DISTRESSED AREAS.

HC Deb 23 November 1938 vol 341 cc1855-907

7.50 p.m.

Mr. David Adams

I beg to move: That, realising the acute distress prevailing in many districts due to lack of trade and consequent unemployment, this House is of opinion that as an immediate measure the Special Areas Act should be substantially amended and made applicable to all distressed areas pending a comprehensive scheme of economic reconstruction to establish national prosperity. This Motion is of such a character that I am optimistic regarding its prospects of receiving the assent of the House. It is a request that Parliament should deal fairly and equitably between those areas which are designated "Special Areas" and those which, though not so designated, yet possess a depth and extent of unemployment equal to, and in some cases in excess of, that in the Special Areas themselves. There is a further request that the Special Areas Act should be drastically improved and amended, and that extended powers should be given to the Commissioners and others affected, and, further, it is stated that in order to deal with the larger problems which must ensue, in regard to unemployment and kindred great subjects, State action, planning and reorganisation are imperatively necessary. Does the House appreciate the seriousness of this Special Areas problem? Many hon. Members, I think, fail to recognise the fact that, although we have passed through a period of four years of rapidly reviving trade, yet the Special Areas have remained in a state of chronic depression. In fact, their position has grown worse with the passage of time,. They are now in a worse position, as compared with the prosperous parts of the country, than they were in during the great depression at the beginning of this decade. Commenting upon that situation the "Economist," in July of this year, stated for the benefit of all concerned: Unemployment statistics, the researches of the Pilgrim Trust and the stark revelations in the recent report of the Unemployment Assistance Board have revealed only too clearly that last year's relative prosperity did little more in the distressed regions of the North and Wales than throw into relief their distress and poverty. That commentary is one which this House ought to bear in mind. To-night we are raising again, as I hope we shall continue to raise until a solution for it has been discovered, one of the most persistent and the greatest domestic problem confronting the country. It is true that there has been expenditure upon these areas in the creation of trading estates and other forms of localised help, but the pools of unemployment are deep and wide, and these have scarcely been affected. Indeed, in spite of our efforts, the position appears to be growing gradually worse. What are the latest figures obtainable in relation to both the general unemployment situation in the country and the unemployment situation in the Special Areas? I take the figures of the number of unemployed persons aged 14 and over, insured and uninsured, and on the registers of Employment Exchanges on 17th October, 1938, as compared with 18th October, 1937. The total figure for England, Wales and Scotland on 18th October last year was 1,390,249, and on 17th October this year the figure had risen to 1,781,227. It had increased by the startling number of 390,978.

I pass to the figures relating to the Special Areas for the same periods. In Durham and Tyneside a year ago the number of unemployed was 98,969, and the figure has risen this year to 116,500. In West Cumberland, last year's number of 9,628 has risen to 10,548; that in South Wales from 98,641 to 108,897; and in South-West Scotland from 58,744 to 68,147. The total figure for all those areas last year was 265,982, and this year it is 304,092, or an increase in the number of unemployed in these Special Areas of 38,110. It may interest the House to know what were the percentages of unemployed in those areas in those two periods. In Durham and Tyneside a year ago the percentage was 17.4, and this year it is 20.5. In West Cumberland the percentage last year was 25.1, and this year it is 27.6. In South Wales the percentage last year was 22.5, and this year it is 25.1 In South-West Scotland a percentage of 15.7 has risen to 18.5. Those figures must give concern, which certainly ought to give concern to the Government and to the country generally.

The Commissioner for the Special Areas has not been idle. He has been laborious and exacting; he has fulfilled his duty, in my judgment, to the best of his ability, having regard to the limited powers which he possesses. Grants to assist industry up to the end of October this year—I am quoting from his own publication—amounted to £5,347,000. Grants for land settlement, etc., were £3,262,000. Grants towards the cost of schemes urgently necessary in the interests of public health were £6,110,000 and other grants £2,333,000, making a grand total of £17,052,000.

Mr. Henderson Stewart

For England and Wales?

Mr. Adams

Yes, for England and Wales. What has been the result of these operations, and has this method of approach to the situation been successful as far as the Special Areas are concerned? I take as an example the Team Valley Trading Estate. There were 95 factories finished at the end of October, 83 occupied and 76 in production, employing 1,603 persons, but the total unemployed on Tyneside and in Durham exceeded 130,000, and this year there has been an increase in that number over last year of 17,500, indicating that the position is not being adequately dealt with, at present anyhow, whatever the future may hold. The outlay of the North Eastern Trading Estates for factories, etc., was £1,460,000 and for other factories £72,000, making a total of no less than £1,532,000. The House will be interested in the totals employed in the whole of the new factories on all the estates in England and Wales. In the new factories they employed 3,553 and upon estate development and construction 2,299. These latter are but temporarily employed, and I understand that from week to week on certain of the estates dismissals are taking place. That gives us a total, temporarily and permanently employed, of only 5,852, and I repeat that the problem is not being approached by this House in a correct spirit and with the hope that it will be solved.

I would ask why, on the Team Valley Trading Estate, so many of the intending factory occupants were refused any relief of rent, rates, taxes, or National Defence Contribution, although Parliament had authorised the Commissioner to offer these inducements. I think it can be safely affirmed—so my information goes—that certain prospective tenants of factories on these trading estates were unable to accept the invitation in the absence of the inducements which I have indicated. I hope the Parliamentary Secretary will be able to give the House some reply upon this important topic, and that if a mistake has been committed—I do not say that it has, and there may be sound reasons for this refusal—it will be rectified. I do know that some little time ago only three of these factories had received the inducement which the Commissioner was authorised to offer.

Who is responsible? The Treasury, in view of the unusual expenditure which has taken place on armaments. I will not and cannot say that reduction in the numbers of the unemployed have not taken place in various areas. It is a fact that they have, but that has been due to transfers and to emigration almost exclusively. We have seen the very flower of the workers leaving their native homes, unwillingly, driven at the point of the bayonet of penury, leaving behind them the older and in most cases non-employable men, and the very young. It is one of the melancholy commentaries on our industrial situation during the last few years that a mighty army of the very flower of our people, exceeding 40,000 in number, have left that area for other parts in search of employment. I know that to-day, in the London area, there are numerous good men from Durham, stalwart workers, anxious and eager for employment, who are out of work and who are begging, and praying to be sent back, some of them setting out to walk back to their homes in Durham. A situation painful to them, to the locality from which they come, and to all concerned with these refugees.

In these Special Areas there has been a vast investment of social capital. The expenditure upon those who have left has been heavy. We on this side contend that any policy which drives from an industrial area the best of its workers, upon whom the local authority has, in the nature of things, invested great sums, is a blunder of the first magnitude. The Special Areas are the seats of our basic industries, and industry should be preserved and nurtured there and should not be taken elsewhere, yet we have had the Government offering the most stubborn front to appeals which have been made to Ministers in this House for the location of industries. We have the spectacle of two great centures of population, London and Birmingham, to which our industrial population is flocking from all parts of the North. We have been denied the location of industries, and the Government leave industrialists from abroad to make their own selection. Those who have been great beneficiaries at the hands of this Parliament in the matter of tariff protection have been permitted, without let or hindrance and without the slightest consideration for the known interests of the workers of the country, to locate themselves in London and in Birmingham.

When one recognises the extreme vulnerability of these great cities—and however much we may be advised to the contrary there is no one in this House who seriously believes that in a period of warfare London is capable of being adequately protected—I say that in that direction we have made a great blunder, and although the hour is late, probably too late, if any further locations are to take place, they ought certainly to be excluded, unless there be the most substantial and overwhelming reason to the contrary, from proceeding to the South and should be located in the Special Areas. The Special Areas might be termed the arsenals of the nation. It is in the Special Areas that we find our basic industries in the main, and if this country were at war, it would be those very Special Areas, where factories are idle, where decay is setting in, both in the industrial population and in the industrial capital, which would be the great centres of our defences and which would be required for the manufacture of armaments and for shipbuilding and allied production.

I was privileged to hear yesterday Mr. Cleminson, General Manager of the Chamber of Shipping of the United Kingdom. He painted a most startling picture of the declension in our shipbuilding and shipowning industries and in the trades which are dependent upon them. It is in these identical areas that shipbuilding took its rise and has shown its expansion, and to-day its declension, but it is in these areas, which for that very reason have the resources and investments for our future shipbuilding programmes, both for peace and for war, that there ought to be a reinstatement at the earliest possible hour. The Special Areas are a melancholy proposition, viewed from any angle. Unemployment and under-employment means low incomes and reduced purchasing power for large communities, with the inevitable tendency to lower wages in these and other areas. Then we have this crushing municipal drain for relief purposes, where these local authorities' resources have been drained almost to extinction. The whole of the local authorities in the geographical area of Durham recently had a conference, the object of which was to inquire whether the time had arrived—and it had, in the judgment of many public representatives—when a halt must be called and when the Government must be called upon to meet the current financial obligations of those authorities.

I do not propose to detail the continuing poverty and hardships of individuals, families, traders, and local authorities and the loss of physical fitness, of morale, and of hope, with grinding despair and depression, which only those who pass through it can fully understand. Colleagues who will follow me will go into fuller detail under those heads. I desire to speak only of the national waste of unemployment at large. We have a mighty army of 1,750,000 unemployed persons. One of our economists has indicated—and I think he may have been taking Northumberland and Durham more particularly—that an adult skilled worker was a wealth producer to the extent of about £200 per annum. That does not seem to me to be a high estimate, but it indicates that unemployment must be losing this country annually something in the nature of £100,000,000, plus the vast sums spent upon unemployment relief and the indirect costs of destitution. It is fact that from November, 1920, to March, 1936, this State paid out for unemployment under various heads the colossal figure of £1,000,000,000. With a situation of that sort, the meagre efforts which have been made, and the refusal of the Government to take serious notice of the problem, one might almost be justified in believing that unemployment is not distasteful to capitalist governments.

The trading estates have been of considerable practical value, and I believe that our interests will be well served and we shall obtain the maximum advantage from them if they are extended and linked up to cover the whole country. The Commissioner for the Special Areas, as my Motion implies, now works with very limited powers and in very limited areas. His work has been of a splendid character and ought to be amplified as we have indicated. The trading estates in time may certainly justify themselves, and the time has come for an extension of their numbers. It must be clear to the House that a new national effort must be made for the Special Areas. We on this side contend that the problem is so stubborn, as is unemployment generally, that a Minister of Cabinet rank ought to be appointed for this express purpose. He ought to have the power to locate industry. He ought to persuade the Cabinet that there should be set up forthwith in the colliery areas plants for the production of oil from coal. Even though the oil interests may be entrenched, so far as this Government is concerned, these, in the general interest of the State for both peace and war purposes, ought to be brushed aside. The State could provide clothing and other factories in the Special Areas. I am glad to see that, owing to the local patriotism of a Newcastle man, a clothing factory has been established in the Special Area of Gates-head-on-Tyne. The quality of the labour for that production, he asserts with great experience, is equal to that of the Midlands.

Low standards of income, both on relief and in employment, ought to be raised forthwith and the means test ought to be extinguished without delay. A shorter working day in all trades must be initiated if the rapid mechanisation is to be properly met. I was surprised that no attempt was made by Government direction in the Special Areas to make use of the unemployed on air-raid defence work. I am one of those who believe that until we have made provision for bomb-proof shelters in one form and another, particularly in the great centres of population and industry, we cannot give full protection to the industries, the workers or the population generally. In what better way could we employ our unemployed, who are a wasting asset, costly to themselves and to the State, than in such work? The school-leaving age should be raised for all to 15, with proper allowances and then to 16. Pensions ought to be provided to take the older workers out of industry at an earlier age. We cannot face the future successfully unless we deal with these two classes in industry—the young between 14 and 16 and the older workers. If provision were adequately made for them it would leave scope, particularly with a rational shortening of hours, to absorb large numbers of our unemployed.

