not only outmoded but is utterly unsuited to the present day. As the country got the impression, so it seems that the commission will get the impression that this is the point of view of the Government. I know that the right hon. Gentleman has said that other Departments are to give evidence on the social and strategic side, but I want to ask which Departments are to give that evidence? Are they to give it for themselves alone, just as his Department has given it? For instance, probably the Air Ministry will be called in on the strategic side. We have had some evidence of what the Air Ministry does in these matters. When a shadow factory had to be established, it was put at White Waltham, and we were told that it was put there because it was invulnerable. When the attention of the Prime Minister and the Cabinet was drawn to the matter, the shadow factory was put in Lancashire, because there it was invulnerable. It may be that the Ministry of Labour will give evidence. The Ministry of Labour will give the facts about the unemployed, but past experience demonstrates clearly that it will do nothing except give the simple facts.

To all intents and purposes the only Department which will give a definite opinion and guidance to the Commission as to the opinion of the Government is the right hon. Gentleman's Department. The House may like to be reminded of the nature of the evidence given by the Board of Trade. It said: It could probably be assumed that in general the present distribution of the industries of the country approximated very closely to the distribution which enabled each industry to operate most economically and efficiently, and there was, therefore, reason to suppose that the distribution was well adapted to serve the economic interests of the country as a whole. Any action, therefore, which might tend to impose on the British manufacturer disadvantages not shared by his competitor abroad, whether by increasing his costs or by preventing him from carrying on his work in the most effective manner, might have a serious effect upon our export trade and thus upon the whole economy of the country. I submit that that is a message to the Royal Commission that, in the opinion of the Government, any interference with the present system would be a mistake, and that the very Government which set up the commission has torpedoed the commission at the beginning. I admire the sublime faith of the Board of Trade in its evidence on economic lines. One of the most hard-headed men in industry, according to statements made in this House when he was appointed to take charge of the Special Areas, Sir Malcolm Stewart, questions very much the economic evidence given by the Board of Trade. He says: Much of the growth of greater London is not based on strictly economic factors, psychology plays an important part in the matter. There is a considerable portion of industrial production not dependent on considerations which are absolutely essential to its location in London. Again, he pointed out that the supply of workers in the London and Birmingham areas was an economic matter of importance; and in his third report, on page 169. he says: It may be said that, however good it may be as a temporary alleviation of unemployment, the transfer of workers and particularly of juveniles, to London, their training, allowances and after-care form, in effect, a subsidy to London industry borne very largely by the rest of the country. How the right hon. Gentleman came to the conclusions that he did in his economic evidence on purely economic grounds passes my understanding and those conclusions are accepted by many economists and business men.

There was a critic in a Conservative Conference at Newcastle this week-end who spoke of getting rid of the Methuselahs in the Conservative party. I suggest that there certainly are Methuselahs in the Board of Trade and that the right hon. Gentleman has rendered a very ill service, not merely to the Special Areas but to the best interests of this country, as far as this Commission is concerned.

11.13 p.m.

Mr. W. Joseph Stewart

The House is greatly indebted to the hon. Member for Chester-le-Street (Mr. Lawson) for raising this most important question. The location of industry is a matter of the first importance to the Special Areas and must be kept well to the fore. Some of us who are domiciled in the Special Areas thought, when this Royal Commission was appointed to deal with the question of the location of industry, that every Government Department concerned would help the Commission with a view to spreading out the industries of the country so as to give the employment to the largest possible number of our unemployed in the Special Areas. Lately many of us have been concerned at the concentration of industry in a given area. In 1935 230 new factories were established in Greater London, giving employment to 19,650 people. In 1936 261 new factories were started giving employment to 20,050 people. In two years 39,700 persons were found employment in the Greater London area. In the north-east part of England, taking in Durham, Northumberland, and the North Riding of Yorkshire, in 1935, we had five new factories started, giving employment to about 2,450 persons, and in 1936, 16 new factories, giving employment to 4,600 people, a total of 7,050 persons in the north-east part of England.