I come to a subject which is acute so far as the local authorities are concerned because of this problem. The burdens arising out of unemployment have reached colossal proportions. The county of Durham would require, if its debt were to be liquidated, a gift of £900,000. Other authorities are similarly faced with burdens so great as to be detrimental to industry developing in their areas. Therefore, these burdens ought to be liquidated, if not wholly, then in part, over a period of years, and there ought to be equalisation of rating burdens throughout the country. This foreshadows heavy expenditure, but it would only be expenditure commensurate with the magnitude of the problem. A Government recognising its responsibilities at this hour would be prepared to rise to the occasion.

The last suggestion embodied in the Motion is that State planning has become imperative in the face of new factors in world competition, particularly from the totalitarian States. I observe in to-day's Press that the German labour front is asking German industrialists working abroad to introduce Nazi measures into their operations. That is indicative of the form of competition from that source through which we are about to pass. I do not believe that so far as this country is concerned we are to see any submerging of labour's rights, but that is the demand—an acceleration and intensification of labour, an extension of hours, and an alteration of conditions such as we know to prevail in Germany. I say that in self-defence we must have State planning. There should be a national survey of all industries—financial, trading and those engaged in commercial operations. Only thus can we ascertain the aggregate resources and capacity of the State. Every industry ought to be scientifically examined, unified and modernised both as to capital and labour. In my judgment, while so far the community are agreed that the quality of capital ought to be always high, it is equally vital—

Mr. Magnay

Can we have this point made clear? Is the hon. Member advocating the conscription of labour as well as of capital?

Mr. Adams

If I am advocating that I will indicate it to the House. I am advocating that the quality of labour is equally vital to the State and our industries. It should be of the highest standard in physical fitness and technical skill and be given a sense of security and interest in the industries with which it is concerned. The conditions which prevail and under which almost 5o per cent. of our industrial population are living in a state of malnutrition, should be brought to an end, in the rich State ours undoubtedly is. Penury among the workers should be as little known as leprosy. Even under modern capitalism the State must, in defence of its members, assume gradually the overlordship of its resources.

The statement will be made, of course, that this is merely Socialism, merely a suggestion that public ownership should supervene private ownership, but I repeat for the benefit of the House that in self-defence modern capitalism must agree that the overlordship by the State of its resources in finance, in land, in manufacturers and in transport should be established. The appeals which have been made during this Parliament by different industries for State co-operation and for financial aid show that a new day has dawned. Clearly we ought to be in the position to plan ahead for production, for consumption and for those trades upon which the State depends for its prosperity. There have been tentative approaches in the wide field of agriculture, partial it is true, and haphazard, but on the lines which I have indicated. Shipping, one of our great and vital industries, is now engaged in a survey of itself, and will submit the result to the Government for inevitable State intervention in defence of that industry. If that be good for shipping and for agriculture, why not for all other forms of the country's activity?

Finally, we may justly assert that we are living in an age of great potential wealth for the whole community. Upon the facts of production, poverty should be left far behind every member of the human family. Yet we have deliberately arrested wealth production, and are deliberately planning for scarcity. For what object? Not the benefit of the community, not the enrichment of the State, but to ensure profit-making for modern capitalism. I ask by what other road we can enter into this great and dazzling heritage than upon the lines of national co-operation? In direct proportion to the steps taken in that great field of national endeavour will national prosperity ensue and unemployment and poverty be mitigated, overcome and finally disappear.

8.35 p.m.

Mr. W. Joseph Stewart

I beg to second the Motion, which was moved by my hon. Friend in such a comprehensive speech that I am afraid little is left for me to say. We are debating the question which has often been before this House, and which is of vital importance to hundreds of thousands of our people who are domiciled in the Special Areas. It is suggested in the Motion that we should extend the Special Areas Act with a view to bringing in districts which, though distressed, are not termed Special Areas. In such districts the percentage of unemployment among insured workers is from 40 to 5o, and in justice to those people we should do what we can to come to their aid, particularly by an extension of the Special Areas in order to bring them in.

Even the Special Areas Act has not been the panacea for all our ills, because it falls far short of what we would like it to do on behalf of the Special Areas. The Government have not shouldered their responsibilities in regard to the Special Areas, or done as much as they could have done within the bounds of the Act. They have practically shelved the national planning of industry, and have not dealt with the question of the location of industry. We arc bound to admit that the Special Areas are suffering owing to those facts. The location of industry is a matter of paramount importance to us as a people. There is the strategic point of view. Not many weeks ago I listened to the Debate in this House upon air-raid precautions when speaker after speaker dealt with the vulnerability of London. Owing to London's size it was practically impossible to evolve a scheme that would give a measure of safety to its teeming millions of people. I was always under the impression that one of the fundamentals of defence was to remove an objective out of the range of attack or, it that were impossible, to make the objective thin enough by deploying, in order to minimise the effect of attack.

The cost of defending a packed target like London is enormous, and thinking people in the London area realise that that is so. There are the questions of evacuation in case of air attack and of protection against gas, which protection is regarded as practically an impossibility in a heavily crowded zone. Air-raid shelters cost a tremendous amount in areas that are built up. Then, from the domestic point of view, we have to consider the effect of uprooting people, because of the omission to deal with the location of industry, and of planting vast numbers of those people in strange surroundings. We should be destroying long-established local patriotism, which is as important as national patriotism. Greatness has been built up on family and local loyality. Another problem is created by transferring people from districts which have had to bear the cost, by local rates, of nurturing and educating their people, and which are denuded of their finest citizens, while other areas, lower rated, reap a rich harvest at the expense of high-rated and poorer areas.

I sometimes think it would have been wise if we had taken heed of the findings of the various people who have been appointed by the Government to inquire into the conditions in various areas of the country, and to the remedies which they have suggested. In 1934, prior to the birth of the Special Areas Act, an investigator was sent to find the exact conditions prevailing in the county of Durham and to suggest remedies. With the indulgence of the House I would like to read the findings of the right hon. and gallant Member for Hornsey (Captain Wallace), who was sent by the Government to make that investigation. He said: Durham and Tyneside can only escape from the vicious circle, where depression has created unemployment and unemployment intensified depression, by means of some positive external assistance. Consideration of the form which such assistance should take inevitably raises questions of general policy. … The first of these questions is the attitude of the Government towards the location of industry. Any large scale movement of population involves an immense waste of social capital. Not only have houses, schools, roads, sewers, hospitals, etc., to be built in the newly settled area, but there must always remain a residue of persons who cannot be transplanted and must therefore become a charge upon public funds. The most outstanding example of the movement of population to a new area is the industrialisation and consequent rapid growth of Greater London. The evils, actual and potential, of this increasing agglomeration of human beings are so generally recognised as to need no comment. It is suggested, therefore, that the time has come when the Government can no longer regard with indifference a line of development which, while it may possess the initial advantage of providing more employment, appears upon a long view to be detrimental to the best interests of the country; and the first practical step which could be taken towards exercising a measure of control in this direction would seem to be some form of national planning of industry. Those findings were compiled four years ago by a representative of the National Government, but up to now nothing has been done to implement those findings and to seek to carry into effect that which the right hon. and gallant Gentleman so ably suggested in his report.

As regards the location of industry, in 1936, in Greater London, 256 new factories were set up, employing 22,500 people. In 1937 there were 215 new factories, employing 15,850 people. In those two years, therefore, there were 471 new factories, employing 38,350 people. In Durham, Northumberland and the North Riding of Yorkshire, in 1936, there were 14 new factories set up, employing 4,800 people, and in 1937, 19 new factories, employing 1,350 people, or a total of 33 new factories employing 6,150 people. Thus, there were 471 factories in the Greater London area, against a total, in those two years, of only 33 in Durham, Northumberland and the North Riding of Yorkshire. In the first case the new factories employing 38,350 persons, and in Northumberland, Durham and the North of Yorkshire only 6,150. Surely that suggests that, whatever questions the Government may be concerned with, they are not concerned with the location of industry. From 1933 to 1937, in Durham, only seven new factories were set up, apart from the trading estates, and we who come from those areas, which are experiencing the increasing dangers of trade depression, are really concerned about what is happening there, about the apathy of the Government and their seeming unwillingness to deal with this problem which is vexing hundreds of thousands of our people.

It has been often said from the Front Bench opposite that, owing to the policy pursued by the Government, things are improving generally in the Special Areas. I would like to give one or two figures from various parts of Durham in order to prove that the contrary is the case. In the Bishop Auckland area, the unemployment figure in October, 1938, was 37 per cent. of the insured population, an increase of 3.9 over the 1937 figure. In Cockfield it was 41.9 per cent., or an increase of 16.9 over the 1937 figure; in Crook, 31.7 per cent., or an increase of 11.3 over a year ago; in Spennymoor, 26.4 per cent., or an increase of 7 per cent.; in the Boldon area, 31.3 per cent., or an increase of 10.8 per cent.; in South Shields, 31.2 per cent., or an increase of 3.5 per cent.; and in Sunderland, 26.8 per cent., or an increase of 3.7 per cent. over 1937. Taking Durham as a whole, one in five of the industrial insured population, and in Sunderland and South Shields one in four, are unemployed in a time of national prosperity. Taking Tyneside and Wearside, in October, 1937, Sunderland had 14,775 unemployed, South Shields 8,951, and Jarrow and Hebburn 5,161, or a total, in those three county and municipal boroughs, of 28,887. In Sunderland this year the figure is 16,832, or an increase of 2,057; in South Shields it is 9,917, or an increase of 966; while Jarrow and Hebburn show a slight reduction to 5,122. The total this year is thus 31,871, showing an increase in the three boroughs of just on 3,000 unemployed.

A reply which I received from the Ministry of Labour yesterday in regard to the number of unemployed in the administrative county of Durham and the county boroughs of Sunderland and South Shields, indicated that on 17th October this year there were 50,040 unemployed persons aged 18 years and over on the registers of Employment Exchanges in the administrative county of Durham. The corresponding figures for Employment Exchanges in the county boroughs of Sunderland and South Shields were 15,448 and 9,138 respectively, making a total of 74,626, and of that number 72,242 were rceeiving unmployment benefit. I find, on analysing those figures, that in the administrative county of Durham there were 14,196, in the county borough of Sunderland 5,051, and in the county borough of South Shields 1,809, or a total of 21,056, who have been out of work for 12 months or more, and some of these people have been out of work for five, six, seven, and in some instances 10 years.

That is happening at a time of national prosperity, when scores of millions of pounds are being spent on armaments; and yet we have to acknowledge that, with all this money being spent in a particular direction, with all that the Government have done, the condition of Durham as a county is getting gradually worse. The Government have sought to meet the situation by transferring people out of the county, and from 1932 up to March, 1938, they have transferred 20,475 men, 8,106 women, 6,482 boys, and 6,554 girls, making a total of 41,617 persons. They are taking the best of our people out of the county, instead of bringing industries to the area, and are sending those people to other counties. Many of them arc coming to London and helping to swell the large number of people here. That is a menace to London as a city. It is not fair that this should be done. It is against the best interests of our homeland and against the best interests of the boys and girls themselves; and I hope that in any further effort the Government may make to solve the problem of the Special Areas they will try some other method than the transference of our best people. In Durham to-day, of every 10,000 of our population, we have 639 on Poor Law relief, as compared with an average for England and Wales of 256.