I have some figures here which to me are very disquieting. Between 1932 and 1936, nearly 2,700 new factories were opened. Two-fifths of the employment thus provided was in the Greater London area, one-fifth in North-West England, one-sixth in the Midlands, and one-eighth in North-East England, and we feel, as some who are interested in the Special Areas, that something more should be done than has been done by the Government to deal with the question of the location of industry. The course which has been adopted by the Government, in my opinion, has been absolutely wrong. I represent a constituency in Durham, and a few days ago I asked the Minister of Labour a question regarding the transfers which had taken place in Durham for the 4½ years from 1932 to the first six months of 1937, and owing to the fact that the Government have not dealt with the question of the location of industry as they ought to have done, the figures of transfers from Durham County have become very alarming indeed. For the 42 years we had transferred out of the county: men, 17,745; women, 7,224; boys, 5,800; girls, 5,618; total, 36,387 persons; which, to me, is wrong in principle. What the Government ought to do, instead of transferring the best of its people out of the county, is to deal seriously with the question of the location of industry and to see whether they cannot do something worth while in areas which are not in a position to help themselves.

I want to quote one or two other figures before concluding. In 1936 in Durham county we paid in Poor Law relief£1,128,000; in unemployment benefit,£839,000, and in transitional payment£2,581,000; a total in that area for those three services of no less than£4,550,000. Surely the Government cannot be satisfied with a condition prevailing in that county which determines that that huge amount should be paid in one year. With the hon. Member for Chester-le-Street, I would ask the President of the Board of Trade to help this Commission as far as possible in gaining the necessary information so that in the near future, when we get the report of that Commission, with the help of the Government we shall get something more done for Durham county than has been done for it in the last five or six years.

11.19 p.m.

The President of the Board of Trade (Mr. Oliver Stanley)

The House well knows the attitude of the hon. Member for Chester-le-Street (Mr. Lawson) on the subject of the depressed areas in general and on this topic in particular, and we all appreciate his sincere desire to do something to mitigate those distressing circumstances amidst which he has lived for so long and with which he is so closely associated. I would ask him to believe that that desire is shared in other quarters and not least in the Department over which I preside. I challenge any hon. Member to deny that whenever anybody has tried to induce some industry to go to a depressed area, or to make some complicated arrangement which has led to industries being set up in the depressed areas, the utmost assistance has been given by my Department. Hon. Members in whose areas factories have been set up or have contracts which are now under consideration will know how much of that is in fact due to my Department.

Now I wish to refer to the question which the hon. Member has raised, the evidence tendered on my behalf to the Royal Commission on the Location of Industry. We discuss this to-night under the difficulties which arise from the fact that although a lot of people have talked, and great newspapers, to which the hon. Member referred, have written, about the evidence which has been tendered, I suppose that I am the only person who in fact has read it. [Interruption.] Does the hon. Gentleman say he has read it?

Mr. Lawson

The evidence is not printed.

Mr. Stanley

That is what I was saying. Neither hon. Members have had an opportunity of reading it, nor have the newspapers which wrote about it. It will, as a matter of fact, be published early next week and with it will be published the oral evidence given by officers of my Department, together with questions and answers that were exchanged at the time.

Mr. Dalton

Will the cross-examination be issued too?

Mr. Stanley

Yes. It will be a verbatim report. When I said the oral evidence, the hon. Gentleman will appreciate that it is the evidence which was given by means of question and answer. That will be published at the same time as the written evidence. Probably the best answer will be to urge hon. Members to read the full evidence, both written and oral.