I come back to the report which the right hon. and gallant Member for Hornsey compiled four years ago, in which he suggested that, in the interests of Durham, in order to help the county to revive and take its place again as an industrial county, it should be given an annual subsidy of £700,000, to make the rates comparable with those of the rest of the country. In spite of that, nothing has been done to meet the needs of Durham, which as a depressed area, has had to meet commitments that ought to be met by the National Government. We have been debating to-day the question of increasing old age pensions. I have here a return showing that in Durham county we have 11,067 old age pensioners who are drawing Poor Law relief, costing the county £5,567 a week—this year it is costing £289,484. Widows and orphans and old age pensions this year are costing Durham £74,724, and the augmenting of compensation paid to injured workmen—something that the ratepayers ought not to have to face—is costing Durham this year £20,956. That makes a total for these three items of £385,164 for this year. That is equal to a 3s. rate, and it represents 35.2 per cent. of the amount spent on ordinary outdoor relief. In 1937 we spent in Durham for Poor Law relief £962,788, and for unemployment allowances £3,613,233, making a total of £4,576,021. This year, if the unemployment allowances remain at the figure of last year, we shall spend, owing to the increase in Poor Law expenditure,. £5,232,961. We are told that prosperity has come to those Special Areas, and' yet this year we shall spend £1,619,728 for Poor Law relief and £3,613,233 for unemployment benefit. Surely, by no stretch of the imagination can any Government suggest that prosperity has come and that they are doing their best for areas that are depressed through no fault of their own.

We have voiced our protests in this House often. We have tried to bring the plight of our people before hon. Gentlemen opposite, and all we have asked has been that they will allow our people to enjoy that which is every Britisher's right—the right to live a fuller and better life. Go into our mining villages, go into our townships, and you will see depressed men who have lost hope. Go into our homes, and you will see our young women, our wives, prematurely aged, because they are fighting this hard economic fight 24 hours a day, seven days a week, year in and year out. And the Government absolutely refuse to face their responsibilities and do what they ought to do for those people, as decent Englishmen. We ask the Government to come to our aid, and do something for us. If they do not then in the near future the results, as far as they, as a Government, are concerned, will be disastrous.

9.4 p.m.

Mr. Henderson Stewart

I beg to move, in line 2, to leave out from the word "House," to the end of the Question, and to add instead thereof: welcomes the intention of His Majesty's Government to extend the period of the Special Areas Acts and to introduce legislation dealing with industrial development in certain other areas where there is a high incidence of unemployment. I imagine the whole House would like to congratulate the hon. Member for Consett (Mr. David Adams) upon his success in the Ballot, and upon having chosen this subject for the consideration of the House. As the hon. Member for Houghton-le-Spring (Mr. W. Joseph Stewart) has said, this is a matter that attracts the sympathy of all hon. Members. It is the desire of all parties in this House to do their utmost to bring succour to the unfortunate people who live in these areas. But, while one thanks the hon. Member for having provided this opportunity, I did feel surprised at the picture which he drew, and I was still more surprised when I listened to the hon. Member for Houghton-le-Spring. He said many strange things. He seemed to imagine that over here we thought that prosperity had come to the Special Areas. I have never heard anybody make such a claim. The hon Member also said that the Government has absolutely refused to face their responsibilities. [HON. MEMBERS: "Of course they have."] I am glad that I am not misquoting him. He said: "Do something for us!" Anybody listening to this Debate who did not know the circumstances would imagine that the Government had done nothing at all in the course of the last few years. [Interruption.] I hope that hon. Members will let me proceed. They have occupied one hour and 40 minutes in two speeches.

Mr. George Griffiths

Not one hour and 40 minutes.

Mr. Stewart

I was induced to shorten my speech but I shall obviously not succeed if I am interrupted. Hon. Members opposite lead one to understand that unemployment in the Special Areas has done nothing but increase since this Government took office. What are the facts: I do not want to spend much time upon this, but the facts ought to be faced. There is no use denying that in the last year there has been a recession, and I have no doubt that the figures quoted by hon. Gentlemen opposite are accurate, but is it quite fair, in presenting a general picture, to take only the figures for a certain 12 months which happen to be suitable to hon. Members?

Mr. G. Griffiths

You always take figures to suit yourself.

Mr. Stewart

Let me take the advice of the hon. Gentleman. I take figures which do suit me but which also, as it happens, suit the facts of the case. What are the facts?

Mr. Griffiths

Take the 1933 figures.

Mr. Stewart

I will take what figure you like. I take November, 1934, and I take that for the reason that it was just before the appointment of the Commissioner. In November, 1934, in the Special Area in Tyneside, there were 91,000 unemployed, and in 1937 there were 53,00o unemployed. Certainly, the number increased last winter to 59,000, but to-day it is only 55,00o. These figures show that, as a result of the efforts of this Government and of the Commissioner, unemployment in Tyneside is down by 36,000 persons in the last four years.

Mr. Griffiths

How many transfers?

Mr. Stewart

If I go from Tyneside and take all the Special Areas, including Scotland, Cumberland, South Wales and the North-East of England, the figures are equally striking. Again there has been a recession this year, but if I take, as I am entitled to do, the whole period during which the Commissioner has been working, there has been a fall of 110,000 persons on the unemployment register. That is a very considerable decrease over the whole of the Special Areas.

Mr. Griffiths

How many transfers are there in that number?

Mr. Stewart

I am prepared to face the question of transfers which the hon. Gentleman raises and I will deal with it. The fall is not entirely attributable to transfers, because the total number of insured workers in the whole of the Special Areas in 1937 was about the same as in 1935. Therefore, one is entitled to infer that in that period the insured persons actually in employment increased by no fewer than 140,000. These are facts which must be recognised by the House. They are the result of work that has been done in a great number of directions. The hon. Member quoted the vast sums of money that had already been allocated by the Commissioners. The sum of £21,000,000 has already been allocated for schemes. Is not that something? Does it suggest that the Government have been doing nothing? By all means ask for more, but do recognise what has been done and its immense assistance.

The hon. Member for Consett chided the Government for their failure to extend the system of trading estates. He said, "What a paltry effort. There are now considerably over 200 factories in operation and there are 4,000 persons employed. What a paltry figure compared with the mass of employment." I recognise the comparisons, but it is surely not for the hon. Member and his party to criticise us for not doing more for trading estates, when it was they who at the beginning opposed their creation. I remember the night when the hon. Member's colleague the Member for Jarrow (Miss Wilkinson) made her views perfectly plain. I also recall that her remarks were accompanied by the cheers of hon. Members opposite. She told us in March, 1936, only two years and a half ago, that it was impossible to talk about these trading estates really developing into anything worth while in less than 30 years. She told us that she had met a first-class industrialist in Durham Or Jarrow who told her that 50 years was a more probable time. She also said: I am a trade union official and I deal with many machine trades, and I know from my own experience that to suggest that a man can take over a ready-made shell and put in machinery to fit it is fantastic. It is precisely that piece of fantasy that has been brought about, and hon. Members are now asking that more trading estates should be established. I would say in passing that the hon. Member in his Motion made no reference to the other side of the Commissioner's work, to which Members in all parts of the House used to refer, namely, the social side. That was the first task of the Commissioner, because it was the main demand of Parliament that he should try to improve the social conditions of the people; and that he succeeded in doing to a large extent. I think that on this occasion we should pay tribute to that action. For these reasons the picture of the hon. Gentleman and his colleagues seems to me unnecessarily dark; it gives an impression that is not fair and shows a lack of gratitude for which has been done, and in which hon. Members sometimes themselves have assisted. It does not really come well from hon. Members, tens of thousands of whose supporters are gaining in direct benefit from the Special Area work which has been done in recent years. That is what I have to say about the present position.

I think that hon. Members and I will find ourselves in greater agreement when we talk about what is wanted in the future. Let us make plain to the Government that we are all dissatisfied with the plight of the Special Areas now and that we all want things to be done a good deal better. [Interruption.] I would rather be here than on the side of the hon. Member. Take, first of all, the position inside the Special Areas. What is wanted there? We are agreed that the work of the Commissioner and his staff must be continued, with all the powers now associated with him. That is the first thing. Secondly, we must maintain and if possible expand the financial resources now available to assist the Commissioner in his industrial development work. At the present time there are three forms of assistance, the Nuffield Trust, the Special Areas Reconstruction Association, and Treasury loans. The Nuffield Trust funds, I understand, are running out. While I have found it necessary to make some criticisms of the letter which Lord Nuffield wrote to the Press a few days ago, I should like to pay full tribute to his work in the Special Areas and in other parts of the country. The fact is that the Nuffield Trust fund is disappearing. I understand also that the Special Areas Reconstruction Association's funds are running out. Is it intended that the Treasury loans shall be increased to take the place of those two funds?

Thirdly, with regard to the Special Areas themselves, I should like to make a plea to the Government for a more generous attitude in regard to armament work. I was a member of the deputation which waited on the Minister of Labour last week, representing the Special Areas. The leader from Cumberland told me that in that county three years ago they made a complete survey of every factory, the sort of work done, the machinery, the man-power, and sent the result of that survey to the Minister for the Co-ordination of Defence; but that the results had been practically negligible. Precisely the same thing has happened in Scotland. I recognise that the Clyde has had its full share of naval contracts, but with that exception we in Scotland are not getting anything like a fair share of Government work.

In the Ministry of Labour Gazette for this month there is a list of Service Department contracts which have been given out. The Air Ministry, according to that list, placed in October 264 contracts, and of that total Scotland got seven. I do not know how other districts are faring, but I know that in that part of the country for which I have some responsibility we are not getting our share. Therefore, I must tell my hon. Friend that there is keen dissatisfaction in Scotland at this state of affairs.

What is required outside the Special Areas? The Motion seems to indicate two or three proposals. First, it suggests that the Special Areas legislation should be extended to other areas. The second proposal suggests a comprehensive scheme of economic reconstruction, in order to establish national prosperity. In the first part of the Motion I have discovered a third suggestion, in which it is said— realising the acute distress prevailing in many districts due to lack of trade and consequent unemployment That seems to suggest that the hon. Member who moved the Resolution feels that the Special Areas will be helped as much by a general improvement in trade as by anything else. I welcome that view, because that has been the Government view from the start. They have held from the beginning that only by increasing the volume and turnover of businesses of all kinds can you bring something like prosperity to these areas. To that end the Government have brought about trade agreements, financial assistance for industry, protection against foreign competition and so on. That has helped the Special Areas as well as the country generally. I claim the hon. Member as a convert to that policy.

With regard to the proposal for a comprehensive scheme of economic reconstruction, I did not get very much hope from the hon. Members observations. He told us that it meant national planning and a national survey, that the State should assume the over lordship of its resources, and that finance, land, manufactures, transport and power should all be taken over by the Government. That to us is Socialism, and it is something we are not prepared to accept. For that reason, principally, I move the Amendment. But when the Motion suggests that the Special Areas legislation should be extended, then I understand. That is a practical proposal. We realise its significance. But I would ask the hon. Gentleman whether that is the best way of assisting those distressed parts of the country which are outside the Special Areas to-day. I know some of those parts, such as Lancashire and particularly Scotland. In Scotland, the Highlands, the fishing ports, and places like Dundee are greatly distressed at the present time, and they get no assistance at all.

Mr. Kirkwood

The whole of the Highlands are a distressed area.

Mr. Stewart

I said the Highlands. The distress in those parts of tile country is great. In Dundee there is now nearly 19 per cent. of unemployment, in Peterhead 23.5; in Wick 32.8; while in the whole of Durham it is only 21.8 and in Cumberland 21.5. Therefore, we can well speak of the distressed areas outside the Special Areas. Over wider districts in the midlands and the western parts of Scotland there is a general level of unemployment which not the most sanguine of us can look upon with anything other than dismay. I doubt whether those areas wish to become Special Areas. Perhaps the hon. Member for Dundee (Mr. Foot) can tell us what Dundee thinks, but I doubt whether they wish to be classed as a Special Area. I am certain that to take all these different areas, dotted about the country, and to call them individually Special Areas, would bring about an administrative problem almost impossible to handle.

It is here that I come to the speech made by the Minister of Labour last week. It was a short reference, and he made no attempt to explain what he meant. He said: The House will remember that these Acts include provisions for encouraging the establishment of new industrial undertakings, not only in the Special Areas themselves but also in certain areas outside. Experience has shown that some modification of the present conditions applying to the outside areas is desirable in order to make loan facilities more readily available for new undertakings, and the Government propose to introduce legislation in due course for this purpose. On that point I put a question: Before the right hon. Gentleman passes from the Special Areas question … would he indicate whether any other amendments to the Act are contemplated? He replied: The statement I have made makes it clear We propose to so continue the present Act in the Expiring Laws Bill, and not only that, but to meet the point that has been made about the nature of certain restrictive powers under that Act."—[OFFICIAL REPORT, 14th November, 1938; col. 646, Vol. 341.] I ask my hon. Friend to explain just what that means. I do not know what it means, but I know what I would like it to mean. In my view we have passed the era of selected pockets of emergency assistance. We have reached the stage of regional endeavour. If I had my way I would abolish the Special Areas scheme, in Scotland at any rate, and declare the whole of Scotland one development area, and I would provide aid and encouragement on a regional basis. I imagine the same kind of view could be taken about the North of England as a whole, or about Wales as a whole, and I think we shall be obliged ultimately to adopt such a method.

In the case of the old age pensions scheme which we discussed earlier this afternoon, hon. Members opposite knew they could not get all they wanted, so they asked for a half measure. I am in the same position to-night. I ask for what I think is possible and practical now to bring about an improvement in the Special Areas. Let me say this at the outset. No policy will avail unless it is based on a recognition that the difficulties of the Special Areas derive from the lack of balance in their economic structure. In Scotland we have this particular difficulty, that many of our industries are built on the old nineteenth century pattern, and we have failed to secure the rapidly expanding industries of the twentieth century. There was a very significant passage in an article which appeared in the "Times" a few months ago, the writer of which had been to Scotland and had come away overwhelmed by the impression that we all get, that here is a country for at any rate the Western part of Scotland, Clydeside) which is almost wholly dependent upon two main industries. The result is that when these two main industries collapse through the fall in international trade, the whole population of that area, 2,000,000 to 3,000,000 people, is placed in a state of underemployment. That dependence on one or two trades is the outstanding factor in all the Special Areas, and it is because of that that our main purpose must be to introduce new industries. In that connection I am to-night happy to be able to pay tribute to the work of my right hon. Friend the Minister of Labour, because he more than any other man is responsible for the Government's drive for the new trading estates. I offer my right hon. Friend the warmest congratulations on the work he has done in that direction. So far as Scotland is concerned, nothing can save the country from decline except a bold diversification of her industries.

An attempt was made in 1937 to create what were called site companies, in order that the benefits of trading estates might be shared by industries outside of the Special Areas. We know that that effort is not succeeding. There is only one site company in operation, because local people are not prepared to put down the money. As a result you have not been able to assist industry by Treasury loans as you would desire to do. I want to ask my hon. Friend: Does the statement of the Minister a few days ago mean that he intends to offer financial facilities for the establishment of these site companies outside the Special Areas, or does he mean only that he intends loans to be offered to individual industrialists? Personally I hope it will be found that he means both, because I am profoundly convinced that the trading estate idea, the grouping of light industries under a central direction, the common supply of services and amenities, the credit facilities that accompany such an organization—that idea is one of the most valuable industrial ideas of this generation. Slough was a beginning, and I ask that there shall be more Sloughs in every part of the country.

There is a Royal Commission sitting now on the location of industry. I quite understand that until that Commission reports it would be foolish for the Government to set about the development of trading estates here and there in the country. That, however, is not a reason for the Minister to abandon his plans for creating trading estates; it is a reason to expedite the Report of the Royal Commission, and I hope very much he will be able to take that step. The Government deserve the greatest praise for what they have already done. But let them recognise that many of us view these Special Areas with, I will not say shame, but something approaching shame; we deplore that throughout this great country there should be areas where there is so much unemployment and so much distress. Therefore let the Government realise that more should be done.

I will make this last plea. I have been speaking of the desire for extending the trading estates. I would press on with that for this if for no other reason. To-night the Financial Secretary to the Treasury told us about the financial commitments of the Government, and next year they will be greater than ever. The burden of the armaments programme is going to be co10ssal. How is it to be met save by stimulating new trades, new productive industries? Let the Minister take the fullest courage from this Debate to-night to proceed with his new industrial estates with all speed, recognising that in that way he is doing a service to the distressed areas and a great service to the country.

9.34 P.m.

Major Oscar Guest

I beg to second the Amendment which has been so ably moved by the hon. Member for East Fife (Mr. Henderson Stewart). I think it is fair to say that the experiments which have been tried under the Special Areas Acts have had a very remarkable measure of success, considering the time they have been in operation. It is not an easy thing to move industry on a large scale, and particularly a number of light industries in a short space of time; and I do think it is encouraging that at the two estates that already exist at Team and Treforest, there are 180 factories in operation or being built, and a very large proportion of them actually in operation. Although these factories are not employing large numbers of men at present, it must be remembered that a number of them have only just commenced their operations and that a number more have only been going for a year or two. No business with a good future before it can grow at more than a certain pace. I think we may look forward to a reasonable proportion of the zoo factories which have arisen as a result of the Special Areas Act in places where there is the worst unemployment in the country growing into works of importance and giving employment to really large numbers of people. The Special Areas Act has also given us trading estates and training centres which have been started for young labour. They are a very correct and valuable contribution to a solution of this problem. The trouble which industrialists are up against in going to districts which are not accustomed to light industries is to find labour suitable for their requirements.

Perhaps the most useful contribution I can make to the Debate on this subject is to give the experience of one who has tried to establish a light industry in one of these areas. We may have different views as to whether the effort has been a good effort, but we have to deal with industrialists whom we are trying to persuade to go to the Tyneside, South Wales and other areas. We must weigh the advantages and disadvantages as a manufacturer sees them. If he is asked to start a factory in Sunderland or South Wales or North-West Durham he has to face the difficulty of the distance from markets, the difficulty of training labour unaccustimed to his sort of work, and then he has to face the question of the housing problem for his men and more particularly for his key men. I would like to make the plea that so far as the more remote areas are concerned more attention should be given to the housing accommodation for the key men. If you are going to move an industry into the mining valleys of South Wales the men there, with the best will in the world, do not pretend to understand engineering and you have to take key men to run the machinery. The difficulty that has to be faced is in finding housing accommodation for these key men. I think the Government might help us more in our efforts to start industry in the distressed areas by providing more of the funds that are available for housing the key men.

If it were possible to erect houses under the housing schemes around a trading estate where the houses are wanted, as opposed to erecting them around the township, where the houses are not so much wanted, it would be of great assistance in the transference of labour. The only possible form of transference of labour is where you can offer houses to the man, his wife and his family, and it is the only form of transference which is likely to succeed. I wonder whether a suggestion that the Special Areas Commissioner should have more say in the housing schemes of borough councils and possibly county councils would be of assistance? From the point of view of the manufacturer who is being tempted to go to a Special Area there are undoubtedly advantages for him, and the main advantage is the labour supply. In the larger areas labour at the present time is comparatively scarce. Labour goes to one factory and then it will move to another. That is unsatisfactory both to the employer and to the workman. In the areas where unemployment is high labour is plentiful, and what is more is anxious for work. There has been a feeling among industrialists that if they went to Newcastle or South Wales or the distressed areas in the North they would have a difficulty with their labour; that they would not be willing to work. That has not been my experience. In South Wales, at any rate, the men want work, they are willing to work and are anxious to learn.

The third inducement which has been offered by the Government to manufacturers to start business in a distressed area is to put up a factory for them. Factories are put up by the Government and rented to the manufacturer. That is a great consideration for any firm which starts with not a great deal of capital at its disposal, and further I think that this capital assistance is a weapon which the Government can use, if it is used discreetly and wisely, towards assisting young industries. There is no form of business so difficult to finance as a business which is not a very large one and which has no past record, but it does not follow that it has not therefore the germs of good business, and I think that assistance by the Government by way of a loan would be a great inducement to manufacturers to go to these areas. A great deal more could be done if there was more publicity in this matter. If the various trading estates published a booklet which they could send round to the manufaceurers, and if there was a certain amount of publicity in the newspapers as to the labour available, the railway facilities and factory sites, with illustrations of the factories which have been built, it would have great weight in inducing new industries to try these areas where we are so anxious they should go. In the same way some form of register of labour conditions in areas would be valuable. One of the first things an industrialist thinks of is whether he can get a plentiful supply of labour. I do not think you can bring home too much to the man who desires to start an industry the advantages of a large, willing and plentiful labour supply.

Let me say one word on the question of the location of industry. This is a subject which will have to be tackled, and I am very glad that the Government have set up a Commission to report on the subject. There are two ways of looking at it. You can either tell industry where it has to go or you may tell industry the places which are full up and where you do not wish them to go. Perhaps that may be the wiser line to take. But we have to face some form of restriction on these everlastingly growing towns. It is not only a question of the danger in war and the difficulty of food supplies, but there is also a question of health. I noticed myself that the difference in health of labour in South Wales and London was most marked indeed. I think the growth of these towns beyond a certain limit should be controlled if we can devise a wise way of doing so.

Hon. Members opposite have raised the question of including other areas under the Special Areas scheme. I think that here we ought to go rather carefully and warily. After all, the number of new industries which there are to share round is not unlimited. Surely, it is better to concentrate on certain larger centres of unemployment than to dissipate our energies by going to too many places at the same time. It may be that in time we shall be able to de-schedule certain areas which are now Special Areas, and I think that time may not be so far distant. Possibly, in future, some datum line can be formed, and when a district rises about the average unemployment figure of the country it can be taken out of the Special Areas class and some other district be put in.

I feel that on the question of extending these benefits to further districts we ought to bear in mind the fact that new industries are not unlimited in number. We cannot press a button and say we will have more industries in a certain place; they have to grow naturally, and, what is more, they have to carry on. However, I feel that a great start has been made through the Special Areas Acts. I welcome very much their extension, as do hon. Members opposite, and I believe that with publicity, which is growing daily, as to the possibilities of work in those areas and the benefits which accrue to those who go there, we shall see a steadily increasing stream of manufacturers going to those parts. Moreover, I think that a proportion of the factories that have gone there will increase in size and become large factories in the future.

9.48 p.m.