It will be well to-night to clear away one misunderstanding. Hon. Members speak as though this evidence could possibly be interpreted as a statement of Government policy. No one who has given any consideration to the matter thinks for a moment that that is so. This is departmental evidence given by a particular Department upon the aspect of the subject which concerned it. It is not even evidence tendered by Government Departments, concerted between them to deal with a wide issue. And the reason that is so is that it was in this form that the Royal Commission asked for it. When the hon. Member is in a position to read the evidence he will see the matter set out in the first paragraph. It says: The Royal Commission asked the Board of Trade for a comprehensive memorandum of evidence on matters with which the Board of Trade were concerned, and which, in the Board's view, are of importance and interest to the Commission, for the purpose of their inquiry. Then it goes on: Matters relating to the industrial population fall mainly to the Ministry of Labour to deal with, and the social and strategical aspects of the question are being dealt with by other Departments. Questions which fall within the scope of the Board of Trade are those relating to the economic aspects of the distribution of industries. The hon. Member for Houghton-le-Spring (Mr. W. Joseph Stewart), who spoke with great earnestness, said he wished that I had given evidence which tended to help the policy of redistribution of industry. I do not think that, whatever my own personal views may be as to the desirability of particular courses, it is my duty to give to the Royal Commission evidence which is intended to help a particular policy. It is to give to the Royal Commission evidence which, rightly or wrongly, I consider to be adequate, and it is for the Royal Commission, hearing evidence, some of which will no doubt counter it and which touches on every aspect of the matter, themselves to decide upon the policy which they recommend to the country and the Government. Any other course would have been destructive of the whole purpose of the Royal Commission. The whole purpose is that conflicting views can be heard, that statements made by one interest can be challenged by another and the truth elicited.

The hon. Member says that economists and business men disagree with the evidence which they will read next week. It is for the Royal Commission to ask for their views, for the Royal Commission to weigh those views, just as they have the evidence which I put before them; and it surely is better that they should then arrive at conclusions, after weighing conflicting views, rather than have one aspect of the case removed entirely from their attention. As a matter of fact, the one aspect which the hon. Member has quoted from the evidence, removed entirely from the whole context of everything that has gone before it, does really give a wrong view of the evidence put forward.

This evidence, of which he has quoted one paragraph, is a massive document, the greater part of which is devoted to an historical survey of the reasons why the older industries are to be found located in particular places. It then goes on to discuss the facts of the recent trend of the location of industry, and to try, by means of whatever figures are in the possession of the Board, to attribute some reason to the particular location of these new industries. In the last paragraph or two the evidence tries to arrive at some conclusion from that evidence, and the conclusion which is arrived at, not a very startling one, is that as far as there has been any conscious choice of location, and businesses have not gone to a spot from purely accidental causes, that choice has been determined almost exclusively by business motives, arid the site has been selected which appeared to offer the greatest balance of advantage to the particular enterprises. I think hon. Members will agree that if they are thinking on economic grounds, I admit used in the narrowest possible sense—because we are talking in narrow terms relating merely to one Department—that on those narrow economic grounds they themselves would not be objecting to the present location of and ustry—

Mr. Lawson

Will a copy be laid in the Library of the House?

Mr. Stanley

The hon. Member did not leave me much time on a very important subject, and I want to make this one point. Assuming, for instance, that the level of unemployment was equal all over the country, that Durham arid South Wales were in the same favourable position as regards unemployment as London, that there was no transfer of industry such as that to which the hon. Member referred, that there was no fall in rateable value, and no question of social services created at great expense becoming redundant, I do not believe that, on the narrow, purely economic question whether an industry is capable of producing more economically in London than anywhere else, hon. Members would quarrel with the present distribution of industry. I make that point because the arguments that they have used are really arguments of a social character, arguments appertaining to other Departments, arguments which the commission will have to weigh against the narrower economic arguments. In the concluding paragraph of our evidence we make it perfectly plain that that is the way in which we are looking at the matter. We say: It will be appreciated that the observations in paragraphs 117–12o relate only to the economic disadvantages that may arise from attempts to regulate the location of industry, and to the economic dangers which must be avoided if, after the other aspects of the subject have been examined, such regulation should be regarded as necessary. I think that hon. Members will observe that, in putting forward the evidence, I have done no more than my duty, and that the general question of policy is in no way either prejudiced or prejudged.

Mr. Dalton

May we have a copy of the evidence in the Library?

Mr. Stanley indicated assent.

It being Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.