Mr. Dingle Foot

The hon. Member for East Fife (Mr. Henderson Stewart) told us that the Government deserve the greatest praise for what has been done under the Special Areas Acts, and it is true, of course, that the Government in general, and the Minister of Labour in particular, are always claiming credit for their Special Areas legislation. It is indisputable that they have, in the last four years, passed three Acts to deal with the Special Areas, but no hon. Member who has sat in the House during the last two Parliaments supposes for a moment that the Government did so willingly or readily. The 1934 Act was introduced only because of the prolonged and persistent pressure which came from all quarters of the House. I remember very well those Debates, when the hon. Member for Stockton (Mr. Harold Macmillan) compared Ministers on the Front Bench opposite to a lot of disused slag heaps. It always seems to me that the Special Areas Acts, imperfect though they be, are really the achievements of back-benchers, for it is the back-benchers in all parts of the House who succeeded in making the Government act. I shall support the Motion because it refers to the necessity for having the Act substantially amended and made applicable to all distressed areas. That reference contains one fact which many of us have been trying for months and years to impress upon the consciousness of His Majesty's Government, and that is that there are many areas to-day which are far harder hit in the matter of unemployment than some of the scheduled Special Areas. The hon. Member for East Fife quoted some cases. I was looking up the percentages to-night in the local register of unemployed. I see that in some Scottish Special Areas—I do not say in all—but in some—the unemployment figure is down to below 15 per cent. I think that when the Act began, the general level was about 3o per cent. In one or two cases it is below 15 per cent.—in West Lothian it is down to 13.4 per cent., and in West Calder it is down to 11.1 per cent., and there are other examples. Let hon. Members compare those with some of the places which are outside the scheduled areas. There is Glasgow, with 17.2 per cent., there is my own constituency, Dundee, with 18.9 per cent., and, of course, if one takes the Highland counties, all of them show percentages which are very much higher still. For instance, in Caithness and Sutherland the figure is 31.5 per cent., in Ross and Cromarty it is 31.8 per cent., and in Argyllshire it is 19.5 per cent. That is true not only of Scotland. My hon. Friend the Member for Anglesey (Miss Lloyd George) pointed out last week that it is true of Wales. One can find such areas in England. I was surprised to find that even in the County of Cornwall, in Penzance, there is an unemployment figure of 20.9; in St. Ives, 16.4 per cent, and in Redruth is 34.9 per cent.

All these areas receive no kind of benefit from the Government's Special Areas legislation, and in fact, it happens that the facilities which have been given to the scheduled Special Areas are acting to the detriment of other areas a short distance away. We have in the West of Scotland the Hillingdon Estate. I do not intend to cricise that estate, because as far as it goes it is an admirable venture. Certainly, it is admirable from the point of view of those who live in that neighbourhood. But in my constituency we have a higher percentage of unemployment than many of those areas in the West of Scotland which are affected by the Hillingdon Estate, and we have good reason to believe that within the last year enterprises that would have been set up in Dundee and so helped to relieve our unemployment have been drawn away to that estate. To some extent, wherever there is a trading estate, it is likely to act as a private pool and to draw within it a good deal of new enterprise. That necessarily must have been contemplated from the first, and it must be to a certain extent at the expense of other areas, but I do not think it was ever contemplated, when the House passed the original Act in 1934, that that process would go on at the expense of many other areas which are even harder hit than the scheduled areas.

This situation was not unforeseen. There were many of us, at the end of 1934, who pointed out that it was bound to arise. At that time we were prevented from moving Amendments by the way in which the Money Resolution was drawn— the Government do not seem to have mended their ways very much since then —but we pointed out that this was something which was almost bound to happen. At that time, the right hon. Gentleman the President of the Board of Trade told us that we need not worry because this was only an experiment, and an experiment which might in due course be extended. That was said not only by the right hon. Gentleman the President of the Board of Trade, but the hon. Gentleman who was then Parliamentary Secretary to the Ministry of Labour, and who is now Parliamentary Secretary to the Ministry of Health, only a week or two before, in a Debate which followed the return of the four Special Commissioners, said: Our general policy is directed towards improving the situation there"— that is, in the Special Areas— and we certainly hope that, as a result of the experiments that will be carried on with this money in the depressed areas, we shall learn valuable lessons which we shall he able, as soon as the results of the experiments are available, to adapt, extend and apply to any town or area with heavy unemployment"— [OFFICIAL REPORT, 15th November, 1934; col. 2292, Vol. 293.] That was what was contemplated at that time, and that was over four years ago. In spite of the lapse of four years and all the experiments and adaptations and all the experience which the Government must have gained, the Shedule remains unaltered and there is no idea of extending it. Many representations have been made upon this matter. Representations have come from such bodies as the Scottish Economic Advisory Committee, but those representations have been consistently ignored.

I know it will be said by the Minister that we have Section 5 of the 1927 Act, and that it provides certain loan facilities for areas outside the Schedule. That is true, but I ask the House to remember what Section 5 provides. It lays down that in certain cases, where certain conditions are fulfilled, the Treasury may advance money either by way of subscription to the share capital of a site company, or by way of loan to the site company in the proportion of one-third of the paid-up capital of the company. But in any case it is only an advance which, in one way or another, has to be repaid. The other form of assistance is that when the site company has been set up, some advance can be made to the enterprises which are started under the auspices of the site company. I am not saying that, in the ordinary way, those inducements would not be worth something, but they are worth little when one has to compare them with the advantages given to the trading estates in the Special Areas. That is the difficulty. You only get a loan or an advance, which has to be repaid, where you have factories on the trading estate. They get a great deal more than that. They can get their rates and taxes free. They can get their factories rent free for the first five years. It is impossible for any site company, set up under Section 5 of the 1927 Act, to compete with those advantages given under Section 3 to concerns in the areas set out in the schedule.

Mr. David Adams

May I point out to the hon. Member, that I observed that the great complaint at the time, with regard to the Team Valley Trading Estate was that the Commissioner would not make those concessions, although asked to do so?

Mr. Foot

I am referring now to the experience which we have had in Scotland. We have considered the operation of Section 5, but we are always up against this difficulty, that if we ask for assistance for a site company, in some area which is outside the scheduled Special Areas, we are asked, "What is the use of advancing money, since we cannot compete with the advantages given under Section 3 to places within the scheduled areas?" That may not apply to the North-East coast but that has been our experience in Scotland. In order to get advances under Section 5 it is necessary to raise a considerable sum in the area concerned. Where you have an area which is suffering, as it must suffer if it is to come under Section 5, from prolonged and heavy unemployment, where it is dependent upon a few industries no longer able to maintain the people in the area, it is extremely difficult for the people living there to raise a sufficient sum. Certainly they will be reluctant to advance their money when they know that they have to compete against the advantages which are given in the Special Areas.

I have welcomed for what it is worth the decision to continue the Special Areas, though I think it is a pity that that decision was left so late. There was no reason why it should not have been made a great deal earlier in the present year. But it appears to me that the method adopted by the Government is thoroughly unsatisfactory, and I wish to ask this question. The hon. Member for East Fife referred to a statement made by the Minister of Labour a day or two ago. The right hon. Gentleman then said: Experience has shown that some modification of the present conditions applying to the outside areas is desirable in order to make loan facilities more readily available for new undertakings.—[OFFICIAL REPORT, 14th November, 1938; col. 646, Vol. 341.] I hope the Parliamentary Secretary will be able to tell us about those loan facilities. Are they to be dependent on the setting up of site companies, as is now necessary, or are those facilities to apply to enterprises in those areas which we are now considering, without the necessity of forming site companies? If that were so, it would be a considerable advantage, but I think it will be agreed in all parts of the House that we cannot long continue this indefensible anomaly of giving benefits to the Special Areas—which none of us would deny to those areas—while denying them to other areas which are suffering very much more from depression and unemployment.

10.1 p.m.

The Parliamentary Secretary to the Ministry of Labour (Mr. Lennox-Boyd)

This is, in a sense, the second day of a discussion on the distressed areas. I think it is a very good thing that this House, at a time when so much attention is directed to European affairs and absorbed by Continental events, should find time to discuss matters of this kind which affect many millions of our fellow citizens for whom we are responsible and over whose destinies we exercise a considerable measure of personal control. The hon. Member for Consett (Mr. D. Adams) moved this Motion in a friendly and not unhelpful fashion, and, if I may say so, speaking as a fellow member of the Parliamentary Council of St. Margaret's, Westminster, in a Christian fashion which makes my task less difficult than it might otherwise have been. The Debate is to be wound up by the hon. Member for Llanelly (Mr. J. Griffiths), whom I would like to congratulate upon his translation to the front Opposition Bench. Though we realise that this will make our task in the future more difficult because of the dialectical skill which the hon. Member will bring to controversies in this House, those of us who value the cut and thrust of debate and the proper examination of public issues, are delighted that he will in future speak from the Front Bench of his own party.

One interesting fact has emerged from this discussion, and that is the recognition by the Opposition of the fact that the problem of employment in the distressed areas is inextricably interwoven with the problem of general trade revival. The hon. Member for East Fife (Mr. Henderson Stewart) in a most excellent contribution to this discussion said that he realised that it was now and had been the policy of the Government to stimulate by every means in its power the recovery of lost markets and the winning of fresh markets oversea and at home. It may not be entirely without interest to remind the House that in the 12 months ended in June of this year exports from this country were nearly £155,000,000 greater than they were in 1932, the first full year after the present National Government took office and that the increase in respect of the total exports to the Ottawa Dominions and to those foreign countries with which we have made trade agreements, amounted to some £119,000,000 Speaking as one who believes that in the community of our own Empire lies our eventual salvation, I would say that it must not pass without comment that the British countries in the British Empire to-day are immense purchasers of those manufactured goods which come from the special and other areas in this country and provide active employment for hundreds of thousands of our people. If in the first 10 months of this year our exports to the British Empire of iron and steel are 39 per cent. higher than they were in the first 10 months of 1932, and if our exports to the Empire of machinery already this year equal £26,000,000 in value, then I feel sure that in the distressed areas it will be realised that it was not altogether without significance that Mr. Joseph Chamberlain began his great Imperial crusade by linking Imperial preference and social reform at home as twin aspects of the same policy.

Last night, some hon. Members opposite said that the Special Areas Acts were of very little practical value, and a number of other Members argued that the Acts were so good that they ought to be extended to cover other areas. Tonight we have heard a plea put forth that these Acts should be extended to cover all areas of heavy unemployment. The "Daily Herald," a few weeks ago, when no one outside Government circles was sure of what was going to happen to this legislation, said it would be a bad business if the Special Areas Acts were scrapped. It seems to me a far cry from those days, four years ago, when this legislation was first introduced, and the hon. Member for Ebbw Vale (Mr. Bevan) called the Special Areas Act "make-belief nonsense" and "shadow boxing," and the hon. Member for Chesterle-Street (Mr. Lawson), speaking in the same Debate, claimed that the Bill was not intended to do more than fill in the gap between that time and the time when Part 2 of the Unemployment Act was coming into operation. I am glad, not because of the opportunity to make political capital, but because, thanks to the new employment that has gone to those areas, those prophecies have not been justified.

I should like to direct attention to the question of employment in these areas and the really practical results which have been achieved as a result of this legislation. The speech of my hon. and gallant Friend the Member for North-West Camberwell (Major Guest) to-night interested me very much indeed, in view of the fact that his practical efforts in the last few months to make a material contribution to the position in an area of South Wales long associated with his family have won him the regard of all who know him and value his interest in that district. It is not true to say, as the hon. Member for Consett said earlier in the Debate, that very little direct contribution had been made to the unemployment figures in the Special Areas. He quoted figures which undoubtedly showed that in the course of the last few months there had been a regrettable tendency in many areas in that part of the world for the unemployment figures to rise. But when judging the work of the Special Areas Commissioners as a whole, it is surely fair to bear in mind the situation which they found when they were first appointed, and compare it with the position to-day.

In June, 1935, the unemployment among insured persons in those Special Areas was 391,000, but in June last year it had dropped to 252,000, showing a drop in the course of two years of a little under 140,000. It has been argued that this decline in unemployment is largely, and to-night the hon. Member for Consett said almost exclusively, the result of official and unofficial transference, but if he will examine the number of insured workers in that area, he will find that in the years 1936 and 1937 they recovered, after a temporary lapse, to almost the exact figure of 1935, and that proves that there were in fact in that period of two years 140,000 more insured people working in those distressed areas than there was before the Commissioner started his operations. Since June, 1937, as we all know, those figures have unhappily fluctuated, and last month, October, 1938—and I have no desire to hide anything from the House—the unemployment there had risen from 252,000 in June of last year to 280,000. It is difficult to state to the House the effects, in terms of employment, of this rise, because, as hon. Members know, the local results of the count of the insured population for 1938 are not yet available, but assuming that there has been no substantial change in the number of insured workers since 1937, we may perhaps rightly infer that the numbers in employment have fallen by about 28,000 since that date. I recognise the fact and deplore it, but even so there are at this moment well over 100,000 people in employment in those Special Areas more than there were three years ago. This is no urge to complacency or self-satisfaction; it is rather an incentive to greater effort, because it shows what can be done by deliberately weighting the scales in favour of those areas which, through prolonged unemployment, are in exceptionally adverse conditions.

As there are so many hon. Members opposite, and indeed on this side also, who are concerned in the heavy industries of this country, it may be of some interest if I give one or two figures relating to coalmining, iron and steel, and shipbuilding, because I must confess that when I first read these figures they surprised me very much indeed. In 1935, the first full year after the Commissioners started operations, those three heavy industries, with which so much of our national greatness is bound up, accounted for over 40 per cent. of all the unemployment in the Special Areas, but though their contribution to that heavy and tragic total was great, their contribution to recovery in the two years that have followed has been even greater. In the two succeeding years the improvement in unemployment in the Special Areas has been accounted for to the extent of 60 per cent. by those three heavy industries. To-day unemployment in coalmining and shipbuilding is about one-half of what it was three years ago. I must in fairness add that, unhappily, the third partner in those three industries, iron and steel, shows a rise of 15 per cent. in the last two years.

I had intended to develop at some length the situation on Tyneside, but I have not time to do that, because I have promised the hon. Member opposite to leave him plenty of time to conclude this Debate. I feel, however, in fairness to those who have been trying to bring practical help to the districts of Durham and Tyneside, that some answer should be made to the figures quoted by the hon. Member for Houghton-le-Spring (Mr. W. Joseph Stewart) when he referred to the unemployment figures in certain areas of Durham and Tyneside in 1937 and to-day, and gave the impression, I imagine unintentionally, that there had been no improvement despite the efforts of the Commissioner. In the Newcastle area, in the period since the Commissioner was first appointed, unemployment has fallen from 25 to 13 per cent., in South Shields from 42 to 31 per cent., in Gateshead from 44 to 29 per cent., in Wallsend from 36 to 13 per cent., and even in Jarrow and Hebburn in the last two years from 35 to 26 per cent. These figures, remarkable and encouraging though they are, provide no full picture unless at the same time we have in view, what is undoubtedly true and what is somewhat of a surprise to many people, that is the change in the character of unemployment in these and other districts in the course of the last year or more. Taking the Tyneside district again there has been a small increase in unemployment in the course of the last year but the number unemployed for one year or more has fallen in the course of last year by 6,000. What is true of that district is true of others.

I have personally seen something of the problem of the older unemployed, of the man who has been out of work for a long time and who feels that even if new processes come to his district he may not be in a position to avail himself of the opportunities of work. I have seen enough of that problem to realise that we have a very real problem in the older unemployed which any and every Government must try to solve. When I give the figures which I am about to give I do not want it to be suggested that by quoting these figures a complete answer has been given to the problem. For a fair comparison we should bear in mind that in September 1933, when we had 2,000,000 people out of work, 46 per cent. of claimants and applicants unemployed had been out of work for three months or more. When we took the count on i2th September this year, only 37 per cent, had been out for three months or more. In effect, there is a steady inroad into the numbers of those who have been out of work a long time, which may cause certain people to revise their idea as to the hopelessness of people who have been out of work for a considerable period.

The hon. Member who proposed the Motion asked the House to give an assent to such an extension of the machinery of the Special Areas Act that all areas of heavy unemployment should come within its beneficent sway. He ought to remember the circumstances in which the Special Areas legislation was first brought before the House. The hon. Member for Dundee (Mr. Foot) had his own explanation, but I have, not only at Oxford, but in the United States and even in this House, on so many occasions had cause to scrutinise his arguments with a view to discovering their shallowness, if I may say so, that I am not unduly impressed by his explanation.

The history of this period ought to be remembered by the House. In 1934 a general improvement had set in all over the country, but there were areas where that improvement was not making itself felt despite the general recovery elsewhere. These were areas which had suffered for a long time and did not enjoy that resiliency and ability to recover that other areas had. In these areas, local authorities had had their resources depleted, and certain essential services were in danger. Assistance to those areas was necessary if they were to get back into the stream of the nations industrial life. So the social and economic powers of the Special Areas Commissioners came into being. This explains why certain areas were selected and why certain geographical boundaries were drawn. That does not mean that at that date (as even now in many districts) there was not a very real problem outside the Special Areas, but to try and apply the machinery which has been effective over a relatively small field over too wide a field in a country where the number of light industries is obviously limited, would be so to dissipate our resources as to help no one and to impair the work on which we are now engaged. As to the other areas outside the Special Areas, while a Royal Commission is sitting on the location of industry it would be very inopportune to re-draw the geographical boundaries of the Special Areas Act. It would obviously be unwise even to consider re-defining them at the moment, but this does not mean that the Government are indifferent to the welfare of those areas which are outside the Special Areas.

As many hon. Members have reminded the House, my right hon. Friend only a week ago announced here the intention of the Government to introduce legislation at an early date to provide easier loan facilities in areas of heavy unemployment. A little later I intend to deal in some detail with the observations made by the hon. Member for East Fife and the hon. Member for Dundee, and in so far as they referred to the new proposals I hope they will wait until then. As the House knows, we have had for some time machinery whereby site companies can be set up, but, with the exception of Lancashire, the circumstances have been such that difficulty has been experienced in raising the quota of private capital necessary for site companies under Section 5 of the Act. These new proposals for loan facilities ought, I think, to reassure both those hon. Members, and others who are concerned about them, that facilities will in future be more readily available to new undertakings to be established in areas outside the Special Areas than they have been hitherto.

At this late hour I will not detail to the House, because it was partly done last night, the manner in which the money of the Special Commissioner has been spent, but I ought to remind the House that a great part of the sums to which he is now committed represent future expenditure, the full benefit of which has not yet reached these areas, but which will be of permanent value to them and immensely increase their local equipment.

One or two references have been made to trading estates, and the hon. Member for Consett, who first referred to them, did so less ungenerously, I think, than a great many other Members who have joined in the very natural plea for industry to go to their areas, but now seem to delight in discovering any flaw they can in the working of the trading estates in their own particular districts. The object of trading estates was to broaden the basis of industry in these areas by introducing new types of industry. We cannot, as the hon. Member for Consett suggested, cover the whole country, because of the obvious limitations upon the number of suitable industries, but one or two results have been achieved which ought to be recorded. We are on the way to break, if we have not already broken, the prejudice in the minds of many industrialists that these areas, are only suited for those industries which have long been established there. Real progress has been made, and if suggestions are made that only juvenile or female labour is now employed I think some scrutiny of the history of the Slough Trading Estate would be worth while. In the 12 years between 1924 and 1936 the numbers employed at Slough in the light industries increased from 6,000 to nearly 20,000, and of that 14,000 increase 8,000 were adult men. It may well be that a history similar to that may be enjoyed by the trading estates elsewhere, and even if that be not so the women and children employed in the Team Valley Estate and elsewhere are spending money every week at the shops of the hard-hit small tradespeople, money which is just as valuable from the point of view of the tradespeople as if earned by other people; and if light industries are coming to this country, as we all hope, from abroad, it is desirable that they should go to districts like Durham rather than increase the number of industries in the immediate environment of London.

One reference was made by the hon. Member for Consett to what he called, I believe, the meagre help accorded by the Team Valley Trading Company to industries on that estate. We have always envisaged the prospect that if industries could be attracted to that estate by the natural advantages of the site they should be so attracted and that other inducements should not be necessary. There is nothing, I think—indeed, the contrary is suggested—to give the impression that something is wrong with the estate when people go there without inducements. The power to give inducements is a power to hold in reserve, but it has been used in a number of cases in the Team Valley, and in a greater number at Treforest. The really satisfactory feature of this development, however, has been the number of industries that have gone to the trading estates without any financial inducement to do so. That, I think, argues a feeling of permanence and security greater than the hon. Member has suggested.

Various observations were made by my hon. Friend the Member for East Fife in his most helpful speech. He referred to Lord Nuffield's Trust. I am sure that it is not necessary at this stage in the country's appreciation of Lord Nuffield's generosity to thank him once more for what he has done, but the suggestion that the Government should put money into this fund if and when it is exhausted overlooks the fact that as this fund has subscribed to the share capital of undertakings, executive control of the undertakings is involved, and that, from the point of view of this Government, and, I venture to think, of most Governments that may succeed it—whatever theorists may say to the contrary—would be regarded as a distinctly unwelcome Government activity.

In regard to the orders for rearmament in Scotland, I will certainly bear in mind all that the hon. Member said. Some £124,000,000 has been expended in recent years in this direction in distressed areas and some preference has been given to Scotland by way of Government contracts. The Clyde has been drawing some part of that sum. So far as there is substance in anything that the hon. Member has said in regard to other areas, no doubt my hon. Friend the Under-Secretary of State for Scotland will bear it in mind, as much as we shall at the Ministry of Labour.

The hon. Member also made reference to the new loan provisions. This raises questions, which. were also raised by the junior Member for Dundee, as to the effect on Section 5 of the Special Areas (Amendment) Act of the new loan proposals, which are supplementary to the existing legislation. Any power in the Special Areas (Amendment) Act to help site companies will remain unaltered and unhampered by any new legislation which may be laid before the House. In regard to the funds of what is colloquially called S.A.R.A., the future activity of that association is restricted to the balance of the money originally put on one side, and such amount as may be recovered from loans already made. I would remind the hon. Member, however, that this Special Areas Reconstruction Association was formed to deal with small industries in the Special Areas, and although I believe the general impression has been created that the new loan facilities are to deal only with areas outside the Special Areas, there is nothing to that effect in the Government proposals which will be brought forward. The new loan facilities will be available for new industrial undertakings in the Special Areas on the same basis as outside.

I think that those replies deal with the various points which have been made. I will ask the House to accept the Amendment that has been moved from the Government Benches because I believe that along the lines of the proposals which have been made in the two speeches which we have just heard, and which represented the attitude of the Government, opportunities for further help for those areas will be provided. The hon. Member for Houghton-le-Spring said that external effort was necessary; external effort has been provided of an unorthodox kind which would have appeared impossible a few years ago. Efforts have been made in favour of these areas, and the effect, not only on their industrial story but on their social history—their hospitals and public services—is quite remarkable. The new power with which we shall soon be equipped, to help areas to solve unemployment, will, we hope, have results equally satisfactory. I recognise, as must every hon. Member in this House, that we still have the problem of unemployment—a real problem. It is a tragic irony that the passing of the recent international crisis meant for many men who had been called back to work a return to unemployment.

Although some people may be becoming complacent from having lived on public assistance, the vast majority of the people now out of work desperately desire work, I am convinced—manual work. It has been said that every man, rich or poor, should, once in his life, be a manual labourer, in order that he might learn what manual labour is. [An HON. MEMBER: "Hear, hear."] That was said by Herr Hitler, and I hope that the hon. Member opposite who said "Hear, hear" will not now withdraw his applause. I believe that many people in this country want to be manual labourers, but they cannot be manual labourers because the work is not available. They look to this House to find a means, so far as human ingenuity can provide, by which involuntary unemployment shall be brought to an end.

10.30 p.m.

Mr. James Griffiths

May I, first of all, thank the Parliamentary Secretary for his very kind references to myself? I listened very carefully to his speech, as I have listened to the speeches of his right hon. Friend the Minister in recent days, the last occasion being at some time round about two o'clock this morning, and I have noticed a growing tendency on the opposite side of the House, when dealing with the problem of the Special and distressed areas, to attempt to overwhelm the House with a mass of figures. Before I came to this House, my working life was spent in the mining industry, and my experience in that industry has, I believe and hope, made me impervious to masses of figures. For many years I was accustomed to sit at the table opposite representatives of the coalowners, and I was then, and still am, constantly puzzled by the system which was devised many years ago in the mining industry for ascertaining the results of the industry, and which always shows losses when it comes to computing wages and profits when it comes to making up balance sheets. An experience of that kind makes one sceptical about some of the figures that we see used in connection with these matters. I hope that, when we come to vote on this Motion, we shall remember the human beings that are behind all these figures.

I should like to join in the congratulations which have been offered to the Mover and Seconder of the Motion on the speeches that they made. We have brought forward this Motion deliberately at the present time, because, for the first time since 1934, the House of Commons has to make up its mind, first, whether the efforts we are now making are sufficient to solve the problem of the Special Areas; secondly, whether there are now in this country other areas, some of them equally distressed and some even more distressed than those areas which are called Special Areas; and, thirdly, if the present legislation is inadequate, what steps should be taken by this House to provide adequate measures for dealing with this, the nation's gravest social and economic problem. The Motion, therefore, is framed from these points of view. In it we make three propositions, to which I want to devote myself.

The first is that the Special Areas Act as it at present exists is inadequate to deal with this problem, and, therefore, must be substantially amended. The second proposition is that there are areas outside the Special Areas which, we are all now agreed, need assistance if they are to recover their prosperity. I think it is now agreed on all sides, and by the Government, who conceded the point in 1937 when they brought in their amending Bill, that those outside areas need assistance from the State, and therefore we have to consider in what way we shall provide assistance for those other distressed areas which are not scheduled as Special Areas. We propose that those areas shall be brought within the ambit of the Special Areas Act, and that there shall be one effort and one machine to deal with the same problem, and not two efforts and two machines to deal with what is an identical problem. In the third place, we call for a comprehensive effort to plan our economic life—to plan the economy of this nation so as to bring to an end the scandal of a nation which calls itself great and leaves nearly 2,000,000 people without a niche in its economic life.

With regard, first, to the question whether the present Act is adequate to meet the problem, I think we ought to bear in mind what the problem of the Special Areas is. These Special Areas, and the distressed areas which are in the same position though outside the Special Areas, are the old industrial areas of this country. They are areas with centuries of industrial effort and activity behind them. They are the areas that have made this Great Britain of ours the workshop of the world. This problem arises because of the distress in those areas, and the decline in their trade, for reasons over which they have absolutely no control—the decline in the great industries: coal-mining, the textile industries, shipbuilding and ship repairing, the steel industry, the industries that are located around the coalfields, the industries that grew up in the industrial revolution of the last century, the industries of the old industrial areas-South Wales, Northumberland, Durham, the Clyde, Lancashire, Yorkshire. May I ask the House to remember the magnitude of the problem? May I give just this single figure? In the industries I have mentioned, the basic industries of this country, there has been a reduction in the insured population of 774,000 between 1923 and 1938. The coal-mining, textiles, shipbuilding and ship repairing, and steel industries provided employment and a living in 1938 for 774,000 fewer persons than they did in 1923.

That is the problem; and when we use figures here, when we talk about trading estates, when we talk about the efforts that have been made, we ought to measure all those efforts by that. If you look at the problem in that way, you see the enormous problem that we have to face: the problem of this enormous reduction of employment in those basic industries; and you see that what has been done in the last four years, and up to the present moment, is utterly inadequate. Therefore, it is not enough for this House merely to continue this Special Areas Act. The hon. Member who moved the Amendment made what the Parliamentary Secretary described as a very interesting speech. It was, indeed, very interesting. The Amendment begins by giving a hearty welcome to the Government's decision to continue the Special Areas Act. The hon. Member's speech began in the same way; and then he went on to prove that the net result of those efforts for the area which he represents was negligible. While we do not want to minimise what is being done, we who live in those areas, who have lived with this problem and who live with it every day, do not merely think of it when we have a discussion in this House; and we have to measure it in the way I have said. Perhaps my hon. Friends who sit behind me will realise that if I use figures with reference to South Wales it is not because I think the position is worse there than anywhere else, but because I know South Wales best.

Reference was made by the Minister of Labour last night, and again by the Parliamentary Secretary to-night, to the improvement in the Special Areas. Figures were used by the Minister last night, and, the Parliamentary Secretary to-night used figures which were very similar. The Minister said last night that unemployment in the Special Areas in 1935 stood at 391,000 and that: it had been reduced to 271,000 in October of this year—a reduction of 120,000. The hon. Gentleman a moment ago used the figure for 1937. He gave a round figure of about 100,000. I asked the Minister of Labour last night, as I am now going to ask the Parliamentary Secretary, how much of that reduction has been due to increased employment and how much to transference? For some reason or other the Government have been very reluctant to give us a reply. I was interested to find that the Ministry themselves provide a reply in the "Ministry of Labour Gezette." They are very interesting figures. They say, referring to transference, that of 450,037 whose employment tickets were originally issued in the Wales Division, 85,416, nearly 16 per cent., exchanged their tickets in some other Division in July, 1937. Those are the Ministry's own figures. These are figures of transference. They are men who originally worked in Wales whose employment tickets were exchanges in 1937. Eighty-five thousand have left Wales and have sought employment somewhere else.

In the same copy of the paper I find the figures referring to the North of England. Of the 631,00o tickets of men between 16 and 64 that were originally issued in the Northern Division, 81,910 were, in July, 1937, exchanged in other Divisions. If you put those two figures together, how can the Minister of Labour and the Parliamentary Secretary say that unemployment has been reduced by 119,000. These figures indicate that 167,000 men have been transferred from those Special Areas, and, I believe, account for the reduction.

Mr. Lennox-Boyd

The hon. Gentleman has referred to me. Of course there must always be an interchange of labour between one district and another. That is obvious, and without that no industrial future is possible. I did say in my remarks—and I adhere to what I have said—that the number of insured workers showed a temporary drop in 1935 and came back in 1936–37 to roughly the figure of 1934, showing that there were as many people at work in those districts as before, with the addition of the fresh people in employment that I quoted.

Mr. Griffiths

I produce these figures to prove that the Government have not reduced unemployment. Suppose these men had not been transferred—why should they be transferred?—unemployment to-day would be at alarming rates in all these districts. The figures are conclusive that the reduction in these areas is infinitely due more to transference than to employment. I will give other figures to prove the same thing. Take the coal-mining industry, and again I refer to South Wales, and will quote the figures which were given in an informative speech by the hon. Member for Abertillery (Mr. Daggar) in this House a week or two ago. The coal mines of South Wales, our basic industry, produced 37,000,000 tons of coal in 1931, giving employment to 158,000 men, and in 1937 we reached the same level. Once more we produced 37,000,000 tons of coal but with 23,000 fewer men than produced it in 1931. Relate the efforts of the Ministry of Labour to that. We know perfectly well that a period of intense depression in any industry is a period of intense mechanisation, and in that industry mechanisation has been proceeding apace. The machine in these years has displaced in South Wales 23,000 men. Compared with the efforts of the Special Areas Commissioners of the Minister of Labour they are puny.

There is one industry which has been established in Wales, to which I would refer. One of the claims made by the Commissioner and the Minister of Labour is that, through their efforts, financial and moral South Wales has become the home of an enormous new strip mill. They speak of that as something for which they deserve great credit. We have had very glowing accounts and wonderful speeches made about the way in which the Government and the Commissioner have used their efforts to establish this great £10,000,000 plant. I would, however, ask them to realise what it means. It will provide employment, we are told, for 3,000 workmen, in a town which needs work very badly, Ebbw Vale, but I have been at pains to find out what are the possible repercussions upon the older industries. The other day, at a deputation which the Parliamentary Secretary attended, there was present a representative of the tinplate trade of South Wales, a man who is competent to speak for that industry, and he told the Minister that he estimated that the new strip mill would displace 9,000 men in South Wales. That is what they claim as one of their great achievements. They provide a mill which will find employment for 3,000 in East Wales and put 9,000 men out of employment in West Wales. Something very much better will have to be done before we on this side of the House will be satisfied.

Let me say a few words about other areas. There is Lancashire, whose tale of woe we have heard. Lancashire is not a Special Area, but is outside, yet there are 27 Exchanges in that county where over 20 per cent. of the insured population are unemployed. Lancashire is asking what the Government are going to do for them. We in our Resolution asked for the cardinal thing that all of us who have practical experience of this problem believe to be necessary. We ask that all these areas should be brought together under one comprehensive plan. Let me turn once more to Wales. There are only two counties in Wales which are in the Special Areas, Monmouthshire and Glamorganshire. One township in Breconshire and one place in Pembroke, Pembroke Dock, are included in the Special Areas, for whom nothing has been done. Excluding these two counties of Wales, out of the 13 counties there are 11 which are not in the Special Areas, yet in eight out of the II the unemployment rate is over 20 per cent. In some of them it is higher. In Anglesey the rate of unemployment is 37 per cent.

We are to have new legislation. On Monday we are to discuss, in a form which we do not like, because it restricts us, the continuation of the Special Areas legislation The problem that we have to decide is what are we to do with the distressed areas. Everyone agrees that something must be done. We say they ought all to be included in the Special Areas. The Government disagree. There are areas in South Wales outside the Special Areas, that are distressed, and they will come under the terms of the new legislation. Therefore, if the Government persist in their determination not to extend the Special Areas but to make other provision for other areas, you will have two areas in South Wales, a Special Area and a certified area, competing with one another, seeking to attract industries, and one able to offer better terms than the other. The consequence will be that all the industries that will be attracted will go to the area which will give the best terms.

I should have thought that the Ministry of Labour and the Government would have learnt from the lesson of 1937. In that year we faced up to this problem, and the Minister of Labour brought before us a scheme for the setting up of site companies which were to attract new industries, and they were to be the instrument which was to rehabilitate the areas outside the Special Areas. What has happened? One site company has been formed for Lancashire—just one. That site company built a single factory. It has not got a single job. It has done nothing. I have gone into this problem very carefully and the difficulties of trying to establish a site company are so great that the measure cannot be worked. These areas are crying for help—Lancashire, West Wales, North Wales, portions of Yorkshire, East Fife, areas which are outside the Special Areas. If the Government do not propose to do something for them let them not hold out to them false hopes.

We do not want certified areas and Special Areas; we want one comprehensive measure to bring all these areas, whose economic life has been broken, within one scheme. We urge that for the fundamental reason that we believe that this problem is never going to be solved until we have measures for reconstructing the economic life of the nation. We on this side of the House believe that this problem must primarily be solved by the State taking power into its hands to determine the location of industry. We take our stand on that. Let me say, in passing, that we think it is unjust and unfair to the men and women in those areas to bring in this legislation piecemeal. The Government should have urged the Royal Commission on the Location of Industry to report before now, or else they should hold their hand until that report comes out. We look forward to the report of that Commission because we ourselves are thoroughly convinced that we shall not solve the problem of these distressed areas until the State takes all power into its hands for the location of industry. Why not? Who can argue against it? Is there any industry in the country which does not ask for help? I put this proposition to the House. If the nation is good enough to help industry the nation is good enough to determine where industry shall be located. The national interest should be first. We believe that the State should say where industry shall be located. New industries are being built—in London. The problem of the Special Areas is that they have to go elsewhere for work; they cannot get it at home. The State, we say, should take power to determine' where industries shall be located. We are convinced that only in this way can any real solution of this problem come.

We have heard a great deal about trading estates. I desire to make one suggestion for the consideration of the Government. I can see the advantages of bringing together a number of industries in the Team Valley and in Treforest, but I want to urge this one consideration upon the Government. I am certain that they are doing a wise thing in South Wales and in Durham, but are they doing a wise thing in bringing all the new industries into one narrow area? You are building new towns. I have seen the Team Valley Estate from the train. You will have a new town there in 10 years' time, and old townships in West Durham will go down. In Treforest you are building a new township and Aberdare and Merthyr will die. If we are to have new industries need we have 4o or 100 new industries gathered together in the same place? Slough has been held up as an example, but did not Slough cause some perturbations the other day when we were faced with a crisis, with 40 or 50 factories gathered together in one spot? I am speaking for a widely growing opinion in South Wales when I say that to concentrate all these new industries in one trading estate is not good for the area or for the nation. We have heard a great deal about national effort in the last week or two. This is a call for a great national effort. For years our people have been pleading with the Government to do things and I hope the time will come when they will cease to plead in vain but

will compel the Government to act and rehabilitate these areas which are worth saving.

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

The House divided: Ayes, 139; Noes, 160.

Division No. 9.]	AYES.	[11. 1 p.m.
Adams, D. M. (Poplar, S.)	Hall, G. H. (Aberdare)	Owen, Major G.
Adamson, Jennie L. (Dartford)	Hall, J. H. (Whilechapel)	Paling, W.
Adamson, W. M.	Hardie, Agnes	Parker, J.
Alexander, Rt. Hon. A. V. (H'lsbr.)	Harris, Sir P. A.	Parkinson, J. A.
Anderson, F. (Whitehaven)	Harvey, T. E. (Eng. Univ's.)	Pearson, A.
Attlee, Rt. Hon. C. R.	Hayday, A.	Pethick-Lawrence, Rt. Hon. F. W.
Banfield, J. W.	Henderson, A. (Kingswinford)	Poole, C. C.
Barnes, A. J.	Henderson, J. (Ardwick)	Price, M. P.
Batey, J.	Henderson, T. (Tradeston)	Pritt, D. N.
Benn, Rt. Hon. W. W.	Hicks, E. G.	Quibell, D. J. K.
Benson, G.	Hopkin, D.	Richards, R. (Wrexham)
Bevan, A.	Jenkins, A. (Pontypool)	Ridley, G.
Bromfield, W.	Jenkins, Sir W. (Neath)	Riley, B.
Brown, C. (Mansfield)	John, W.	Ritson, J.
Buchanan, G.	Jones A. C. (Shipley)	Robinson, W. A. (St. Helens)
Burke, W. A.	Jones, Sir H. Haydn (Merioneth)	Rothschild, J. A. de
Cape, T.	Kelly, W. T.	Sanders, W. S.
Cassells, T.	Kennedy, Rt. Hon. T.	Seely, Sir H. M.
Charleton, H. C.	Kirby, B. V.	Sexton, T. M.
Chater, D.	Kirkwood, D.	Shinwell, E.
Cluse, W. S.	Lansbury, Rt. Hon. G.	Silkin, L.
Collindridge, F.	Lathan, G.	Silverman, S. S.
Cove, W. G.	Lawson, J. J.	Simpson, F. B.
Daggar, G.	Leacn, W.	Smith, Ben (Rotherhithe)
Dalton, H.	Leslie, J. R.	Smith, E. (Stoke)
Davidson, J. J. (Maryhill)	Logan, D. G.	Smith, Rt. Hon. H. B. Lees-(K'ly)
Davies, R. J. (Westhoughton)	Lunn, W.	Smith, T. (Normanton)
Davies, S. O. (Merthyr)	Macdonald, G. (Ince)	Sorensen, R. W.
Day, H.	McEntee, V. La T.	Stephen, C.
Dobbie, W.	McGhee, H. G.	Summerskill, Dr. Edith
Dunn, E. (Rother Valley)	McGovern, J.	Taylor, R. J. (Morpeth)
Edwards, Sir C. (Bedwellty)	MacLaren, A.	Tinker, J. J.
Evans, D. O. (Cardigan)	Maclean, N.	Tomlinson, G.
Fletcher, Lt.-Comdr. R. T. H.	MacMillan, M. (Western Isles)	Viant, S. P.
Foot, D. M.	MacNeill Weir, L.	Watson, W. McL.
Gallacher, W.	Mainwaring, W. H.	Welsh J. C.
Gardner, B. W.	Marshall, F.	Westwood, J.
Garro Jones, G. M.	Mathers, G.	White, H. Graham
George, Major G. Lloyd (Pembroke)	Maxton, J.	Whileley, W. (Blaydon)
George, Megan Lloyd (Anglesey)	Messer, F.	Williams, T. (Don Valley)
Gibson, R. (Greenock)	Milner, Major J.	Windsor, W, (Hull, C.)
Graham, D. M. (Hamilton)	Montague, F.	Woods, 'G. S (Finsbury)
Green, W. H. (Deptford)	Morgan, J. (York, W. R., Doncaster)	Young, Sir R (Newton)
Greenwood, Rt. Hon. A.	Morrison, Rt. Hon. H. (Hackney, S.)
Griffith, F. Kingsley(M'ddl'sbro, W.)	Morrison, R. C. (Tottenham, N.)	TELLERS FOR THE AYES.—
Griffiths, G. A. (Hemsworth)	Naylor, T. E.	Mr. David Adams and Mr. W.
Griffiths, J. (Llanelly)	Noel-Baker, P. J.	Joseph Stewart.
Groves, T. E.	Oliver, G. H.
NOES.
Acland-Troyte, Lt.-Col. G. J.	Castlereagh, Viscount	Donner, P. W.
Adams, S. V. T. (Leeds, W.)	Cayzer, Sir H. R. (Portsmouth, S.)	Duckworth, Arthur (Shrewsbury)
Anderson, Sir A. Garrett(C. of Ldn.)	Cazalet, Thelma (Islington, E.)	Dugdale, Captain T. L.
Apsley, Lord	Channon, H.	Duncan, J. A. L.
Aske, Sir R. W.	Chapman, A. (Rutherglen)	Eastwood, J. F.
Astor, Hon. W. W. (Fulham, E.)	Clarke, Colonel R. S. (E. Grinstead)	Eckersley, P. T.
Beamish, Rear-Admiral T. P. H.	Cobb, Captain E. C. (Preston)	Edmondson, Major Sir J.
Beauchamp, Sir B. C.	Conant, Captain R. J. E.	Elliot, Rt. Hon. W. E.
Beaumont, Hon. R. E. B. (Pertsm'h)	Cooper, Rt. Hn. T. M. (E'nburgh, W.)	Ellis, Sir G.
Beechman, N. A.	Courthope, Col. Rt. Hon. Sir G. L.	Elliston, Capt. G. S.
Beit, Sir A. L.	Craven-Ellis, W.	Emery, J. F.
Bernays, R. H.	Croft, Brig. -Gen. Sir H. Page	Errington, E.
Bower, Comdr. R, T.	Crooke, Sir J. Smedley	Everard, W. L.
Braithwaite, Major A. N.	Crookshank, Capt. H. F. C.	Fildes, Sir H.
Briscoe, Capt. R. G.	Crowder, J. F. E.	Fremantle, Sir F. E.
Brooklebank, Sir Edmund	Cruddas, Col. B.	Furness, S. N.
Bull, B. B.	De Chair, S. S.	Fyfe, D. P. M
Carver, Major W. H.	Denman, Hon. R. D.	Geldie, N. B.
Gower, Sir R. V.	Lloyd, G. W.	Shaw, Major P. S. (Wavertree)
Grant-Ferris, R.	Loftus, P. C.	Sinclair, Col. T. (Queen's U. B'lf'st)
Granville, E. L.	MacAndrew, Colonel Sir C. G.	Smith, Bracewell (Dulwich)
Greene, W. P. C. (Worcester)	MacDonald, Sir Murdoch (Inverness)	Smith, Sir Louis (Hallam)
Gretton, Col. Rt. Hon. J.	McKie, J. H.	Smith, Sir R. W. (Aberdeen)
Gridley, Sir A. B.	Maclay, Hon. J. P.	Smithers, Sir W.
Grigg, Sir E. W. M.	Magnay, T.	Somervell, Rt. Hon. Sir Donald
Grimston, R. V.	Makins, Brigadier-General Sir Ernest	Southby, Commander Sir A. R. J.
Guest, Lieut. -Colonel H. (Drake)	Margesson, Capt. Rt. Hon. H. D. R.	Storey, S.
Hambro, A. V.	Marsden, Commander A.	Strickland, Captain W. F.
Hammersley, S. S.	Mayhew, Lt. -Col. J.	Stuart, Hon. J. (Moray and Nairn)
Hannah, I. C.	Moreing, A. C.	Sutcliffe, H.
Haslam, Henry (Horncastle)	Morrison, G. A. (Scottish Univ's.)	Tasker, Sir R. I.
Hellgers, Captain F. F. A.	Morrison, Rt. Hon. W. S. (Cirencester)	Taylor, C. S. (Eastbourne)
Heneage, Lieut.-Colonel A. P.	Munro, P.	Thorneycroft, G. E. P.
Herbert, Major J. A. (Monmouth)	Nail, Sir J.	Touche, G. C.
Higgs, W. F.	Neven-Spence, Major B. H H.	Tufnell, Lieut.-Commander R. L.
Hoare, Rt. Hon. Sir S.	Nicolson, Hon. H. G.	Turton, R. H.
Holmes, J. S.	O'Connor, Sir Terence J.	Ward, Lieut.-Col. Sir A. L. (Hull)
Hope, Captain Hon. A. O. J.	O'Neill, Rt. Hon. Sir Hugh	Ward, Irene M. B. (Wallsend)
Hopkinson, A.	Perkins, W. R. O.	Wardlaw-Milne, Sir J. S.
Hudson, Capt. A. U. M. (Hack., N.)	Pickthorn, K. W. M.	Waterhouse, Captain C.
Hunloke, H. P.	Radford, E. A.	Watt, Major G. S. Harvie
Hunter, T.	Raikes, H. V. A. M.	Wedderburn, H. J. S.
Hutchinson, G. C.	Rathbone, J. R. (Bodmin)	Williams, C. (Torquay)
Kerr, H. W. (Oldham)	Reed, A. C. (Exeter)	Williams, H. G. (Croydon, S.)
Kerr, J. Graham (Scottish Univs.)	Reed, Sir H. S. (Aylesbury)	Windsor-Clive, Lieut. -Colonel G.
Kimball, L.	Reid, Sir D. D. (Down)	Womersley, Sir W. J.
Lamb, Sir J. Q.	Reid, W. Allan (Derby)	Wood, Hon. C. I. C.
Leech, Sir J. W.	Richards, G. W. (Skipton)	Wragg, H.
Leighton, Major B. E. P.	Ropner, Colonel L.	Wright, Wing-Commander J. A. C.
Lennox-Boyd, A. T. L.	Rowlands, G.	Young, A. S. L. (Partick)
Lewis, O.	Royds, Admiral Sir P. M. R.
Liddall, W. S.	Ruggles-Brise, Colonel Sir E. A.	TELLERS FOR THE NOES.—
Lindsay, K. M.	Russell, S. H. M. (Darwen)	Mr. Henderson Stewart and
Lipson, D. L.	Salt, E. W.	Major O. Guest.
Llewellin, Colonel J. J.	Shakespeare, G. H.

Question proposed, "That the proposed words be there added."

Mr. Ellis Smith rose—

It being after Eleven of the Clock, the Debate stood adjourned.